Get it right with 10 effective tips

Outsourcing and outsourcing are the two most popular practices that are widely approved and preferred by companies. These models help speed up the development process and also save a lot of time and money. Both models allow companies to use the valuable resources and expertise of employees working from anywhere in the world.

The approaches are gaining traction in many companies across all industries, and such models are best for specific domains, with the IT industry being one of them. So read on to learn more about Outsourcing and Outstaffing practices and effective tips for finding the best option.

The difference between outsourcing and outsourcing

People often assume that outsourcing and outsourcing are the same things, but they are not.

Software development outsourcing refers to a model in which one company hires workers from another company to perform specific tasks. The IT industry can develop an application, a website, a software product, etc. Often times, outsourcing means that the contractor will carry out the entire scope of the work and not just one or two tasks. For example, if you want to develop a mobile application, they will take care of everything from technical requirements to maintenance and final checks.

If you choose to outsource, a project manager will be assigned to your project. They will interact with you and also take care of the whole team.

On the contrary, Outstaffing is a type of model in which a third party worker or a team does your work. The third party is officially employed by another company, but does the work for you. At Outstaffing, clients control the entire scope of work and have direct access to the outsourced team. When you subcontract, you have to manage the contracted team and your own; however, the Outstaffing team will handle the payroll.

This approach works best when you already have a development team, but lack the necessary expertise for a particular project.

Outsourcing vs. Outsourcing: In Search of the Best Fit

There is no one size fits all, and no one can tell you what to choose. Each situation is unique and requires consideration. To develop the best fit, you must first assess the resources available to you.

If you do not have a software department in your company and you have sufficient funds to carry out your project, Outsourcing is the option for you. On the contrary, your team is not strong enough and you can smoothly manage a third party team and yours to complete a project, senior staff is the best choice for you.

When deciding between outsourcing and outsourcing, you need to know the general principles on which the models work.

How does Outsourcing work?

When you are asked to develop cooperation with your subcontractor, a universal algorithm is followed.

  • Write and assign the required budget.
  • Find an experienced and competent subcontractor.
  • They will need a product requirements document that covers all the priorities related to their needs.
  • You will need to inform the subcontractor of your requirements and project details.
  • You should schedule regular meetings with the team working on your project to learn about the progress made and discuss any modifications that may arise.
  • In the end, you will have to evaluate the results and give your opinion on the services available.

How does Outstaffing work?

When you choose staffing, a different set of activities is performed to get the desired results.

  • Just like you recruit candidates, you must run a recruitment campaign to find IT experts who are the perfect fit.
  • Final project requirements must be articulated to ensure that all employees proceed together.
  • Provide the necessary software to ensure a smooth workflow.
  • If necessary, the integrated team will be trained and then assigned a workload.
  • Monitor team performance with senior staff.
  • Provide regular feedback on your performance and areas that need improvement.
  • Evaluate the quality of the deliverables and suggest any necessary modifications.

Make Outsourcing and Outsourcing Great (Always) – Helpful Hints

  • Start with setting and scheduling goals:

Whether it’s outsourcing or outsourcing, you need to determine the goal of your project. First you need to know which model you will choose. After hiring a team, you can communicate your goals to the vendor to get started. It would be helpful if you then provided them with a complete list of your project details. With more precise information, they will allow you to know the cost and duration of the project.

  • Prioritize the search for the right provider:

When choosing vendors for your project, you need to consider some essential points, your vendor’s competency domain, your portfolio, reviews from previous clients, etc. Other crucial considerations include language barriers, time zone, work ethic, cultural background, etc. it will narrow down the options for you to decide which is the best company.

  • The lowest bid is the dirty word:

It may seem tempting, but you should ignore the provider that charges the lowest rates. You cannot expect to get quality at reduced prices; therefore, such a decision may cause you to compromise the KPIs of your software product.

  • Discard a fixed price offer:

In the beginning, if you know how much you will have to pay, you will have a sense of control and security, as all surcharges and financial risks will be handled solely by your subcontractor. However, if you let go of all worries, you may face other worries. For example, at fixed cost, the provider can maintain a risk margin and therefore you end up paying more. Also, if the sum is stipulated initially, the developers will limit their creativity and try to stay within budget without improvements.

  • A contract is essential:

The best recipe to get finances, technique, communication, management and all possible moments regulated, the signing of a contract is essential. This document will cover all the necessary details of the project and will be signed by both parties.

If you are cooperating with a provider for the first time, we recommend starting with a smaller scope assignment. If you are satisfied with the results, you can continue to reap the benefits of software development outsourcing.

  • Correlate payment to milestones:

Do not make the full payment in advance. A sensible measure is to make an upfront payment of one-third of the final amount and then divide the remaining amount to complete the milestones. In this way, they will also work to meet deadlines.

  • Train internal staff:

When choosing senior staff, this advice is essential. When you explain the potential benefits to your regular employees, they will accept and the resistance of introducing new temporary employees will be reduced. Plus, it helps improve workflow efficiency.

Communication is essential when cooperating with remote computers. If it fails, the project can be defeated. To avoid such setbacks, you need to establish effective communication channels that both parties are comfortable with.

  • Readiness for a follow-up:

It is essential to integrate a supporting clause that specifies the possible cooperation of the parties after the completion of a project. By doing so, you won’t have to find another vendor to make the necessary fixes or fix something after the product is launched.


Whether you choose outsourcing or outsourcing, you will use the workforce outside of your company to get the job done – the main difference from who manages the team. You need to make a thoughtful decision and weigh all the pros and cons before choosing a business model for your project. Evaluate your requirements thoroughly and seek reasonable, high-quality services.

Image credit: provided by the author; Thank you!

Vikrant bhalodia

Chief – Operations

Head of Operations with over 12 years of cross-functional experience in sales and marketing, consulting, web content management, operations, and human resource management at WeblineIndia. Have a passion for technology and multi-functional experience in a Software development company Based in the US and India, Vikrant loves sharing insights on how to optimize the success and visibility of clients’ businesses online.

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