IT Outstaffing: Pros and Cons of This Model in Software Development

Instead, they get the job done, usually in a very innovative way. These innovative technical solutions can prove invaluable to your business down the line. One of the things that worries clients attempting hands-off outsourcing is what will happen if the code simply doesn’t work? To them, it’s a bit like buying a product off the internet sight unseen with no possibility of getting a refund. What you want to pay for constant support or complete product development.

  • Outstaffing is a type of remote employments when a hired person carries out all the job duties for a company being officially employed by another company .
  • Outstaffing allows companies to hire capable developers with a lower budget.
  • This certainly increases the chance that the development process will go smoothly.
  • If you’re familiar with the “telephone game,” you know how easy information can change as it moves from person to person.
  • Next, hold an in-person interview with the outstaffing team, preferably with a technical manager.
  • The employee works full-time on their project but is paid by the third-party company.

However, there’s very little visibility with outsourcing as you might not have access to source codes and some project documentation. According to a study, 59% of US companies outsource software outsourcing and outstaffing to external IT vendors to reduce hiring costs. The salaries for experienced developers in Western countries are considerably expensive compared to those in developing nations.

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Sign up to our newsletter to start receiving notifications about new articles. Remember that culture, language, timezone, and reputation are equally important consideration factors besides salary. Here are simple clarifications if you’re still confused about the offshoring vs. outsourcing difference. It helps them to launch an app and meet tight deadlines without depending on in-house IT expertise. The choice of your workforce often defines the quality of the work you receive. Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

software outsourcing and outstaffing

However, analyzing what went wrong and doing more precise vetting helped us avoid failures and deliver excellent results. Global changes, such as the Covid-19 pandemic and technological progress, have significantly impacted the world’s technological landscape. So the IT industry, in general, and especially outsourcing and outstuffing software providers, constantly monitor and respond to these changes, and our company it’s not an exception.

Outsourcing vs outstaffing: Process

There are many reasons why we choose Rails as our core technology. But throughout years and projects, it proved its relevance and efficiency. For outsourcers building the entire turnkey app for you, ask for the references of at least two software applications they have launched successfully. I’ve seen some recruiters start to offer research and development (R&D) center services to clients to compete with outsourcers. This new trend of not only sourcing the developers but operating the office and administrative functions on behalf of the client have additional fees.

software outsourcing and outstaffing

Remote development team as a virtual extension of the client’s IT department. We balance performance with possibility, pairing time-tested best practices with cutting-edge technologies. Waverley Software provides accounting and legal support to the team members; our HR management system manages team member’s PTO in a way that doesn’t impede the product development. The same applies to detailed user stories provided by the client. Building your team of highly qualified developers based in Ukraine is simple when dealing with a committed and competent IT outstaffing agency such as TechMagic.

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At the same time, you don’t have to manage payroll, HR, or other hurdles related to in-house team maintenance — the vendor will handle it for you. Outstaffing is a form of outsourcing that involves employing professionals from outside a business for specific tasks or short-term projects. Outstaffing assumes that you already have an in-house IT department or engineers with whom you have long-term contracts. Essentially, outstaffing is an extension of your team for a limited period of time.

software outsourcing and outstaffing

Outsourcing is costlier than outstaffing, as you are paying for outstaffed professionals and for the project management team assigned to synchronize your account. As a result, in 2020, IT outsourcing reached $1.1 trillion worldwide — a record-high. Let’s take a closer look at the pros and cons of outsourcing software development to determine whether it’s worth the hype. Because the firm you outsource to functions as a temporary team for a specific project, often, your in-house team doesn’t even require IT staff.

How to Find an Outstaffing or Outsourcing Company?

The first possible barrier — the communication language — arises at that point. Communication problems will escalate into obstacles when diverse corporate cultures and time zones (some of which are up to 12 hours ahead or behind!) are added to the mix. By performing work under the outstaffing contract, employees are subject to the customer’s employment schedule, usually, have their jobs in the customer’s premises and have job descriptions. In case you hire Syndicode to help you with outstaffing – we cover all the risks. Personnel provided by Syndicode is always highly skilled and responsible – this is our task to leave you no reasons to worry about. IT outstaffing reduces the number of staff, which will reduce HR-managers responsibilities.

The builders have to complete everything according to the given plan. Obviously, this approach creates strong problems for all the relevant parties. If you don’t like something, changes may necessitate an additional contract on your part. The workers, if they fail at creating a good budget, would have to offer their company funds for the completion of the project.

Now, let’s see why Ukraine has taken the main stage of IT oustaffing in Europe. There is no need to interact with the supervisory authorities. The mediator is solely responsible for the employees provided. All possible sanctions and fines related to the timely payment of salaries, tax deductions, visits to the Labour Inspectorate and so on fall on the shoulders of the provider company.

So if any developer is fired from the project, it will be a red flag for the outstaffing agency and a reason to fire them, too. You can augment your tech team by hiring a developer from an outstaffing agency and have a full team assembled to start your project. But what if you have a tech team that misses a specialist with certain skills? Let’s see its pros and cons and what difference it may bring to your business. Outsourcing and staff augmentation in software development mean different approaches to who and how will do a particular tech task.

software outsourcing and outstaffing

For this reason, it’s vital that your outstaffed team has a firm grasp of all project management software and that their reporting is transparent across corporate team members. Most companies desire rapid development in order to get their products to market as soon as possible. Because the onboarding process is so short, outsourced teams can provide high-quality software much faster than in-house teams.

We work effectively in many spheres, helping our clients to realize all their goals.

Let’s imagine you decide to build a house using the presented model. You hire a team of construction workers wholook at the key requirements and then offer you a final price that they consider to be sufficient for the completion of the project. According to the contract, you don’t have to pay for anything beyond the original sum.

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They want to do this as quickly as possible without compromising quality. That’s one of the reasons why they outsource or outstaff their IT needs. Since the employee enters into an employment contract with the outstaffing company and not with the ordering company, the latter does not participate in labor disputes that may arise. This problem is perceived especially acutely when there is a large time difference. This can lead to misunderstandings that affect work quality. Therefore, there is a need to consider all the necessary connections, channels, and communication procedures.

As a result, your business can become more efficient and productive overall. This can be a disadvantage if you don’t have expertise in developing the project you’ve hired a developer for. The hired employee may be an excellent pro in coding but might eventually hurt the development process if your team lacks QA expertise or effective management.

Drawbacks of Outstaffing

UI/UX designer is among the jobs being outsourced the most at 34%. Software developers are a close second at 31%, while QA at 28% stands as the third most outsourced job. Commit found that outsourcing is influenced significantly by funding rounds of startups, especially for software development jobs. Supported mainly by remote work, software development outsourcing has snowballed even before the pandemic. The number of startups going for tech outsourcing is expected to increase even further, according to the 2022 State of Tech Staffing report by Commit. We have many projects in our portfolio that were released through the outsourcing model.

Outstaffing assumes that the client needs to keep an eye on the ball at all times when it comes to the SDLC. The tech team provided by the vendor works under the client’s direct management, using the engineering practices, communication style, and workflows prevailing in their company. Outstaffing is a great way to tailor a team and use it as you see fit. Such duties as talent recruitment, team member integration , and building out IT infrastructure fall on the provider’s shoulders.

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