IT outsourcing and outstaffing in a nutshell
You often hear from clients: “We are desperately short of workers, all full-time employees are busy, we need to take someone on contract.” The desire is quite understandable, given the massive shortage of IT professionals, which now suffers the entire industry.
The need for external IT specialists can be filled in different ways: through IT outsourcing or IT outstaffing. Many people confuse these notions, considering them almost equivalent. But there are significant differences between them. Let’s find out what they are.
Nothing more than unreasonable expectations complicates communication between the client and the IT contractor. In the case of attracting “external” workers to your team, this misunderstanding often arises if there is no understanding of how IT outsourcing and IT outstaffing work. To begin with, let’s define the concepts.
What is IT outsourcing?
According to Wikipedia, outsourcing is the transfer of certain functions or activities within a company to an outside contractor. The key point is that a particular task or process is delegated to a contractor. If we talk about IT, it can be, for example, software development or a mobile application, maintenance of the corporate network, configuration of equipment, etc. How the IT outsourcer approaches the task, what staff is hired for this purpose, how they are managed – the customer knows only in general terms and does not seek to understand more; he is interested only in the result.
What is IT outstaffing?
Outstaffing directly borrows that English word, which means “putting the staff behind staff”. In this case, the new employee you hire joins your IT team, goes to the office in the same way (if you do not have a “remote office”), and does not differ from your other employees with one exception: legally, he “works” for another company – the IT-outstaffer. As the client-company, you enter into a contract with an outstaffer who essentially “rents” his employee to you.
Conclusions about IT outsourcing and outstaffing?
Even these short descriptions allow us to understand that the vital difference between IT outsourcing and IT outstaffing is in the management of employees. In the case of IT outsourcing, the customer most often interacts with the external team through the project manager of the contracting company. They discuss goals and objectives, deadlines, and milestones. The client seldom communicates with specific professionals who work on his tasks; he does not have a headache because someone is sick or the work is not delivered on time.
But an employee in the outstaffing model is a full-fledged member of your team. You are the “big boss” who gives orders, controls, motivates, rewards, or punishes. The outcome of the work depends mainly on the effectiveness of the management that has developed in your company. Of course, if you are not satisfied with the results, you can simply “rent” another employee from the outstaffer. Sometimes it is helpful to think about whether everything is in order and your management processes are adequately built up. But that’s another story altogether.
IT Outsourcing or outstaffing – what to choose?
In the field of IT, the most straightforward criterion for choosing between these two models is the degree of “advancement” in technology. Let’s suppose the activity of your company is not directly connected with IT; you and your project manager will not find it easy to control your employees within the framework of outstaffing. You will not be able to set the tasks adequately, nor will you be able to evaluate the results of the work. In this case, IT outsourcing is preferable.
If there is already a strong “backbone” of good IT professionals within your team, additional employees on the outstaff model will come in handy. They will quickly join the team and work along with everyone else. Why not hire them, you may ask? Outstaffing is very convenient when the company:
- cannot increase the staff
- does business in another country
- the team is short of specialists with particular skills
- the staff is needed temporarily for a specific project
In practice, there are also ambiguous cases when it is difficult to say what is better – IT outsourcing or outstaffing. If the choice is not clear for you, please consult with Neontri Outsourcing Services. We will consider all the options, calculate them and justify all the figures for you.