Larger organizations outsource their IT functions to increase the efficiency and effectiveness of their operations, reduce costs through flexibility and scalability. Hiring an outside company makes it easier to scale up (or down) when demand changes.
Most industries require IT services on a temporary or project basis, acquiring a permanent full team of professionals can be expensive. Outsourcing involves locating a third-party supplier and entrusting them with the development or management of software-related duties.
Strongest Trends in Outsourcing/Outstaffing This Year
With an increase in remote working, hybrid work models by the latest Covid-19 protocols, many organizations have adapted to the new normal of doing business.
- Adding robotic process automation (RPA) can induce some intuitiveness to the workflow, boost outsourcing operations significantly by automating repetitive tasks, enable employees to focus on complex and challenging tasks.
- Using cloud-based technologies and CNP’s enable collaboration on multiple levels, and establishes security.
- The growing importance of artificial intelligence makes companies look to outsource AI-driven projects or want outsourcing service providers to touch up their applications with AI. It can also be used to interpret and decipher unstructured data, decipher the information, and boost efficiency.
- Companies will increasingly look for someone who can build Progressive Web Apps (PWA’s) for them, as it eradicates the need to install an app, makes a website available on mobile with a native look and feel, offers excellent user experience, and drives down their cost.
Outsourcing Models
Based on requirements, organizations follow some techniques – the outsourcing model works with.
- Project-based – In this type, an organization hires a development company to initiate and complete their project. While doing this, both parties need to agree to the project’s cost, and deadline before it can begin. The project cost is not dependent upon the number of working hours or the tools (programming languages, scripting languages, frontend, and backend technologies, databases used.
- Dedicated Team – If you wish to delegate many tasks, recurrent tasks, or frequent updates, maintenance, support, testing, deployment, then hiring a dedicated team, in addition to the primary team of workers can pose to be an ideal solution. The cost of the dedicated team is determined by the number of working hours, the cost of the hired developers, the duration of the project, post-deployment maintenance and support.
- Staff Augmentation – It also lets the client measure and monitor the productivity, and continuity of the project. It offers more involvement of the owner and lets them control it creatively.
What Should You Consider While Outsourcing A Project?
Determine your requirements including your budget, target audience, time at disposable, selecting the right service provider with experience, clients, scalability. This lets you decide whom to hire, possible repercussions, and potential benefits. Outsourcing is preferable in 2022 to leverage well-established procedures, maintain a focussed approach, fulfill compliance requirements at a lower regulatory cost, improved operational efficiency, and overall cost advantage.
Outstaffing Models
It comes with two core business models – ‘Cost Model’, and ‘Cost-Plus Model’.
- In Cost Model – The business pays one flat fee to the IT Outstaffing Service Provider to get the development team for part-time, or full-time. The IT Services Company pays the team member’s salary, perks, tool expenses, etc. The salary that an employee receives is not disclosed to the clients, as the IT Service Provider can leash that money based on their liking/management decisions.
- In Cost-Plus Model – It is similar to paying salary, paying bonus, paying overtime, purchasing computer equipment, but you have to make your IT Outsourcing provider pay your Outstaff team member. You need to ensure that the rules of the engagement are clearly defined.
What Should You Consider While Outstaffing A Project?
It involves hiring developers along with the terms and conditions, as the end product will be attested with a full guarantee. Earlier outstaffers used to work remotely and we’re often asked to relocate and join the team.
Outsourcing vs. Outstaffing
Demand for experts across multiple functionalities alleviates the need to find third-party developers to build the project. You can either outsource or outstaff. The core difference between the two terms is: Outstaffing involves hiring experienced professionals to work on the project under the control of the business owner. Outsourcing involves passing the software designing process to a third firm.
Conclusive: Choosing Outsourcing vs. OutStaffing Model
The developers are not accountable for the quality of the final product in outsourcing. While they take full responsibility for outstaffing. Also, outsourcing costs more than outstaffing.
When you hire IT employees, you do not have to pay for taxes, insurance, facilities etc. It also allows you to alter the number of professionals at any time, depending upon your project requirements. However, you might often have to deal with the communication and make your in-house team intrude to erase the implementation mistakes.
However, the price of implementation, quality of services, end product delivery are often considered when hiring offshore developers. It might be preferable for small touch-ups, or maintenance after deploying the project successfully.
In either case, you require your outsourcing development partner to be trustworthy and might consider signing an NDA to protect your business data. We offer offshore staffing services in iOS, Android, PHP, Magento. Looking to reach out, do it now!