Outstaffing vs. Outsourcing: Decoding the Difference

July 30, 2023

What is an IT Outsourcing Model?

Are you tired of juggling multiple IT projects while trying to keep your business afloat? Look no further! Enter the world of outsourcing, where an outstaffing company handles your IT tasks, leaving you free to focus on what really matters - your core competencies. With an outstaffing team of skilled and reliable outstaffed developers, you can streamline your operations and achieve greater efficiency.

Outsourcing has become the go-to business model for companies seeking cost savings and increased efficiency. By entrusting your software development needs to experts in the field, such as outstaffed developers or offshore developers from an outstaffing company, you can achieve significant savings while still delivering top-notch results.

With various development models available, such as outstaffing vs outsourcing, it's essential to understand which approach aligns best with your business needs. Whether you're a startup or an established enterprise, choosing the right model can make all the difference in streamlining operations and boosting productivity. Outstaffed developers or an external team can help you effectively outsource your projects.

What is an IT Outstaffing Model?

The outstaffing model, also known as dedicated remote developers or teams, is a popular approach for businesses looking to outsource software development and bring in specialized talent for specific projects. With outstaffing, companies have the flexibility to scale their resources as needed without the long-term commitment of hiring full-time employees. This approach is often utilized by companies seeking to outsource their software development needs to offshore development or a software outsourcing company.

One of the key advantages of hiring an outsource software outsourcing company is that businesses have direct control and management over the outstaffed team. This means they can closely collaborate with the developers and ensure that their project requirements are met efficiently. Companies can provide guidance, set priorities, and maintain constant communication with the outstaffed team throughout the development process. By partnering with an outsourcing agency, businesses can leverage the expertise and resources of a dedicated team while maintaining full control over their project.

Another benefit of outstaffing is its ability to provide scalability for businesses looking to outsource software development. Companies can easily adjust the size of their remote team of outstaffed developers based on project demands, allowing them to scale up during peak periods or downsize when necessary. This flexibility offered by an outstaffing model enables businesses to adapt quickly without disrupting their operations, making it an ideal choice for those seeking a reliable software outsourcing company.

With an outstaffing model, companies can tap into a global talent pool and access highly skilled outstaffed developers from around the world. This opens up opportunities for finding niche expertise that may not be readily available locally. By leveraging this diverse talent pool, businesses can bring in specialized knowledge and experience to enhance their projects. Outsourcing the hiring process to a software outsourcing company can further streamline the process and ensure access to top-notch professionals.

Difference Between Outsourcing and Outstaffing

  Outstaffing Software Development Outsourcing Software Development
Team Location Developers work remotely or on-site, often in the client's time zone Developers work in the vendor's location, potentially in a different time zone
Team Management Client retains direct control and management over the outstaffed team Vendor manages the outsourced team and development process
Expertise Client has the flexibility to select specific skills and expertise required Vendor provides a pre-assembled team with specialized skills
Communication Direct and real-time communication with the outstaffed team Communication with the outsourced team may involve intermediaries
Cost Usually more cost-effective, as overhead costs are reduced May be costlier due to vendor's management and additional services
Project Control High level of control and involvement in the project Less control as the vendor handles the project management
Security and IP Protection Client can implement and monitor security measures directly Relies on the vendor's security protocols and agreements
Adaptability Easily adaptable to changes in project requirements May require more effort to accommodate changes or new features
Time-to-Market Potentially faster, as direct communication and control speed up the process May take longer due to coordination with the vendor and potential delays
Relationship Builds a long-term relationship between the client and the outstaffed team Typically a project-based or short-term arrangement with the vendor

Outsourcing vs Outstaffing: What's the Difference?

In offshore development, companies hand over their work to external vendors to meet their business needs. On the other hand, outstaffing involves hiring dedicated developers or teams. The distinction between these two approaches lies in the level of control and flexibility they offer for the company's projects.

  1. Control: Companies hiring software developers have less control over the development process compared to outstaffing. With outsourcing, businesses rely on external vendors to manage and execute the project according to their specifications. In contrast, outstaffing allows companies to retain more control by directly managing the hired developers or teams who work on software projects.
  2. Flexibility: Outstaffing offers more flexibility in terms of resource allocation and project management. Companies can easily scale their dedicated teams up or down based on project requirements without being tied down by long-term contracts or commitments. This flexibility allows for efficient resource utilization and cost optimization.
  3. Collaboration: While both outsourcing and outstaffing involve working with external professionals, there is a difference in collaboration dynamics. In outsourcing, communication channels are typically established through project managers who act as intermediaries between the company and vendor team members. In contrast, outstaffed developers become an extension of the company's internal team, fostering direct collaboration and seamless integration into existing workflows.
  4. Expertise: When choosing between outsourcing and outstaffing, expertise plays a crucial role. Outsourcing is often preferred when specialized skills are needed for specific projects that fall outside a company's core competencies or require niche knowledge not readily available internally. On the other hand, outstaffing is beneficial when companies seek long-term collaborations with dedicated professionals who can contribute their expertise consistently over time.

To summarize, while both outsourcing and outstaffing involve working with external resources, companies in the software business must carefully evaluate their specific needs and goals to determine which approach is most suitable for their projects. These approaches differ in terms of control, flexibility, collaboration dynamics, and expertise utilization.

Understanding IT Outstaffing Models and Cost Comparison

Different Outstaffing Models

  • Dedicated developers
  • Project-based teams
  • Extended development centers

Factors Affecting Costs

  • Developer rates
  • Project complexity
  • Location of the outstaffed team

Outstaffing is a popular option for businesses seeking to augment their IT capabilities. By understanding the different outstaffing models available and comparing costs, organizations can make informed decisions about the most cost-effective approach for their specific projects. When looking for an outstaffing solution, it is important to consider partnering with a reputable software outsourcing company like SDD Technology.

One common outstaffing model is hiring dedicated developers from a software outsourcing company like SDD Technology. This involves selecting individual professionals who work exclusively on a project or within a specific department. Another option is assembling project-based teams, where experts from various fields collaborate to achieve business project goals. Extended development centers provide an entire offshore team that operates as an extension of the client's in-house workforce.

Several factors come into play when considering software outsourcing. Developer rates for software outsourcing vary depending on skill level, experience, and location. The complexity of the software outsourcing project also influences costs since more intricate tasks may require specialized expertise or additional resources. Furthermore, the location of the outstaffed team in software outsourcing can affect expenses due to variations in labor costs and living standards across different regions.

In SDD Technology, we offer developers from different countries, such as Poland, Germany, Ukraine, Israel, and Azerbaijan, with a diverse range of skill levels, from middle to architecture, enhancing our competitive pricing advantage. By leveraging a talent pool from various regions, we can precisely match project requirements with the right expertise, ensuring cost-effectiveness without compromising on quality. This multi-faceted approach enables businesses to access a wide range of skilled professionals at competitive rates, making software outstaffing with SDD Technology an appealing choice for achieving successful and cost-efficient project outcomes.

Responsibility for Management and Choosing Developers

In the world of software development, companies have two options: outsourcing and outstaffing. Each model comes with its own set of responsibilities for managing and choosing developers. Let's take a closer look at how these two approaches differ.


  • In outstaffing, the vendor takes charge of managing the entire development process.
  • This means that the company relies on the expertise of the software outsourcing vendor to select suitable developers for their outstaff project.
  • The responsibility for managing and overseeing the work of the software outsourcing development team lies primarily with the vendor. Outstaff is another term commonly used for this type of arrangement.
  • Companies often opt for outsourcing when they want to focus on other aspects of their business while leaving software development in capable hands. However, another option that companies can consider is outstaffing.


  • On the other hand, software outsourcing through outstaffing allows companies to retain full control over the selection process of developers.
  • They have the freedom to handpick individuals for outstaffing and software outsourcing who align with their specific requirements and goals.
  • The responsibility for managing developers and ensuring successful project delivery rests squarely on the company's shoulders. When choosing to outstaff, the company can delegate these responsibilities to a dedicated team of developers.
  • With outstaffing, companies can build a dedicated team tailored to their needs, working closely with each team member throughout all stages of development.

Understanding these key differences in terms of management responsibility is crucial. While outsourcing offers convenience by entrusting project management to an external party, outstaffing grants greater control over developer selection and overall project direction. By carefully considering your organization's unique needs and preferences, you can make an informed choice that best suits your software development endeavors.

Budget, Time, and Time Zone Differences

Budgets may vary depending on whether a company chooses outsourcing or outstaffing. With outsourcing, the costs are usually fixed as the entire project is handed over to an external team. On the other hand, outstaffing allows for more flexibility in budget allocation as companies can hire remote employees based on their specific requirements and work within their financial constraints.

Timeframes can be influenced by factors such as project complexity and team availability. In outsourcing, the timeline is often predetermined, and any delays could result in additional costs. Outstaffing offers more control over time management as companies can directly communicate with their dedicated resources and adjust timelines accordingly.

Time zone differences may impact communication and collaboration in both outsourcing and outstaffing models. When working with outsourced teams located in different time zones, it can be challenging to schedule meetings or address urgent matters promptly. However, outstaffing provides an advantage.

Control and Visibility: Full Control over Development Process

Companies opting for outstaffing enjoy complete control and visibility. With this approach, businesses have the authority to make decisions and allocate resources according to their requirements. Unlike outsourcing, which relies on external vendors, outstaffing allows companies to retain full control over the entire project.

By choosing outstaffing, businesses can closely monitor the progress of their development projects. This level of control enables them to make real-time adjustments whenever necessary, ensuring that the project stays on track and aligned with its goals. Companies can actively participate in every step of the process, from planning to execution.

In contrast, outsourcing may provide less visibility into the development process due to reliance on external vendors. Companies often face challenges in maintaining direct oversight as they rely on third-party providers for executing crucial tasks. This lack of control can lead to potential delays or deviations from desired outcomes. However, by opting for outstaffing, companies can have more control and visibility over the development process.

With outstaffing, companies can maintain a high level of quality throughout the development process. They have the ability to provide immediate feedback and guidance directly to their dedicated team members. This fosters effective communication channels and promotes a collaborative environment where ideas flow freely.

Moreover, when utilizing outstaffing for web development projects, businesses benefit from enhanced transparency. They gain insight into all aspects of the process - including design choices, coding standards, and testing procedures - enabling them to ensure compliance with industry best practices.

To summarize:

  • Outstaffing empowers companies with full control over decision-making and resource allocation.
  • Outsourcing, or using external vendors for certain tasks, may result in reduced visibility and control over the process. This is because companies that outstaff their work rely on these external vendors to complete the tasks.
  • Outstaffing facilitates close monitoring of progress while allowing real-time adjustments.
  • It ensures adherence to project goals through active participation at every stage.
  • Direct feedback channels enable businesses to use outstaffing services to maintain high-quality standards.


In conclusion, when deciding between IT outstaffing and outsourcing for your project, it's important to consider the specific needs and requirements of your business.

Outstaffing offers the advantage of having full control over the development process. You can choose and manage your own dedicated team of developers, ensuring that they align with your project goals. This level of control allows for greater flexibility and customization.

On the other hand, outsourcing provides the benefit of cost savings and access to a larger talent pool. By partnering with an external vendor, you can tap into their expertise and resources without having to worry about managing a team yourself.

To make an informed decision, consider factors such as budget, time constraints, and time zone differences. Outstaffing may be more suitable if you have a specific budget in mind or require developers in a different time zone. Outsourcing might be preferable if you want to reduce costs or need specialized skills that are not available in-house.

Ultimately, the choice between outstaffing and outsourcing depends on your unique circumstances. It's crucial to evaluate your project requirements carefully before making a decision.

If you're still unsure about which option is best for you, feel free to book a free consultation with our specialists here.

Remember, every project is different, so take the time to assess what will work best for yours.


Can I switch from outsourcing to outstaffing (or vice versa) during my project?

Yes! At SDD Technology, we understand that project requirements may change. We offer flexibility to accommodate your needs, allowing you to seamlessly transition between outsourcing and outstaffing models as required. Our team will work closely with you to ensure a smooth switch and continuation of your project.

How do I ensure effective communication with an outsourced team?

To ensure effective communication with our outsourced team, we establish clear communication channels right from the start. We utilize video conferencing tools, instant messaging, and project management platforms to foster real-time communication and transparency. Our dedicated project managers act as liaisons to ensure smooth collaboration and prompt responses to your queries.

What are some potential risks associated with outstaffing?

At SDD Technology, we acknowledge potential risks like language barriers and cultural differences in outstaffing. To mitigate these risks, we ensure that our developers have proficient English language skills and cultural awareness. Regular meetings and status updates are conducted to facilitate smooth communication and address any concerns promptly.

Can I hire an outstaffed team for a short-term project?

Absolutely! Our outstaffing model offers the flexibility to hire developers for both short-term and long-term projects. Whether you need a team for a few weeks or several months, we can provide skilled professionals to meet your project's specific duration and requirements.

How do I ensure data security when working with outsourced teams?

Data security is a top priority at SDD Technology. We implement stringent measures, including non-disclosure agreements and encrypted communication channels, to safeguard your sensitive information. Our developers are trained in best security practices, and regular audits are conducted to ensure compliance with industry standards and protect your data throughout the development process.

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