By looking at the names, you can safely assume that both involve another person or company performing a task for you but we are going to take a closer to so that you are able to make a clear decision.
When you choose to outsource a project it is because you would like a third party to complete the project from start to finish. You will have contact with the project manager you decide to hire but you will not have contact with their team, mainly because they are the project manager’s staff.
Outstaffing is when you only require a certain part of the project to be completed. It is an older concept than outsourcing and is more commonly known as subcontracting. When outstaffing, you will work closely with the service provider but they are not responsible for seeing the project through to the end.
Advantages and disadvantages of outsourcing
The company that you outsource to is responsible for everything, and in terms of IT, this includes the quality of the code. As the owner of a business, you will already have a mountain of obligations, by outsourcing you take away the responsibilities, including the task of hiring staff members. You also save on costs as the outsourcing company provides all the hardware and software.
On the downside, the hourly wages for outsourcing are generally more expensive so you can expect higher costs. You are also, to put it simply, giving all the control to somebody else- a difficult ask for someone who runs their own business!
Advantages and disadvantages of outstaffing
The main advantage here is that as the business owner, you still have complete control over the project. You are in charge of hiring the team and therefore you are the person who pays the staff. You are able to hire the most experienced team while not having to worry about higher costs and taxes. Throughout the process, you will be able to have contact with any of the service providers.
Unlike outsourcing, you will have to communicate with the whole team. This is a positive but it can also be a negative if you do not have the right lines of communication open. When outstaffing, you are still carrying the burden of responsibilities.
Deciding which is the right option for you
This is a very individual decision. It will depend on the type of project you have in mind, how much of the task is already underway (if any), the abilities of your current staff and the funds you have available.
Let’s look at a simple example:
Fred wants a cake, he has the ingredients but he doesn’t have the recipe or an oven on top of that he has huge, clumsy fingers and will never be able to decorate it. In this instance, it would be wise for Fred to outsource the project, tell the project manager exactly what he wants and wait for the results. His project manager will then talk to the baker about the flavor and the decorator about the details.
George, on the other hand, is quite skilled at getting his cake to rise and adding the filling, but he has no idea about decorating. In George’s case, he will need to outstaff just one part of his project, the decorating of the cake. He contacts ‘International decorators’ and they set him up with the perfect cake decorator.
The most important thing for you to do is to look at all the options available and decide which is best for your situation.