Outstaffing vs. Outsourcing: What’s the difference?​

How best to Outsource the Programming of Software

The software industry is growing. The IT market is looking for workers. Recruiters are increasingly finding it a headache to find employees who are well trained and affordable at the same time. More and more often, companies are therefore outsourcing the development of the solutions they need.

Different models address how companies can delegate the development of software solutions to other companies. Outsourcing and outstaffing are two fundamentally different IT sourcing concepts that should be used to decide whether to outsource IT development. This paper looks at the advantages and disadvantages of both concepts.

by Feras Tanan

Feras Tanan, head of the software development team since 2018, has IT degrees from the universities of Damascus and Darmstadt. He has been living in Darmstadt since 2015 and from there is responsible for the L-One employees in Damascus.

How IT outsourcing works

In software development outsourcing, a company commissions another company to carry out a project from A to Z. The client is not involved in the development process. The client is not involved in the development process. He neither leads the development team nor supervises the development process or solves technical difficulties.

Outsourcing software development is best suited for non-technical companies without in-house IT know-how. The finished solution is purchased. The company can set up an operational interface with the outsourcing provider with an IT project manager and receive regular updates.

› You have an idea for a digital product? We have already developed products in these environments …

› You want to analyse and process large amounts of text data? 
You can read here how Natural Language Processing supports you in this …

»All management around recruitment, leadership and training is the responsibility of the service provider. For outsourcing as for outstaffing.«

Lionel Born, Founder and CEO of L-One Systems

Before starting an IT project, the arguments for or against outsourcing or outstaffing should be examined. If the chosen project form is a good fit for the company, it will make a decisive contribution to the success of the software development:

Pro Outsourcing

    • no management effort for recruitment, administration, training or other HR activities on the part of the contractor
    • no technical supervision required by the contractor, purchase of the final product
    • guaranteed use of the latest technology during development, as the outsourcing contractor is a specialised IT company

Contra Outsourcing

    • The client incurs higher costs for outsourcing compared to ouststaffing
    • no direct control over development team and development process
    • no development of in-house know-how for software solutions

How IT Outstaffing works

With outstaffing, a company expands its internal development team to include the development services of an outstaffing provider. The client concludes a contract with the outstaffing service provider for the provision of remote developers. As with outsourcing, there is no need to employ your own staff with outstaffing.

Together we realise
your product idea

Contact us to discuss your project requirements. We will be happy to bring our cross-functional knowledge to your project.

» Contact us

The client assembles the remote team according to the required technologies (PHP, Node.js, Python, …) and manages the remote developers. The remote team reinforces the client’s team for the agreed time and project framework. The structuring of the development process and the distribution of tasks to the remote developers is carried out by the commissioning company. All HR tasks that arise are taken over by the outstaffing contractor.

With outstaffing, the client's in-house developers are directly linked to the contractor's development team - an important prerequisite for close and productive cooperation

Companies are increasingly working with outstaffing teams instead of hiring their own developers. On the one hand, outsourcing the time-consuming organizational management for the additional developers relieves the burden on their own HR management. This eliminates recruitment procedures, induction, training, payroll accounting, accounting and ensuring employee satisfaction – and last but not least, fixed costs. 

On the other hand,  the outstaffing process means that  highly qualified but affordable developers are available very quickly. 

Advantages and Disadvantages of Outstaffing

Reputable providers of outstaffing services offer access to a large pool of certified developers with a variety of specialties (IT stacks). This includes solid programming skills for the development of different applications.

Pro Outstaffing

    • The client does not need HR-related activities such as recruitment, training or administration
    • lower costs for staffing compared to outsourcing
    • direct access and control over the development team and the development process
    • Increase in internal know-how

Contra Outstaffing

    • Additional effort to set up a development process that is followed by both the internal and the external development team and where both teams interact productively
Head of Outstaffing at L-One Systems Feras Tanan
The L-One team in Darmstadt is an experienced German contractor. The highly qualified development team in Damascus creates a price advantage for the development.

Outsourcing and Outstaffing at L-One

Our clients benefit from our many years of experience as an IT service provider when it comes to coordinating processes between internal and external teams. We align our communication tools with those of our clients. We work with contemporary programmes such as Slack, Microsoft Teams (including the various Microsoft 365 applications), Trello, JIRA, Bitbucket and other collaboration software that simplifies location-independent collaboration.

In addition, our clients can define training priorities. 

»What our clients appreciate about the collaboration is that the internal and external teams learn from each other. The time difference is only one hour and allows for a fluid exchange.«

Valerie Dietsche, Customer Relationship Manager bei L-One Systems, Darmstadt

Outsourcing and outstaffing projects usually involve teams working remotely. The provider must ensure that this does not affect the quality of the development service offered and that the client achieves the set goals with the service provided.

At L-One, we describe our outsourcing/outstaffing service as Made in Germany. We attach great importance to meeting the quality demands placed on us and our services.

Requirements for digital product development

The development of digital products brings with it special requirements. Companies have to make fundamental technical decisions ahead of programming: the vision, the digital ecosystem of users and the scalability of the solution.

L-One supports companies in this initial phase of digital product development to set the right course. In doing so, our experts contribute their know-how and experience from ten years of digital product development.

Whether NLP application, contact platform, booking system, translation service or app: it is essential to prioritise the features correctly. Only in this way can companies develop digital products that create real added value for their users – and thus succeed.

Lionel Born und Feras Tanan: Outstaffing bei L-One_Systems
L-One founder and CEO Lionel Born, Head of Software Development Feras Tanan: Outstaffing is the process of expanding internal IT capacities with a remote team. Client and contractor act as partners and benefit equally from the cooperation.

Data protection, security, availability and communication competence are implemented reliably and transparently by the L-One team. To this end, we apply appropriate guidelines and protocols.

Especially for the development of digital products, both models – outstaffing and outsourcing – ensure that highly qualified but affordable developers are available very quickly.

Find the best concept for your business

Do you want to move your software projects forward quickly and avoid costly recruiting and training processes? Find out which of the options – outsourcing, outstaffing – or a hybrid – best suits your digital product idea, the project and your company! 

The easiest way to do this is to talk to our experts. Make an appointment now.

Links

› Distinguish good from bad outsourcing service providers in advance: checklist with 22 questions (in German) …

› A software product needs a solid foundation – here’s how to go about it …

› Get your digital idea on the road! To the project request …