IT Outsourcing and Outstaffing: Which One to Choose and Why

IT outsourcing and IT outstaffing are two terms that imply using the services of third-party IT organizations. Because of their similar purpose, both concepts are considered to be the same.

When in reality these are two different categories of services with their own specifics. What are IT outsourcing and outstaffing, what are the pros and cons of each system, and how do they differ? Read on in the article.


IT outsourcing is the transfer of control over specific IT services or the entire IT infrastructure to a third-party contractor. The outsourcing company manages the process of performing the assigned task.

IT outstaffing is the hiring of a freelancer, whose official employer remains the outstaffing agency. In this case the customer of the service directly controls and coordinates the actions of the hired workers.

To summarize IT outstaffing services mean the “rent” of personnel for the necessary tasks. When IT outsourcing the responsibility for performing IT functions is transferred to the contractor. That is, the client does not interfere in the execution process in any way, and the contractor is entirely responsible for the result.

What is the main difference between outsourcing and outstaffing?

The main difference between outsourcing and outstaffing is in who is responsible for managing the hired team (or individual person) that performs your tasks.

If it is outsourcing, then the control of the entire scope of work and the management of the team is done by the project manager of the outsourcing company. The client does not communicate directly with the development team.

In the case of outstaffing, the client himself manages both his team and the team provided by the outstaffing company. But this does not mean that the owner of the client company manages everything personally. These functions can be delegated to the company’s technical director or project manager. As for the software development service provider, it is responsible for finding the right candidates, supporting the team, and paying salaries.

Advantages of IT outsourcing and outstaffing

  • Cost reduction. The tax burden on the customer is reduced, no need to spend money on vacations, sick leave, etc;
  • No need to allocate funds for recruiting, training, and other similar procedures. All these issues will be taken care of by the contractor;
  • The exact amount of work is paid. At the same time, a regular full-time employee is entitled to a monthly salary, regardless of workload;
  • Quality performance. IT outsourcing and IT outstaffing imply work with qualified specialists. Thus, the customer is guaranteed a positive result and high efficiency of the IT infrastructure. Besides, there is a possibility to realize projects which are too ambitious for the company’s staff;
  • Minimal risks. During the cooperation, an SLA agreement is signed, where the rights and obligations of the parties are described in detail. The document regulates what and how the contractor should do.

Disadvantages of IT outsourcing and outstaffing

Both IT outsourcing and outstaffing have disadvantages. Let’s start with the latter:

IT outstaffing

Managing the actions is the customer’s task. Even a professional will not get you the results you want if the management is not competent enough. In this case, it is better to prefer outsourcing services;

IT outsourcing

Dependence on external performers. In case of an unsuccessful choice of the company for cooperation, outsourcing will bring only losses and a minimum of benefits.

The main potential disadvantage of both systems is poor execution. The market for such services is oversaturated with non-professionals, and there is a high probability of running into a negligent or unskilled performer. In such circumstances, even an SLA can’t help.

To avoid all these troubles, you should apply only to proven organizations, which have been successfully providing their services for a long time, such as RexSoft. We are engaged in IT outsourcing and IT outstaffing for over 8 years.

Many positive feedbacks from former and regular clients of RexSoft is a proof of the high quality of our services. When you contact us, a positive result of the cooperation is guaranteed! 

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