IT Outsourcing as a Solution-oriented Approach for Solving Business Challenges
December 1st, 2021Evgenia Kuzmenko
CEOs and CTOs are often faced with the dilemma of either choosing to outsource or out-staff their software development needs, especially when building new projects from scratch. Admittedly, finding the right software developer can most times be an upheaval task. Generally, recruiting for tech positions is among the most difficult recruitment tasks, as competent people are in high demand but in a very restricted talent pool. Hence the rising rate of IT outsourcing. A statista report reveals that the IT outsourcing industry is valued at $92.5 billion and is estimated to hit a high of $413 billion by the close of the year.
If you are not a big tech company, recruiting an in-house software development team may be unwise. This is because an in-house team would require professional diversity, which may be too expensive to assemble and sometimes difficult to supervise, leaving you with the choice to either outsource or outstaff.
So What is Next… Outstaff or Outsource?
Outsourcing and outstaffing appear to be similar concepts and can sometimes be confused to mean the same thing. Of course, both IT models involve contracting remote software development teams from outside your organization to collaborate with the in-house team. But there is a difference, and understanding the differences between outsourcing and outstaffing models will help you decide which method is more beneficial.
Although the distinction between outsourcing and outstaffing may seem logical in theory, putting it into practice is another matter. So we gathered examples of real-life problems we helped our clients solve in order to demonstrate the differences.
Here’s an interesting case
FreightCenter is a third-party logistics company that leverages technology to automate and track deliveries, match orders and ensure swift movement of consignments to end-users. Before us, the company used outdated software to execute operations, and it hampered their efficiency and rating.
FreightCenter needed an upgrade to their software. As a non-traditional tech company, they wanted to employ outstaffing to complement their IT team and upgrade their existing software to a more modernized and relevant program.
Director of System of FreightCenter, Justin, contacted KITRUM to discuss the modalities and possibilities of outstaffing. “We had an idea of what we wanted and I thought we could just do a little tweaking on our existing program with a few experts but it was going to be like pouring new wine in an old bottle, what we needed was a total revamp… I’m glad we decided to go the outsourcing route and let KITRUM build a team they needed and almost create new software from scratch for us. Outsourcing our project saved us time and resources.“
If FreightCenter had gone ahead with outstaffing, they would have successfully worsened the inefficiencies of the former software, wasting time and resources in the process.
Another client says “…We knew we had spent money and time but we would rather get it right in the middle than waste more time and still go back to outsourcing… we needed to rely on the expertise of dedicated professionals.” He further advised, “if it is not a minor update, then outsource it and let the professionals handle it, there are other important things to do, get busy with building a market for your project or meeting up standards and regulations and feel relaxed that your project is in good hands.”
At KITRUM, tech development is what we do, so we have the requisite knowledge and the needed expertise to take on any software development project.
Organizations encounter a recurring hurdle in their quest to expedite, grow, and promote business ideas through technology: the right workforce. You need to collaborate with the right people to turn an original idea into a working product.
The Concepts of Outsourcing and Outstaffing
Outsourcing and outstaffing appear to be similar concepts and can sometimes be confused to mean the same thing. Of course, both IT models involve contracting remote software development teams from outside your organization to collaborate with the in-house team. But there is a difference, and understanding what differentiates both concepts will help you decide which method is more beneficial.
What is Outsourcing?
In simple terms, Outstaffing refers to the employment of expert developers from other firms to work on a project under the direction of the organization’s management. In contrast, outsourcing refers to delegating the design and development of software architecture to a third firm.
The outsourcing firm employs its experts to complete the client’s work. In this situation, the outsourcing firm serves as an employer and is therefore responsible for deciding on an ideal tech stack, recruitment, training, remuneration, tools, and the software architect. The client company just assigns duties to the outsourcing firm.
What is Outstaffing?
The outstaffing concept involves a software development company hiring and maintaining a development team that is completely under the client’s control. In other words, you recruit a remote team to work alongside your in-house staff, and you have control over their activities. You’re in charge of remunerations and providing the required tools and tech stack. Your full-time staff manages this temporary workforce.
The Distinction between Outsourcing and Outstaffing
As already emphasized, outsourcing and outstaffing share some similarities. They are both temporary jobs contracted for a duration or until the end of a project development period. However, the major distinction lies in the management and power of control.
Typically, outsourcing organizations have more management control over a project as the outsourcing firm supervises the entire process. In contrast, the client has limited access to the team and is usually assigned to a project manager.
When you outsource, you employ an entire development team saddled with the responsibility of designing, building, testing and delivering the product. You only need to communicate your idea, and the team handles the rest.
On the contrary, outstaffing occurs when an organization temporarily hires one or more engineers to its development team. As a result, the client’s CTO or project manager, rather than the development company, is in charge of the project’s scope.
Often organizations only go for outstaffing when they need to add a specific skill to their team in the short term. If you intend to develop a program from scratch, then you should strongly consider outsourcing.
Do You Really Should Outsource?
According to a report from Orient, more than 93% of firms employ some form of IT outsourcing to enhance their operations and build a better overall business model. Admittedly, a typical business that utilizes some form of tech, whether tech-focused or not, goes beyond building tech products or services; other aspects of the business also require attention.
The demand and operations of any tech product or service are such that any mediocre development cannot be shielded; it would definitely reflect in the outcome and patronage. So you would want to get it right from the start by ensuring that adequate time and attention is given to every facet of the business.
In essence, outsourcing the development of your software solutions allows you ample time and the required focus to build other aspects of your business while we do what we know how to do best: birthing your tech ideas.
For Justin, from FreightCenter, outsourcing the development of his company’s logistic software allowed him to build other important business areas in real-time and save cost. In his words, “we were only able to launch on the set-date because we outsourced our software development to KITRUM while the team focused on other necessary things.”
Availability of expertise and experience
IT outsourcing can help you make up for the lack of internal resources by focusing on your main responsibilities. All you need is a product concept to get started, and you’ll have access to a full suite of consulting, analytics, marketing, design, and development services right away.
We handle anything from project planning to cost projections to software architecture and design to software development. They do everything, all of the time. As a result, they can create the most effective project plan for each project.
On the contrary, outstaffing requires the business owner to recruit different employees for different duties, assess the quality of their work, manage and direct the team members on the project and task. In other words, you must be fully involved in the day-to-day operations of your extended workforce.
There is no technical requirement
According to Justin, “One of the greatest benefits of outsourcing is being able to accomplish your tech dreams and develop tech products that solve problems with little or no programming skills.” He initially wanted an outstaffing service because he felt it would be better to have the development team under his control with his ideas and partners. Along the line, it became difficult and confusing for him to recommend and provide the development framework and software architecture needed for the job. He approached us, and we recommended an outsourcing development service. We got the job done in real-time and with no difficulty or confusion because it’s our expertise.
When you outsource, you allow our active experts to take charge, which gives you the benefit of having relevant and recent technology.
In outstaffing models, you are responsible for directing and managing the team on the project, which necessitates the employer’s in-depth understanding of the subject. The project will fail miserably if the employer fails to guide the staff properly. The technical job is handled by the project manager in the outsourced model. You simply need to communicate your idea and the product you require, and he will lead the team accordingly.
Lesser operational cost
People erroneously believe that outstaffing is less expensive when building from scratch, but we forget all the hidden and unexpected costs associated with this concept. When you hire devs, you are responsible for wages, bonuses, taxes, and you may also have to purchase tools and stacks that you may not need again.
The outsourcing firm already has many required resources from recurring jobs, bringing down the service cost when you outsource.
Faster build-to-market time
Outsourcing is mostly more efficient and faster to deliver than other options. According to Justin, he was impressed at KITRUM’s ability to begin work almost immediately and the ability to deliver before the deadline. Outsourcing firms are already experts hence interpreting an idea, designing, and developing should not take as much time as normal.
You have fewer risks
Every business venture entails some degree of risk. Markets, rivalry, regulatory measures, financial conditions, and inventions are all subject to rapid change. With specialized sector experience, outsourcing companies take and handle most of this risk for you, particularly security and compliance issues. In general, they are far better at evaluating how to minimize risk in their fields of specialization.
KITRUM Solution-oriented Approach
We approach every outsourced project with a definitive plan which ensures that our execution aligns with your idea, and we deliver exactly what you have asked for. Here is a breakdown of our approach;
· Interpretation / Planning
Software development projects start with an idea, which is later developed and recreated into reality. At this stage, we determine the feasibility of your idea and how we can come in to make it work.
Interpretation / Planning
After conceptualization, we interpret your ideas and demands to ensure a good grasp of what you want. The planning stage ensures that all the relevant tools, frameworks and materials needed are indicated and made available. Also, we identify those who will make up the development team and prep them for the task.
In the design stage, the software architecture and the overall design of the program are determined. Your original idea would influence this design and would further guide our developers in the next stage.
This is where your idea is brought into reality. Here we translate our interpretation of your idea and the product design into a usable product.
At the end of the development phase, QA analysts test the program against several relevant indices and standards. For instance, there would be a performance test, penetration test, usability test, etc.
When your program is satisfactorily ready and approved by our experts, we deliver it for further testing or deployment.
Why Choose KITRUM?
At KITrum, we understand that you require our expertise to help birth your idea and develop your software projects. We have our expert team of dedicated experts who take on every project professionally and are committed to delivering value.
Consultancy / Advice
You may not outsource all of your IT projects; however, if you are building a new project from scratch, your project has particular requirements or is unrelated to your primary business, outsourcing is the ideal option. And if you’re confused, we are here to give you unbiased and professional suggestions on how to go about outsourcing your project.
You can rely on us
As a starting point, an outsourcing provider is supposed to be reliable. At KITrum, we are committed to delivering your ideas, and as such, we see ourselves as an extension of your company and not just a contractor. Because we would be a part of your success story, We handle every project like it’s ours. We believe that your win is our win.
We employ Agile methodology
Agile software development is the most popular approach. Agile is used by 71% of firms, and agile programs are 28% more efficient than traditional projects. We employ the Agile methodology to give you the best version of your idea.
Communication is our forte
We won’t leave you in the dark; we will always update you and carry you along all the way.
40% of our clients who first contacted us with outstaffing requests changed their minds and moved to outsourcing; this indicates that outsourcing always gets the job done more efficiently.