Extended Teams vs Outstaffing
Don’t blindly wonder if the extended teams model or outstaffing is right for you. To empower business owners like you, we’ve created a list of the pros and cons of each model here, so that you can make the right choice the first time and avoid buyer’s remorse.
Each year, potential clients contact us at BackstageIT and ask us:
” What is the difference between your model (extended teams) and outstaffing?“
This is a very good question. We can certainly understand the need to know the difference, as each business owner needs to determine if we’re the right fit for scaling up their company.
At BackstageIT, we are only focused on helping businesses extend their teams, but the truth of the matter is, an extended team might not be the best fit for you. In fact, outstaffing might be the better option, and by the end of this article, you should know which is right for you.
Let’s start with an explanation of what the difference between software outstaffing and the extended team model is.
OUTSTAFFING is a type of remote employment when a hired person performs all the job responsibilities for a company (client) while officially employed by another company (outstaffing agency). The latter act as an employer and is responsible for salaries, bonuses, and equipment, while a client company provides a worker with tasks and assignments.
An EXTENDED TEAM has a direct and tight relationship with the client’s in-house development team. Both parties are working in close cooperation with each other, sharing the same core values and the same vision of the company. Because they all work for the same company, the extended team brings additional experience without the issues of social cohesion between outsourced and client teams.
- No need to take care of choosing developers: the software outstaffing company builds a development team on their own, although the customer can influence team composition if desired.
- Immediate replacement: if the developer gets sick or suddenly goes on vacation, he/she is immediately replaced the same day by another developer working in the outstaffing company.
- No management headache: you don’t have to worry about team management since the outstaffing company will do it for you.
- No employees: your selected outstaffing firm acts as the employer of your remote development team. This means that you don’t need to have any employees, legally speaking.
- Less motivated developers, which can lead to lower-quality code. Outsourced developers have no tangible connection to your company and no reason to care about your long-term success since they are only incentivized to look at the tasks you’ve assigned them in your contract.
- Higher and less transparent costs result from increased hourly rates and overall expenditures, which are sometimes the result of hidden fees or expenses.
- Full control over the development process: if you have an extended team model, you can manage the development process directly. You establish the tasks your team is working on, schedule those tasks, and operate all the development activities.
- Friendly relations between the in-house and extended teams: all team members know they are in the same boat and have the same goal – the success of your company. These shared values are the key to success.
- Easily track the results: you have direct access to the executed work and can assess the work of your extended team.
- Choose the members of your team: choosing who to hire is beneficial for your company since you can hand-pick a suitable team member who will develop your projects/product.
- Transparency in costs: the payment is composed of extended team members’ salaries, which you can decide based on your budget, plus a management fee that includes administrative costs, etc.
- Responsibility for the team: once you have selected a team that meets the technical and soft skill requirements you are looking for, you are responsible for ongoing communication with your employees and should treat them the same way as you treat your in-house workers.
- Long-term investment: extended teams are partnerships and not suited for short-term projects.
BackstageIT maximizes the pros of extended teams by going beyond finding and recruiting developers. We mirror your brand identity in our offices where your employees will work. It’s like having your own development center in another country – your team will work from BackstageIT but share the same values and vision as your company.
How to decide which team extension model is right for you
When choosing the right model for your project, we highly recommend considering your project goals and specifications. If you have a short-term project or are not interested in the more closely-connected partnership of an extended team, you should opt for outstaffing.
Unlike outstaffing teams, extended ones are not dissolved after a project is completed. They are aimed at long-term collaboration practices. They want as much as you to grow your company and help you improve work processes using best practices. They are motivated team players who won’t be distracted by other clients. If you would like to invest some time and effort in educating a remote team, creating a close connection between the in-house and the remote team, and providing annual trips for knowledge exchange, then an extended team is the solution for you.