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Outsourcing Services: Types and Responsibility Scopes

Outsourcing firms often assist their clients through outstaffing services. An example of these services would be a vendor providing Company X with talent and administrative assistance while the whole management is carried out by the said Company X.

An outsourcing vendor in an outstaffing model should be able to fulfill the following responsibilities:

• Recruiting includes identifying specialists based on client requirements, conducting initial interviews, and referring newcomers to clients for follow-up interviews.
• Providing workspace and IT assistance to outstaffed specialists (often this includes giving laptops, access to the internet, and comfortable working conditions).
• Financial support for specialists (paying their salaries, providing accountant/layer services).
• Performing HR processes: communication support, conflict resolution, additional perks at the workplace, team building activities. 

When it comes to outstaffing, clients face the following important responsibilities: 

• Clearly stating the requirements for needed specialists (so that the vendor can find the right candidates).
• Conducting interviews, including technical ones, and choosing the right team members.
• Onboarding to the project.
• Providing an overview of the project’s vision and objectives.
• Offering collaboration and communication tools (Trello, Asana, Jira, etc.).
• Educating employees about the security of your data.
• Manage the newcomers: assigning work, monitoring their progress, refining project requirements, planning future tasks, etc.

Are talent outstaffing and classical outsourcing different? Definitely! 

Usually, classical outsourcing is about the client delegating or sharing the responsibility of managing a project or part of a project with a vendor. From the selection of talent to the implementation of the product, you and your team work together to meet business objectives. During outstaffing, your vendor is just responsible for providing a working environment, paying your specialists on time, and making sure they feel comfortable at work. Nothing more. You are responsible for making things work as such – you are managing new people. 

In short, this service model suits companies that lack some talent (e.g. do not have in-house backend developers) and are just looking for new staff. It will work out if you have enough managerial capacity and technical expertise. 

Imagine it as hiring employees as part of your in-house team but allowing them to work remotely. Additionally, you get a wonderful perk – you won’t have to worry about administrative matters! 

Pros: Full control over the management, lower costs (you don’t have to pay for PM activities), delegated administrative processes, access to the talent pool.

Cons: Your management will determine your staff’s efficiency. You do not benefit from a vendor’s expertise – only their talent. 

Partners who realize that they cannot manage a new team or do not have the required technical, industrial, or managerial skills can refer to a project management service from the vendor. 

Essentially, they will now hire not only some experts, but a whole dedicated team in its classical sense. 

Using this model of service is best for clients who require long-term collaboration and expertise from their vendors. Collaboration models like this one are popular because not only do you get a team of professionals specifically selected to suit your needs, but you also get a vendor to manage or co-manage the project. As a result, much of the work is simplified for you. For example, you can even delegate some parts of the project entirely to these teams (e.g. website development, backend support for an existing solution). 

Dedicated teams aren’t extensions of your in-house personnel. Usually, they will have their approaches, different frameworks, and managerial methods. 

Dedicated teams can be composed of different specialists, depending on your business needs. But, in the case of IT software development, it usually consists of these roles:

• Backend developers who create the server-side of your application.
• Frontend developers who create the user-side of your app (everything you can click, see, and read on the website).
• QA engineers ensure the quality of the app and make sure there are no defects.
• UX/UI designers create the user interface and ensure the flow of the product is logical.
• Business analysts elicit requirements and convey them to the development team.
• Project managers plan the project scope, monitor the team, assign tasks, manage dependencies.

Pros: Delegated management, more effective development team, faster reaction to needed changes. 

Cons: The need to constantly refine requirements, less management power, and control over each specialist, higher costs.  

In project-based outsourcing, the most responsibility belongs to your vendor while you have the least. The vendor will form a team, manage it, select the technical stack, and generally guide the project from beginning to end.  

While the success of the project will depend on how well the vendor performs the job, your responsibility does not disappear entirely. It is your responsibility, as the client, to explain the full requirements of the project to the outsourcing company’s project managers and business analysts. Afterward, they will form a team and see the project through to completion. You will, however, need to update your requirements throughout the project and provide timely feedback. 

This kind of outsourcing service is usually best suited for those who do not really understand how software development works, don’t have the necessary technical and domain knowledge and are totally reliant on the vendor’s expertise. As a result, you have the least managerial power: the vendor selects the team members, the delivery framework, and the methodology itself. As a result, project-based outsourcing collaborations are often fixed-priced or time- and material-based. 

Pros: almost all work is done for you, you can rely on the vendor’s expertise and only refine requirements.

Cons: the need to be very careful when choosing a vendor, little control of the actual work.