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Denis Grankin Head of Sales Department
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Outsourcing vs Outstaffing in Poland: What Is The Difference And What To Choose?

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outstaffing and outsourcing models in software development

Companies from all over the world choose Poland as one of the best IT outsourcing destinations. And with good reason. Poland is one of the top 3 countries for foreign direct investment. Most of the investments are directed to the IT sector, in particular IT outsourcing.

Among the factors contributing to the growth of IT outsourcing in Poland are the country's stable economy, a developing business environment, a vast talent pool, a powerful R&D market, a Western-type culture, and, of course, favorable prices for IT outsourcing services.

The difficulty arises when you have to decide whether it will be outsourcing or outstaffing. At first glance, these models are similar, but there are significant differences between them. It is important to find out these differences beforehand so that you can choose the right partner and the best terms of cooperation.

Let's find out the big difference between outsourcing and outstaffing in Poland, and which one is better for your business.

IT outsourcing and IT outstaffing in Poland: How does it work?

The global IT outsourcing market, estimated at $342.9 billion in 2020, is projected to reach $410.2 billion by 2027. The industry is showing rapid growth, and this is true for both outsourcing and outstaffing models. But it's up to you to decide what's right for you.

DDI Development, as experienced representatives of the IT outsourcing market in Poland, is ready to help you with this issue.

IT outsourcing: What is that?

IT outsourcing model is a comprehensive collaboration model. It involves hiring a dedicated team in Poland, consisting of developers, QA engineers, UI/UX designers, project managers, and business analysts. The hired team is expected to be go-getters to handle a specific project or several projects.

Don't worry, both the process and the result are under control. A team of engineers and other technicians hired in Poland will take care of all aspects of your project, from concept and design to testing and finalizing the product.

The project manager is expected to be the contact person to whom you will voice your questions, changes, and requirements, and with whom you will interact during the project.

IT outstaffing: What is that?

IT outstaffing means expanding your internal team by hiring individual engineers while they continue to be employees of the IT company in Poland. In other words, you get proven specialists from an outsourcing team to maintain your projects or tasks. With outstaffing, you avoid wasting time and the risk of hiring the wrong developer.

With staff augmentation, you are guaranteed to add experienced engineers with the necessary knowledge to your team. The hired developer or team of programmers will temporarily help you to perform certain tasks or can build some projects.

The differences and similarities between outsourcing and outstaffing are discussed in more detail below. Why do you need this? To make sure you choose the most appropriate model for working with an IT team from Poland.

The difference between IT outsourcing and IT outstaffing in Poland

A quick look at the outsourcing and outstaffing models shows only similarities. In both cases, you hire a developer or an entire team to perform a project or specific web or mobile development tasks; in both cases, specialists work remotely. So what's the difference? The difference lies in the project management approach. And it's not about the Agile project management approach or any other. It's about who is responsible for the result and who has control over the team.

IT outsourcing. The project manager of the Polish IT company you are working with is responsible for the process and the results of the work. However, the key role belongs to you, the customer, because you set the tasks, define the goals, and give instructions.

Usually, the outsourcing service provider operates on a project-based business model, that is, the client outsources the project from A to Z. In this case, the client has no access to the team itself, and this team usually manages several client projects simultaneously.

IT outsourcing model

IT outstaffing. Your team expands with external developers hired in Poland, while your in-house project manager oversees the project. Outstaffing can also be called a form of remote employment, in which a hired engineer officially works for a Polish IT company, but performs all job duties for the client. The employer is responsible for the salary, perks, and equipment needed for the job, while the client company provides the worker with tasks.

IT outstaffing model

As you can see, in the case of outstaffing, your company will need more technological expertise, since it is your CTO or project manager who will manage the team, including the outstaffed engineers.

Here is a more structured way to distinguish between IT outsourcing and IT outstaffing models in Poland and in general:

  IT Outstaffing  IT Outsourcing 
Responsibility levels  The main responsibility lies with the customer company because it controls the progress of the work and manages the project.  The main responsibility lies with the outsourcing team. However, in this case, the client also influences the end result. 
Project Management Approach  The client manages the hired team and the tasks/project.  Tasks or a project are managed by a project manager on the side of the outsourcing team. 
Goal To hire dedicated engineers with the appropriate competencies. To build a product from scratch or to improve an existing one. 
Time to get started  It takes less time because the professionals you are looking for are already within the contractor's team.  It takes longer because the outsourcing team needs to assess the scope of the project, draw up specifications and assemble a suitable team. 
Costs needed  If you hire one or two developers, it will cost less compared to the outsourcing model.  Outsourcing is more expensive than outstaffing, but at the same time cheaper than dealing with software development in-house. 
Engineer wages  The IT outstaffing partner is responsible for the team's payroll.  The client pays for the services of the software development team (in full or in stages). 

IT outstaffing and IT outsourcing: Pros and Cons

Now that you better understand the difference between IT outsourcing and IT outstaffing in Poland, let's move on to their pros and cons. Who knows, it may happen that your final decision will be based on the following points.

IT outsourcing advantages you may benefit from

IT outsourcing can be your smart choice. The key benefits are as follows:

  • No recruitment hassle: Third-party IT companies have proven methods for attracting new talent and an extensive network of contacts, so all hiring issues will be handled in a streamlined manner.
  • No management hassle: The project manager on the side of the outsourcing team handles management and technical issues. He or she is responsible for code quality, task completion, and overall management of the outsourcing team.
  • No hardware costs: All team costs are covered by the outsourcer and included in the cost of development services.
  • Get to work quickly: The outsourcing company you partner with can get to work as quickly as you need, expanding the team with additional engineers as needed. This is thanks to an extensive pool of technicians, allowing them to handle several projects at once.
  • The end-result as a goal: IT outsourcing involves hiring a team to handle the project until it reaches its goals. That's why the outsourcing team scrutinizes the specification (also an SRS document) and goes through a multi-step discovery phase to get to the MVP.

IT outsourcing disadvantages you may face with

Outsourcing is not suitable for every business, and here's why:

  • Control of the project is out of your hands: You have less responsibility, but also less control. The project is completely managed by the IT outsourcing partner's project manager.
  • Communication gaps: Since the IT outsourcing team is hired in Poland, they work remotely, so you need to communicate with the whole team online. There may be some trouble with this.
  • More costs: Compared to outstaffing, outsourcing costs more because you're bringing in a team of experts rather than one or two.
  • Limited access to the code base: When working under the IT outsourcing model, the customer company usually signs a non-disclosure agreement with the vendor. This guarantees you the rights to the written code and also increases data security. However, while the project is still in the web development or application development stage, the outsourcing team will only provide you with demo versions of the intermediate deliverables. This is to avoid possible data leakage or theft.

pros and cons of IT outsourcing

IT outstaffing advantages you may benefit from

Here are the reasons why many companies prefer IT outstaffing:

  • Low cost and no hassle with payroll: You can hire as many developers as you need, which means you manage the total cost of IT outstaffing services. In addition, there are no headaches related to payroll because your outstaffing partner takes care of that issue.
  • Full control over your team: When you expand your team with dedicated developers from Poland, you get full control over their workload and results. Outstaffing is good for teams with strong technical expertise and extensive experience in managing software development teams.
  • Transparency of work: You see the results of hired Polish engineers, you know how much they cost you and how you can optimize cooperation within the IT outstaffing model.
  • Flexible and hassle-free hiring: You get hand-picked experts, and the company supplying you with coders takes care of all the hassle of finding, screening, and hiring developers. At the same time, you can adjust the set parameters and hiring process at any time. You can change software development metrics, expert requirements, or functional and non-functional requirements (SRS document) for the product to be developed.
  • Get started quickly: Outstaffing quickly provides you with the personnel you need, so you can meet your customers' needs or get your product to market in the shortest time possible.

IT outstaffing disadvantages you may face with

Among the obvious disadvantages of outstaffing are probably the following:

  • More hassle and responsibility: You are expanding your in-house team with external employees, which means you will have to be responsible for their workload and efficiency. In this case, it is better to have a strong engineering department or an experienced project manager on board.
  • Communication issues: Whether you hire a team or a single engineer, you will have to communicate with them one way or another. If the developer's culture and time zone are very different from yours, there is a risk of miscommunication. Hire developers using the IT outstaffing model in Poland to avoid obstacles that may arise.
  • Planning risks: Since you lead the team, you are responsible for the planning process. Without the proper skills to plan and evaluate a project, you can make costly mistakes.
  • Risk of losing a developer: When hiring developers through an outstaffing model, pay attention to the working conditions that the vendor offers to its employees. If the engineer is not satisfied with the working conditions, he or she will quit sooner or later, which means quitting your project, too.

IT outstaffing model

IT outsourcing and outstaffing scene in Poland

Poland is a member of the European Union and until 2015 had the highest GDP growth of any country in Europe. Poland's economy is so stable that it withstood even the crisis caused by the COVID-19 pandemic.

Poland's technology sector has shown particular growth in recent years. Today, there are about 400,000 technicians in the country, and Poland itself ranks 15th in the world in terms of digitalization.

Software development in Poland has penetrated into almost all industries and has become the main driver of the rapid growth of the entire IT market and related infrastructure as well.

The IT/ICT market accounts for 10% of Poland's GDP (it grew to $595,916 million in 2021). All this has also given a boost to the number of IT outsourcing companies in Poland. According to Statista, IT outsourcing is one of the most promising areas of the technology sector in Poland.

Why choose Poland as an outsourcing and outstaffing destination

When you choose Poland as your IT outsourcing or outstaffing destination, you get the undeniable advantages described below.

Poland as an outstaffing and outsourcing region

Cultural and geographical proximity

It is easy to outsource and outstaff in Poland because the country is geographically close to Western and Central Europe.

It is also easy to get to Poland by plane from North America and Australia, which is possible thanks to Poland's developed air connections with the world.

Since Poland is a member of the European Union (EU), you get the following advantages:

  • Less paperwork and trade restrictions, which makes things easier;
  • A similar culture for seamless communication;
  • Compliance with the EU General Data Protection Regulation (GDPR) for secure collaboration;
  • Seamless communication between teams thanks to a convenient time zone (e.g., the difference between Poland and the UK is 1 hour).

IT outsourcing and outstaffing in Poland are cost-effective

On average, a software developer in Poland (whether a front-end developer or a back-end engineer) earns about 16 euros per hour. These figures are lower than the average salary for developers in the EU but also higher than their counterparts in India or Latin America. On the other hand, when you decide to outsource or outstaff in Poland, you get the high-class European work ethic and culture on your side, as well as the solid technical experience of Polish frontend/backend coders.

Technological innovations to strengthen your project

Poland is known for its engineering advances in areas such as artificial intelligence (AI) and cloud computing. Currently, the IT outsourcing industry in Poland is already shifting from traditional outsourcing to cloud outsourcing and SaaS. The market value of SaaS in Poland is projected to grow to $536.4 million by 2024.

As for AI, Poland ranks 7th among 27 European countries in terms of AI growth, according to the State of Polish AI 2021 report.

Qualified engineers to meet your needs

Poland is notable for its strong technical education. Particular attention is paid to STEM education. There are 18 technical universities in Poland with more than 74,000 ICT students. All that said, you can choose from a large number of specialists well versed in your field.

IT outsourcing vs. IT outstaffing: Which one is right for you?

Now that you know the differences, let's talk about how this information can be applied to your business. Whether you need IT outsourcing or would rather go for outstaffing depends entirely on your needs.

Go for outsourcing if:

  • There are no in-house experts to manage your development team;
  • Your company is not in Tech;
  • You need to manage client projects without distracting your core staff from key tasks.

Go for outstaffing if:

  • You have well-oiled processes for dealing with remote teams;
  • There are specialists on your team with experience in managing technology projects;
  • There are several urgent tasks that need to be addressed in the near future.

outstaffing vs outsorcing

It should be realized that each case is specific and depends on many factors. Some of them are outlined below.

What is the challenge?

To decide what to choose - outstaffing or outsourcing in Poland, consider the type of problem and the needs of your project. Outstaffing is suitable if there are difficulties with several tasks, while outsourcing is better in the case of developing a project from scratch.

How many tasks do you have?

If tasks arise one after another, it is better to resort to outsourcing. If you need to keep the project viable, or if tasks are already distributed and need to be solved, then outstaffing is more effective.

How long will it take?

With outstaffing, specialists can get to work quickly, whereas with outsourcing it will take some time to gather and analyze project data and clarify requirements.

What are the costs?

Outstaffing is cheaper because you hire a small number of specialists, which means lower costs. On the other hand, in terms of efficiency, IT outsourcing is still more profitable.

How to find and hire an IT outsourcing or IT outstaffing services provider in Poland

Any information about companies providing IT services in Poland is available to you in two clicks. On the one hand, this makes the search efficient, but on the other hand, it makes the choice more difficult.

Some tips:

  • Do a little market research and get to know all the IT companies in Poland you are interested in.
  • Look carefully at customer reviews of the company you have chosen.
  • Make an introductory call to find out how your request will be handled and whether they can provide the service you are interested in on terms you are happy with.

Feel free to contact DDI Development if you would like a detailed explanation of why outstaffing or outsourcing is right for you. We are specialized in both development models, so we can help you choose the most suitable option.

IT outsourcing and IT outstaffing by DDI Development:

  • Our team consists of qualified engineers with extensive experience and proven expertise. They are not newbies from the street, but people with whom we have completed more than one complex project and whose qualifications are beyond doubt. We carefully form our talent pool, and for good reason. Thus, we can provide you with the developers you are looking for in the shortest possible time, which means we can solve your needs quickly and efficiently.
  • If there is no suitable specialist in the DDI Development team, we will go to the labor market to find him or her. Give us 48 hours and the right person will be found.
  • You have access to any expert and candidate and can interview until you decide on developers.
  • At your request, we can conduct additional technical background checks on candidates to make sure they are qualified.
  • No hidden costs or risks - we are transparent both in terms of hiring and payment.
  • By choosing us, you become part of a big family. There are already loyal customers who once decided to work with us on one project and stayed with our team for many years.

outsourcing and outstaffing

Bottom line

Whether you choose IT outsourcing or outstaffing, product quality and an honest partnership must come first. For that, choose Poland. In terms of IT outsourcing and outstaffing, Poland wins in many ways.

There is a steady inflow of qualified engineers (currently mostly from Ukraine), stable growth in the ICT industry, and a strong technology community that allows you to find cutting-edge solutions for your projects.

Poland is suitable for those businesses that are interested in a reliable and stable technology partner, whether outsourcing or outstaffing. Either of these services can help your business reach new heights in the most efficient way.

Give us a call or drop us an email so we can give you a detailed answer and help with your request. Solving IT outsourcing and outstaffing issues is our job.

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