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Outsourcing or Outstaffing: Do it Right With 10 Effective Tips



Outsourcing or Outstaffing: Do it Right With 10 Effective Tips

Outsourcing and Outstaffing are the two most popular practices that are widely approved and preferred by businesses. Such models help to fast-track the development process and also save a lot of time & money. Both the models allow businesses to utilize the valuable resources and experience of the employees working from any part of the world.

The approaches are gaining traction with many companies across industries, and such models are the best for specific domains, and the IT industry is one of them. So keep reading to know more about Outsourcing and Outstaffing practices and effective tips to find the best fit.

The Difference between Outsourcing and Outstaffing

People often assume Outsourcing and Outstaffing are the same things, but they are not.

Software Development Outsourcing refers to a model where a company hires workers from another company to get specific tasks done. The IT industry can be developing an app, a website, software product, etc. Often, Outsourcing means that the contractor will carry out the entire scope of work and not just one or two tasks. For instance, if you want to develop a mobile app, they will deal with everything, from technical requirements to maintenance and final checks.

If you choose to outsource, you will get a project manager assigned to your project. They will interact with you and also handle the entire team.

On the contrary, Outstaffing is a type of model in which a third-party worker or a team performs your work. The third party is officially employed by another company but performs the work for you. In Outstaffing, the customers control the entire scope of work, and they have direct access to the outsourced team. When you outsource, you have to manage the hired team and your own; however, the Outstaffing team will handle the payroll.

This approach works best when you already have a development team but lack some expertise required for a particular project.

Outsourcing vs. Outstaffing: Looking for the Best Fit

There is no one-size-fits-all, and no one can tell you what to opt for. Every situation is unique and requires consideration. To develop the best fit, you need first to evaluate the available resources at your disposal.

If you don’t have a software department in your company and have enough funds to accomplish your project, Outsourcing is the option for you. On the contrary, your team doesn’t have enough strength, and you can seamlessly manage a third-party team and yours to complete a project, outstaffing is the best choice for you.

When deciding between Outsourcing and outstaffing, you need to be aware of the general principles on which the models work.

How does Outsourcing work?

When you are required to build cooperation with your outsourcer, a universal algorithm is followed.

  • Draft and allocate the required budget.
  • Look for an experienced and competent outsourcer.
  • They will need a product requirements document that encompasses all priorities concerning your needs.
  • You will have to brief the outsourcer about your requirements and the details of the project.
  • You should schedule regular meetings with the team working on your project to know the progress made and discuss the modifications that may arise.
  • In the end, you will have to evaluate the results and give feedback on the services availed.

How does Outstaffing Work?

When you choose outstaffing, a different set of activities are performed to obtain the desired results.

  • Just as you hire candidates, you need to hold a selection campaign to look for IT experts who would be a great fit.
  • The final project requirements are to be articulated to make sure that all the employees proceed together.
  • Furnishing the required software to ensure smooth workflow.
  • If needed, the onboarded team is to be trained and then provided with a workload.
  • Monitor the performance of the outstaffed team.
  • Provide regular feedback on how they are performing and the areas that need improvement.
  • Evaluate the quality of the deliverables and suggest necessary alterations.

Make Outsourcing and Outstaffing Great (Always): Useful Cues

  • Start with Goal Setting and Scheduling:

Whether it is Outsourcing or outstaffing, you need to determine the goal of your project. You need first to know which model you will choose. After hiring a team, you can then communicate your objectives to the vendor to get started. It would help if you then supplied them with a complete list of the details of your project. With more accurate information, they will let you know the cost and duration of the project.

  • Prioritize Finding the Right Vendor:

When picking vendors for your project, you need to consider a few essential points, the competence domain of your vendor, their portfolio, past client’s reviews, etc. Other crucial considerations include language barriers, timezone, work ethics, cultural background, etc. This will narrow down the options for you to decide on the best company.

  • The lowest bid is the dirty word:

It may sound tempting, but you should disregard the vendor who charges the lowest rates. You cannot expect to get quality at thrift prices; hence, such a decision may make you compromise on the key performance indicators of your software product.

  • Rule out a fixed-price offer:

In the beginning, if you know how much you will have to pay, you will have a sense of control and safety since all upcharges and financial risks will be handled by your outsourcer only. However, if you relieve yourself from all the worries, you may face other concerns. For instance, in the fixed cost, the vendor may keep a risk margin along, and hence you end up paying more. Also, if the sum is stipulated initially, the developers will limit their creativity and try to fit in the budget with no improvements.

  • A contract is a must-have:

The best recipe to get financial, technical, communication, management, and all possible moments regulated, signing a contract is a must. This document will cover all necessary details of the project and will be signed by both parties.

If you cooperate with a vendor for the first time, we recommend starting with an assignment of smaller scope. If you are satisfied with the results, you can continue obtaining the benefits of software development outsourcing.

  • Correlate payment to milestones:

Don’t make the entire payment upfront. A sensible move is to make an advance payment of one-third of the final amount and then divide the remaining amount to complete milestones. In this way, they will also work towards meeting deadlines.

  • Coach the in-house staff:

When you choose outstaffing, this tip is essential. When you explain the potential benefits to your regular employees, they will accept, and the resistance of introducing new temporary employees will be reduced. It further helps to enhance the efficacy of the workflow.

Communication is essential when cooperating with remote teams. If it fails, the project may be defeated. To prevent such mishaps, you should establish effective communication channels with which both sides are comfortable.

  • Provision for a follow-up:

It is critical to integrate a support clause specifying the possible cooperation of the parties after the completion of a project. By doing so, you will not have to look for another vendor to get the required fixes done or get something corrected after the product launch.


Whether you choose Outsourcing or Outstaffing, you will use the workforce outside of your company to make the job—the main difference with who manages the team. You are required to make a thoughtful decision and weigh all the pros and cons before choosing a business model for your project. Gauge your requirements thoroughly and look for high-quality, reasonable services.

Image Credit: provided by the author; thank you!

Vikrant Bhalodia

Head – Operations

Head of Operations with 12+ years of multi-functional expertise across Sales & Marketing, Consulting, Web Content Management, Operations and HRM at WeblineIndia. Having passion towards technology and with multi-functional expertise in a Software Development Company based in USA and India, Vikrant loves sharing insights on optimizing the success and internet visibility of the customers’ businesses.


Fintech Kennek raises $12.5M seed round to digitize lending



Google eyed for $2 billion Anthropic deal after major Amazon play

London-based fintech startup Kennek has raised $12.5 million in seed funding to expand its lending operating system.

According to an Oct. 10 report, the round was led by HV Capital and included participation from Dutch Founders Fund, AlbionVC, FFVC, Plug & Play Ventures, and Syndicate One. Kennek offers software-as-a-service tools to help non-bank lenders streamline their operations using open banking, open finance, and payments.

The platform aims to automate time-consuming manual tasks and consolidate fragmented data to simplify lending. Xavier De Pauw, founder of Kennek said:

“Until kennek, lenders had to devote countless hours to menial operational tasks and deal with jumbled and hard-coded data – which makes every other part of lending a headache. As former lenders ourselves, we lived and breathed these frustrations, and built kennek to make them a thing of the past.”

The company said the latest funding round was oversubscribed and closed quickly despite the challenging fundraising environment. The new capital will be used to expand Kennek’s engineering team and strengthen its market position in the UK while exploring expansion into other European markets. Barbod Namini, Partner at lead investor HV Capital, commented on the investment:

“Kennek has developed an ambitious and genuinely unique proposition which we think can be the foundation of the entire alternative lending space. […] It is a complicated market and a solution that brings together all information and stakeholders onto a single platform is highly compelling for both lenders & the ecosystem as a whole.”

The fintech lending space has grown rapidly in recent years, but many lenders still rely on legacy systems and manual processes that limit efficiency and scalability. Kennek aims to leverage open banking and data integration to provide lenders with a more streamlined, automated lending experience.

The seed funding will allow the London-based startup to continue developing its platform and expanding its team to meet demand from non-bank lenders looking to digitize operations. Kennek’s focus on the UK and Europe also comes amid rising adoption of open banking and open finance in the regions.

Featured Image Credit: Photo from; Thank you!

Radek Zielinski

Radek Zielinski is an experienced technology and financial journalist with a passion for cybersecurity and futurology.

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Fortune 500’s race for generative AI breakthroughs



Deanna Ritchie

As excitement around generative AI grows, Fortune 500 companies, including Goldman Sachs, are carefully examining the possible applications of this technology. A recent survey of U.S. executives indicated that 60% believe generative AI will substantially impact their businesses in the long term. However, they anticipate a one to two-year timeframe before implementing their initial solutions. This optimism stems from the potential of generative AI to revolutionize various aspects of businesses, from enhancing customer experiences to optimizing internal processes. In the short term, companies will likely focus on pilot projects and experimentation, gradually integrating generative AI into their operations as they witness its positive influence on efficiency and profitability.

Goldman Sachs’ Cautious Approach to Implementing Generative AI

In a recent interview, Goldman Sachs CIO Marco Argenti revealed that the firm has not yet implemented any generative AI use cases. Instead, the company focuses on experimentation and setting high standards before adopting the technology. Argenti recognized the desire for outcomes in areas like developer and operational efficiency but emphasized ensuring precision before putting experimental AI use cases into production.

According to Argenti, striking the right balance between driving innovation and maintaining accuracy is crucial for successfully integrating generative AI within the firm. Goldman Sachs intends to continue exploring this emerging technology’s potential benefits and applications while diligently assessing risks to ensure it meets the company’s stringent quality standards.

One possible application for Goldman Sachs is in software development, where the company has observed a 20-40% productivity increase during its trials. The goal is for 1,000 developers to utilize generative AI tools by year’s end. However, Argenti emphasized that a well-defined expectation of return on investment is necessary before fully integrating generative AI into production.

To achieve this, the company plans to implement a systematic and strategic approach to adopting generative AI, ensuring that it complements and enhances the skills of its developers. Additionally, Goldman Sachs intends to evaluate the long-term impact of generative AI on their software development processes and the overall quality of the applications being developed.

Goldman Sachs’ approach to AI implementation goes beyond merely executing models. The firm has created a platform encompassing technical, legal, and compliance assessments to filter out improper content and keep track of all interactions. This comprehensive system ensures seamless integration of artificial intelligence in operations while adhering to regulatory standards and maintaining client confidentiality. Moreover, the platform continuously improves and adapts its algorithms, allowing Goldman Sachs to stay at the forefront of technology and offer its clients the most efficient and secure services.

Featured Image Credit: Photo by Google DeepMind; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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UK seizes web3 opportunity simplifying crypto regulations



Deanna Ritchie

As Web3 companies increasingly consider leaving the United States due to regulatory ambiguity, the United Kingdom must simplify its cryptocurrency regulations to attract these businesses. The conservative think tank Policy Exchange recently released a report detailing ten suggestions for improving Web3 regulation in the country. Among the recommendations are reducing liability for token holders in decentralized autonomous organizations (DAOs) and encouraging the Financial Conduct Authority (FCA) to adopt alternative Know Your Customer (KYC) methodologies, such as digital identities and blockchain analytics tools. These suggestions aim to position the UK as a hub for Web3 innovation and attract blockchain-based businesses looking for a more conducive regulatory environment.

Streamlining Cryptocurrency Regulations for Innovation

To make it easier for emerging Web3 companies to navigate existing legal frameworks and contribute to the UK’s digital economy growth, the government must streamline cryptocurrency regulations and adopt forward-looking approaches. By making the regulatory landscape clear and straightforward, the UK can create an environment that fosters innovation, growth, and competitiveness in the global fintech industry.

The Policy Exchange report also recommends not weakening self-hosted wallets or treating proof-of-stake (PoS) services as financial services. This approach aims to protect the fundamental principles of decentralization and user autonomy while strongly emphasizing security and regulatory compliance. By doing so, the UK can nurture an environment that encourages innovation and the continued growth of blockchain technology.

Despite recent strict measures by UK authorities, such as His Majesty’s Treasury and the FCA, toward the digital assets sector, the proposed changes in the Policy Exchange report strive to make the UK a more attractive location for Web3 enterprises. By adopting these suggestions, the UK can demonstrate its commitment to fostering innovation in the rapidly evolving blockchain and cryptocurrency industries while ensuring a robust and transparent regulatory environment.

The ongoing uncertainty surrounding cryptocurrency regulations in various countries has prompted Web3 companies to explore alternative jurisdictions with more precise legal frameworks. As the United States grapples with regulatory ambiguity, the United Kingdom can position itself as a hub for Web3 innovation by simplifying and streamlining its cryptocurrency regulations.

Featured Image Credit: Photo by Jonathan Borba; Pexels; Thank you!

Deanna Ritchie

Managing Editor at ReadWrite

Deanna is the Managing Editor at ReadWrite. Previously she worked as the Editor in Chief for Startup Grind and has over 20+ years of experience in content management and content development.

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