Have an idea for your business project to develop in the future but don’t want to hire an in-house team of developers? Well, you’re not alone. Many entrepreneurs struggle to find a cost-effective solution, but luckily, some options available today can help you – outsourcing and freelancing. So, what are they, and what do you choose to level up your business?

In our article, you’ll learn more about the difference between freelancing and outsourcing. We’ll also help you with the final choice. Read our material below!

What Is Freelancing and Outsourcing?

Freelancing and outsourcing have a similar meaning for business cooperation – providing services to a client. However, there are specific differences in both terms that cause a lot of misunderstandings among clients, especially when they’re searching for urgent help from IT experts. “What do you choose, and why does it matter to me?”

If you seek what’s more suitable for your project development in terms of time, quality, and price, the form of working cooperation is important for you. So, let’s discuss each of them in detail!

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As you’ve already noticed, the table above gives a general overview of the key differences between outsourcing and freelancing. Want to know more details about an appropriate way of hiring a developer? Let us explain the pros and cons of two cooperation models you may encounter while developing your business project.

Pros and Cons of Outsourcing

So, IT outsourcing is a widely-used option around the world – it’s an external service provided by a company like Mangosoft to speed up IT-related business processes and to come up with effective solutions for the desired business outcomes. Outsourcing services cover a lot of aspects – from developing the right business strategies and vision, hiring processes, structuring the best possible contracts, and managing deals to setting win-win relationships within the staff.

You have to admit that one person can’t handle all the tasks necessary for developing your project. And a team of software developers is a good option for you! Curious to find out more about what outsourcing will bring to your business? Look:

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Pros of Outsourcing

  • Qualified expertise. When you collaborate with an outsourcing company, you can rely on professional help in different fields, starting with a detailed analysis of your project, hiring the best developers for it, and ending with successful app development, testing, and product launch. A huge team of specialists may work on your project if needed, and all of them are qualified in each of the mentioned fields.
  • Thorough project estimation. An outsourcing partner will provide you with a full range of services including the project estimation with detailed information on how much money is needed, how many developers are needed to be involved, and how long it will be developed, tested, and deployed. So you won’t have to do it on your own.
  • Guarantees of quality. Without proper coding in both back-end or front-end development, your website or app won’t work in a way to satisfy its visitors. Without firm guarantees, app development companies won’t attract multiple clients. So, high-quality app or web development is a win-win strategy for both businesses – yours and those who run an IT outsourcing company.
  • Continued support and assistance. Top IT companies care about their clients and in addition to their custom development services, they’ll provide you with continued support and assistance needed for your project. If we compare it with a software freelancer, it’s apparent that they won’t be available to you all the time.
  • Perfect efficiency. You can choose a company or a team that specializes in a particular IT sphere. It will give you an opportunity to select the best professionals to realize your business idea. And in effect, your product might outperform competitors in the market.

Cons of Outsourcing

  • High expenses. Working with a company will cost you more than cooperating with a freelancer, and you can notice this difference in the table below. Other than that, it’s also possible an outsourcing company will ask for additional costs like taxes and office rent.
  • Limited control over developers. If you decide to hire a company, take into account that you’ll discuss all your project details only with a manager who will assign them to developers. It isn’t direct communication, and it may cause some problems. However, if you aren’t good at coding, it’s better to rely on software experts.

Want to know how to estimate a software project easily? – Read our complete guide on calculating project costs based on a project estimation sample.

Pros and Cons of Freelancing

A freelancer is a self-employed worker who offers services for a fixed price or per-hour rate and completes tasks within specific timeframes. Today, the job market for IT freelancers is booming – about 23+ million software developers all over the world prefer to work as freelancers. Go to specialized freelancing platforms like Upwork, PeoplePerHour, GitHub, Toptal, Guru, or Fiverr, and you’ll find someone available right now! You’ll see the whole list of freelance developers you can choose – there are many filters to find the best specialists eventually.

There are good grounds for working as a freelancer, but what does it bring to you as a customer?

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Pros of Freelancing

  • The broad selection of specialists. Platforms like Upwork, Fiverr, Hubstaff Talent, and Freelancer cover a wide range of IT experts, from Python to JavaScript developers. You can select whoever specialist you need for your business at a suitable hourly rate.
  • Money-saving. On freelancing platforms, there are rates that every freelancer sets for services. Even though highly-demanded freelancers charge a lot, you can keep options open and choose between available candidates. In any case, you won’t pay a lot as you don’t need to spend on taxes, office space, and other team-building activities.
  • Working flexibility. Freelancers are flexible in their work and hours, and many of them are okay to spend additional hours on finishing their work. And if they want to complete a project faster, a freelancer can work on weekends as well.
  • Fast work. Freelancers always search for honing their skills. So, it means that skillful freelancers, complete multiple projects with perfect quality and in a short time.
  • Direct communication. When you have only one person on board who is responsible for the self, there shouldn’t be communication issues. With a freelancer, it’s easier to establish a scope of work requirements, and there is no need to track their deadlines. But if you have questions about process development, it’s better to discuss it with an outsourcing company rather than with the freelancer.

Cons of Freelancing

  • Irregular working hours. You shouldn’t expect that a freelancer might reply to your questions when you need them immediately. Due to a working overload, freelancers can have several projects at the same time, and that’s the main reason for their unavailability for you. If you work with an outsourcing company, there aren’t any problems in contacting a team when you want, as most of these businesses can adjust to your time zone.
  • No formality. It means a freelancer can disappear from your view without any notification, and you don’t have the power to control them.
  • No confidential agreement. For an IT business, confidentiality matters because you strive to develop a top-notch product that may outbeat your competitors. But if you work with a freelancer, it’s complicated to follow it. You can’t be sure that the freelancer may cooperate with your rival.

Crucial Variances Between Freelancing and Outsourcing

Outsourcing and freelancing possess some distinctive features. Mostly, they’re observed in the work and cost structure. All these factors matter when a client makes a decision over budget, project size, and complexity. 

Freelancing vs Outsourcing: Variances in Work Structure

Freelancing presupposes hiring independent contractors on a project-by-project basis, which allows flexibility and remote work. In contrast, outsourcing involves hiring third-party services that are expected to be on-site or off-site. Unlike freelancers, outsourcing partners offer cooperation with their project managers that ensures timely delivery and high-quality work. 

Freelancing vs Outsourcing: Variances in Cost Implications

When it comes to cost, hiring a freelancer can be less expensive. Yet, this advantage is only beneficial for those ready to sacrifice time for their management and oversight. Outsourcing is usually more pricey, though it’s more cost-effective for larger projects or ongoing partnerships. 

What to Choose – Freelancing or Outsourcing?

It’s up to you who you want to cooperate with – a freelancer or an outsourcing company, but you should keep in mind such factors that might affect your final decision:

  • Management experience;
  • Team size;
  • Level of responsibility and control;
  • Project duration and its complexity.

If your project doesn’t involve complicated tasks or huge teams of specialists, freelancing is a suitable model for you. You get your job of satisfactory quality done fast and at a relatively cheap price (or the price you’re ready to pay). You set all the requirements in a job description, post a job vacancy, shortlist all potential candidates, choose among them, and start working on your idea together. So, don’t neglect your own experience in management – not all freelancers are good managers. You should control each step and be aware of progress. If you don’t want to manage the development process, you are welcome to another service – IT outsourcing.

With outsourcing, you can trust tasks of any difficulty to an outsourcing company without worrying about the final results – all the terms and conditions are documented in contracts. As a result, you have more guarantees than you would have while working with a freelancer. So, outsourcing services are perfect for complicated orders and not only! A top outsourcing company is ready to analyze your business area, present the most effective digital solutions for it, as well as develop, test, and deploy them into production.

If you don’t need only a Java developer, web designer, or someone else from an IT sphere, you should consider an outsourcing model as well. You’ll be provided with all the necessary staff members – from analysts to QA specialists. You’ll cooperate with many professionals who can contribute to your business process. On freelancing platforms, you’ll have to find all these experts separately. As a result, freelance may be a little bit time-consuming for you – some free time is needed to find and interview the best analysts, managers, engineers, etc. In an outsourcing company, there is an IT recruiter who is responsible for human resources for your project.

The Future Outlook for Freelancing and Outsourcing

The future of freelancing and outsourcing seems to be highly promising. Want to know what to expect in remote work soon? Check out the main trends below.

Emerging Trends in Freelancing

The rise of freelancing will continue, though freelancers have to be able to meet the market demands. In particular, the growing importance of sustainable development will remain a stable trend in the freelance economy. Also, the ability of freelancers to comply with the ethical principles of the company and adaptability to various projects will play a prominent role as well. 

Despite the positive forecasts for freelancing, remote workers have to be aware of threats. In particular, stiff competition and inconsistent income may become an uphill battle for freelancers. 

Upcoming Trends in Outsourcing

As there is an increase in the freelance workforce, outsourcing won’t have much difficulty in finding the right talents. Apart from that, new tools and platforms are promised to make the collaboration between freelancers and outsourcing teams more effective and easier. Yet, mind that automation will continue playing a pivotal role, and so, can cut the demands for some outsourced services. 

Can Freelancing and Outsourcing Exist Together?

Wonder if outsourcing and freelancing can coexist? Well, the answer is: Absolutely! Two cooperation models can indeed exist together and benefit both freelancers and businesses. For example, companies can outsource some tasks to freelancers who have corresponding skills or experience. Some other tasks, indeed, can be outsourced to external companies. This approach allows businesses to utilize talents without the need to hire full-time employees and, at the same time, take full control of all aspects of the projects. 

Is Outsourcing Always the Superior Choice Over Freelancing?

Before choosing outsourcing or freelancing, it’s better to weigh the pros and cons first. Plus, don’t forget to consider accountability! Outsourcing might be a perfect choice if you want to alleviate typical concerns about quality, delivery time, communication, and even security. When you opt for an outsourcing partner, you can rest assured that contractors will accept full accountability for the ending product. 

Even though there are many responsible and highly skilled freelancers, this cooperation model has a high risk of late delivery time and even ghosting. 

Mangosoft’s Expertise in Outsourcing

Relying on an outsourcing company, you acquire a chance to let experts do all the work. Another perk is that you can have more time to focus on the core of your business. Mangosoft is an outsourcing company having over 12 years of experience in providing innovative IT solutions. Our team of 120+ experts has successfully completed more than 25 projects for clients across 30 countries. The company’s work on the project implementation is based solely on the best practices and expertise. Reach out to turn your vision into a viable product with a reliable partner! 

Conclusion

In the end, outsourcing and freelancing have both advantages and disadvantages. The choice of a cooperation model should be based primarily on your budget, project complexity, and the size of the team you are ready to hire. If quality, delivery, communication, and security are your top priorities, choose an outsourcing company. Yet, freelancing can be a good choice for those who have a tight budget and more free time for management and oversight. 

Finally, when you know all the essential details of outsourcing and freelancing, you can arrive at the best solution. If you still have any questions about IT outsourcing, we’re glad to answer all of them so that you will be well-informed about our services. Contact us whenever you need qualified help!

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