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 for them without joining developers to the staff in the company. Luckily, some options available today can help you out – outsourcing and freelancing. So, what are they and what to choose to level up your business?

In our article, you’ll know more about the difference between IT outsourcing and freelancing. Besides, we’ll 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. But 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 to choose and why it matters 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 freelancing and outsourcing in detail!

DefinitionOutsourcing is the business cooperation in which a company acts as a service rovider for a client.Freelancing is a type of working agreement by which an employer works independently to meet the demands of a client.
FunctionAn outsourcing staff can formulate and manage tasks besides completing them based on business needs.A freelancer works directly with a client to complete all the given tasks to realize the business goals.
PaymentAn outsourcing company has payment from a client for a specific function.A freelancer gets payments after finishing all the client’s orders.
ExampleImagine you want to have a well-designed app developed by professionals. After all your searches, you finally find a good software development company and are ready to cooperate closely. You discuss all terms and conditions with the outsourcing company, reach an agreement and sign all the necessary documents.Imagine you need a user-friendly web design for your site or a mobile app. What to do? You open a freelancing platform (like UpWork, GitHub, Toptal) and invite some candidates to submit bids, then review freelancers’ profiles and hire the favorites. When the order is completed and delivered, a freelancer receives a payment.
  • Firm guarantees;
  • Dedicated teams of specialists;
  • Ongoing support;
  • Quick problem solving;
  • Wise business strategies
  • Affordability;
  • Quick availability;
  • Flexibility;
  • Freedom of choice;
  • Direct communication.
  • Limited control over the work of developers;
  • Increased financial burdens
  • Irregular working hours;
  • Few guarantees of confidentiality, reliability, and quality;
  • Too much time to find the best developer on the market

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

Pros and Cons of Outsourcing

So, IT outsourcing is a widely-used option around the world – it is an external service provided by a company like Mangosoft to speed up IT-related business processes, 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 management of deals to setting win-win relationships within the staff.

You have to admit the fact that one person cannot 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? Check it out below.

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, its testing and product launch. The huge teams of specialists may work on your project if needed – 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 the detailed information of how much money is needed, how many developers are needed to be involved, 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 potential clients. So, high-quality app or web development is a win-win strategy for both businesses – yours and of 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 all the time for
  • 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 on the table below. Other than that, it’s also possible an outsourcing company will ask for additional costs like taxes and office rent.
Years of ExperienceOutsourcingFreelancing
Junior (0-2)$24 per hour$19 per hour
Middle (2-5)$36 per hour$28 per hour
Senior (5+)$73 per hour$62 per hour
  • 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 is better to rely on software experts.

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?

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. And you can select whoever specialist you need for your business with a suitable hourly rate price.
  • 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 for 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 the more skillful freelancer you’ll find, the more projects will be completed with perfect quality and in a short time.
  • Direct communication. When you have only one person on board who is responsible for the self, communication must be smooth. 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 that 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.

What to Choose – Freelancing or Outsourcing?

Outsource Vs Freelance – What’s the Difference and What to Choose? - 1

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 it isn’t possible to do with a freelancer or 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, 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, 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.

Finally, when you know all the essential details of outsourcing and freelancing, you are able to arrive at the best solution, aren’t you? If you still have any questions about IT outsourcing, we are glad to answer all of them so that you will be well-informed about our services. Contact us whenever you need qualified help!

If you still doubt which outsourced software development company – where are articles with the detailed overview – List of Top Software Development Companies in Europe  and Top IT Outsourcing Companies in Ukraine.