Staff Augmentation vs. IT Project Outsourcing: Which is Right?
Sometimes, companies need extra skills to fill in gaps or finish a big project. There are different ways for companies to fill talent gaps and keep the rest of their staff from having to do work they are not qualified to do. This article looks at staff augmentation and IT project outsourcing, two of the most common. In the IT field, both forms are becoming more and more popular. Which one is the right one?
People often mix up the two, even though they are very different. Here’s a look at both models—staff augmentation vs. IT project outsourcing—their pros and cons and the main things that make them different.
After knowing the pros and cons of each model, you should be able to decide which one is best for your company.
IT Staff Augmentation
Staff Augmentation is when a company hires temporary workers to fill specific skill gaps. Even though they are only temporary, these workers are still the company’s employees.
This makes staff augmentation different from IT projects outsourcing as well as other third-party staffing options. Contractors, freelancers, and consultants never become part of the company’s official staff.
With IT projects outsourcing, the company gives outside parties tasks. For staff augmentation, the company hires temporary workers to do specific jobs.
On the other hand, staff augmentation vendors give you people who can directly handle parts of your project. The biggest difference is in how the project is managed. An outsourcing vendor sets milestones and runs the whole project alone, while a staff augmentation vendor gives you some developers and lets your technical leader run them.
They sometimes give a whole team of talents as well. But the differences in staff augmentation vs project outsourcing often remain clear
Pros of IT Staff Augmentation
- Staff augmentation provides organizations and corporations with great flexibility when it comes to scaling up or scaling down their teams – without the headache of recruiting, hiring, and dealing with the expenses that come with full-time employees (administrative duties are handled by IT staff augmentation vendors).
- Supplemental employees work directly with your in-house team, allowing managers direct control over how temporary personnel integrate and cooperate with your workforce. An extra benefit is that your full-time employees will not have to worry about job security or being threatened by additional expertise from technical staffing services because these new team members will only be working on a project for a limited period.
- Compared to working with an outsourcing vendor’s team, which often comes with deep-seated cultural and technological differences that can be difficult to align with your company’s goals, the staff augmentation model makes it much easier to find and integrate external engineers into an internal team.
- You can quickly fill in-house skill gaps with outside personnel through staff augmentation. And, if used appropriately, the augmentation model can save you money by lowering general overhead costs and the associated costs of employing and training new staff (as previously described).
Cons of IT Staff Augmentation
- You must guarantee that your management team is prepared to deal with increased staff members by repurposing organizational resources as needed or even office space (if you choose the onsite model).
- Your IT staffing firm will provide you with the most qualified individuals it can locate. However, you may still need to commit some money to train and teach them about how your firm functions. Supplemented personnel, like a worldwide franchise entering a new market for the first time, may require some time to acclimatize to and integrate with your team. This can occasionally slow down productivity initially while your enhanced personnel learns your internal business processes and protocols.
IT Project Outsourcing
IT project outsourcing differs from staff augmentation in several crucial areas, each with its own advantages and disadvantages. The primary distinction between project outsourcing and staff augmentation is that with staff augmentation, you purchase engineering resources while maintaining direct control over your team (along with the risks of a potentially harmful outcome), whereas, with outsourcing, you pay for a specific, predetermined product and share the burden of risk with the outsourcing vendor, while giving up direct control over certain aspects of your business operations.
An IT outsourcing firm will hire, train, and manage a team of experienced individuals to accomplish your assigned development tasks. This external team will work independently of your company and will not be involved in the remainder of your internal development efforts or any other in-house programming work.
Pros of Project Outsourcing
- One of the most apparent advantages of project outsourcing is cost reduction. According to a Statistics Brain survey, 44% of American organizations asked chose the project outsourcing approach primarily to cut costs. Once the contracts are signed, the vendor bears the burden of establishing, training, and maintaining a remote team, as well as delivering the final product with a respectable vendor, presumably assuring the quality of that final product.
- Access to individuals with unique, sought-after technical abilities is another significant benefit of project outsourcing, especially when those specialist candidates are unavailable locally. Another CIO Magazine study found that “recruiting and hiring data science and analytics professionals is far and away CIOs top priority when it comes to talent,” with “42% of respondents” echoing this staffing concern.
- Managers can free up the time of in-house personnel by delegating some development tasks to outsourced teams when they choose the project outsourcing engagement model. Managers get more flexibility in how they may use their onsite staff by outsourcing some of the coding work to an external team, who can now be redeployed to work on mission-critical projects or projects that fall under a company’s specific area expertise.
Cons of Project Outsourcing
- When working with an outsourcing vendor and the offsite team your vendor has assembled, your company will relinquish direct management authority. This can lead to irritation with communication protocols (sometimes exacerbated by time zone differences), as well as linguistic and cultural difficulties when communicating your growth goals with personnel and management abroad.
- Because this strategy foregoes direct oversight, you may encounter some quality difficulties with the final output, which can impact productivity and overall team morale as employees, managers, and outsourcing providers try to figure out who is to blame. Coding errors that fall short of your company’s high development standards, unreported technical debt, or other technical issues caused by an outsourced development team can be time-consuming and difficult to rectify.
A Table Comparing Staff Augmentation and Outsourcing
|Staff Augmentation||IT project outsourcing|
|Cost and Obligations||The company pays for the cost of hiring and training the extra staff and gives them all the tools and resources they need.||All costs related to the hired workers are taken care of by the outsourcing company. The vendor also uses its resources and equipment to complete the project.|
|Purpose||To fill in specific gaps or put together a temporary team. Suitable for long-term, short-term, and unplanned projects||To do engineering work that a company doesn’t want to hire engineers for fits both short-term and long-term goals.|
|Work Structure and Management||It takes work from management, but it makes the team work better and makes hiring easier.||Even though management is independent, the outside team doesn’t fit in well with the rest of the company’s staff.|
|Knowledge||The client checks the knowledge of the extra workers on their own, and they work directly with other staff.||The dedicated outsourcing team knows the outside market and the company’s industry in a way no one else does. A client can’t see how good the resources are.|
|Onboarding||Onboarding happens rapidly since the client gets quick and on-demand access to needed resources and skills.||Projects can’t start until they’ve been well-researched, the deliverables have been made clear, and milestones have been set up. Before the project can move forward, both parties must reach a legal agreement.|
While this article focuses on the differences between staff augmentation and project outsourcing, managed services is another “outsourcing” model to be aware of, mainly because the managed services market is expected to reach $282.0 billion by 2023. Managed services and project outsourcing have certain similarities, which can cause misunderstandings because experts don’t always agree on an accurate definition of this phrase. In essence, managed service providers provide continuous remote IT solutions, whereas project outsourcing often engages on a project-by-project basis.
A typical use of a managed service would be to hire a managed services provider (complete with its staff and IT infrastructure) to support your company’s day-to-day operational needs, such as software updates, repairs, or managing the platform-as-a-service (PaaS) or software-as-a-service (SaaS) that keeps your offices running smoothly. A managed services provider would be contracted on an ongoing subscription basis, and you would generally pay a set monthly cost. This methodology may allow your staff to devote more time to essential mission-critical activities rather than wasting time on internal IT service difficulties.
Which One Should You Pick for Your Project?
As we’ve already discussed, both staff augmentation and project outsourcing have pros and cons. In the end, the model you choose will depend on your company’s needs at a certain time.
Staff augmentation is useful when there aren’t enough local resources to meet urgent needs or when a talent gap needs to be filled quickly but wasn’t expected. It is a flexible way to increase/decrease the size of a team depending on what the company needs at the time.
On the other hand, if you need a team to work on a full project, you should outsource the software project instead of adding staff. Instead of dealing with the hassle of managing a software development team, you could sign a contract with a reputable agency to get the job done.
When you don’t have enough people or money to handle a project on your own, outsourcing can help. IT equipment can be costly, but when you hire an outsourcing company, you can use the best tools without buying them.
When you don’t have enough people with certain skills, you can use this simple guide to decide between staff augmentation and IT outsourcing:
- Does the project fit into the core business of the company?
- Is there already a team for the project? If so, do only a few specialists need to be added?
- Would you like to stay in charge of most of the project and team?
If you said “yes” to any of the above questions, staff augmentation is probably the best option for that project. If not, you might want to think about outsourcing.
How to Find the Right Contractor for Staff Augmentation vs. Outsourcing Software Projects
Whether you choose staff augmentation or project outsourcing, the most challenging part of learning to hire software developers from another country is finding the right contractor.
This is more of a problem with IT project outsourcing than staff augmentation, primarily when potential clients focus on the vendor’s overall qualities rather than the qualities of each member of the team.
So, this section is mainly about outsourcing models, but the factors can also be used to judge individual vendors.
The best contractor (temporary staff or a permanent team) is not always the one with the most skills. Instead, they have to have the right mix of:
- Industry knowledge
Whether you use staff augmentation or software outsourcing, you can’t change these things. What should you keep an eye out for when picking one? This section talks about that.
To find the right contractor, there are two steps:
- Pre-search stage, where you lay the groundwork for making decisions in the future.
- Search stage, where you have different factors to consider in determining if a contractor is right for you or not.
Pre-Search Stage: Clarify your Needs, Goals, and Objectives
This step tells the rest of the project where to go. Clarity is important not only for setting the budget but also because it makes it easy to make decisions.
As was said above, projects with a few skills gaps and with a managing team should be fixed with staff augmentation. When a project needs a whole group and/or more resources, it’s often best to outsource the software project.
So, carefully answer questions about the project, what it’s for, what skills are needed, etc. The answers to these questions will help you find the right contractors (temporary staff or dedicated team).
Search Stage: Research and Evaluate Contractors
This is the point that many businesses don’t get. You probably already know that price isn’t the only (or even the main) reason to hire a contractor.
Whether you use staff augmentation or software outsourcing, the focus should be on quality, and if you can get quality for less money, that’s great. Countries like Ukraine, Poland, China, Vietnam, etc., have become outsourcing powerhouses because they have a lot of skilled workers who can be hired for less money than in the West. And offshore software development in Vietnam is the best choice for people who want to find the best balance between price and quality.
Whether you use staff augmentation or IT outsourcing to find the right people, you should think about the following things:
- Past projects: It’s very important to have a portfolio of past projects. As you look at the quality of their work, you should also look at the projects they’ve done to ensure they’re related to your field or industry. If the vendor knows a lot about how your industry works, it is easier for them to adapt.
- Reviews and Past Clients: honest reviews from previous clients of the contractor often tell more than a portfolio would. Besides expertise, evaluate the contractor’s relationship with the clients and the team members’ work ethic. This part aims to answer the question: will you enjoy working with this vendor?
- Team members: staff augmentation gives you access to a team of experts. You want to make sure of the skill level of the members of the group. How many of them are junior, mid-level, or senior? Does the mix of workers have enough variation (developers, designers, engineers, analysts, etc.)?
Finding the right talent is crucial to every company, and it always helps to have a direction before setting out. It’s hard to say between staff augmentation vs. IT project outsourcing if one is supreme.
What matters is that the model you choose fits your company’s needs at the time and that the talents you hire are the right ones for the job. You can make either staff augmentation or IT project outsourcing work for you.
At Bestarion, we have the best of talents, raring to contribute their innovation, expertise, and experience to deliver the best results in IT projects. Bestarion is an IT Staff Augmentation agency that supplies partners/clients with solid IT teams comprising carefully picked professionals. The IT industry is highly competitive, but we help you stay ahead of the game.