Staff augmentation and outsourcing are two relevant delivery strategies that companies choose when looking outside of their walls for help on IT projects.
Doesn’t matter if it is a small scale organization or a large organization, what they all have in common is striving to create a high-quality output while delivering it on time. With a growing number of IT projects, the drive to reduce costs and improve development efficiency is constantly intensifying. Regardless of their size, businesses can sometimes struggle to fully complete projects on time, within a budget.
Only relying on in-house development sometimes might not be the best possible option. Tackling the development of these projects can be a risky and costly move. Not catching up with relevant IT innovation can lead to a disastrous outcome. Especially when knowing that only a few businesses have static IT needs. These innovations are constantly evolving, even companies that are in close need of IT can find themselves relying on the outdated legacy systems. It can take as little as one technical failure to cripple their business.
Choosing between project outsourcing and staff augmentation can be tricky. To be able to make a choice, companies first need to understand the core differences between outsourcing and staff augmentation.
What is Outsourcing?
Outsourcing is the process of hiring a whole new team of workers to execute the project. This already well-played team of workers is most usually provided by another firm. This firm manages its own resources to complete projects. Sometimes companies outsource only specific parts of the project, which is called “out-tasking”. There are different pros and cons which impact a company's decision on whether to choose project outsourcing over staff augmentation.
Most notably, when hiring a complete outsourcing team, there is often no need to invest money or time into training. Besides skill development, outsourcers are responsible for investing in the maintenance and improvement of the best practices. Something that can also save a lot of time when opting to outsource is avoiding the complex legal issues of a employee vs. contractor situation.
Ramping up and down with outsourcing projects is relatively easy. This is because further management of the projects is something outsourcers deal with. It is their responsibility to work on delivering results. This means that the core company can focus on its business, and not get overloaded with managing. Additionally, while outsourcing, any project failures and legal risks that arise are the outsourcer's responsibility.
When it comes to cons, there is always a lack of control of outsourcers' processes and resources. This might mean that integration with the core companies’ unique internal processes could be more difficult. What also may raise a concern is that some employees within a company may feel threatened by the outsourcing team.
What is Staff Augmentation?
In comparison to outsourcing, staff augmentation is all about adding new staff into the team. Not hiring a whole new team. These resources are employed by the staff augmentation firm. There is no need for shouldering the cost of additional full-time employees in order to have an additional set of skills during the project’s development. Also, there is no infrastructure cost.
It is much easier to closely manage resources when it comes to staff augmentation. Most of the time, it is also easier to integrate staff augmentation resources within company processes than to align those processes with an outsourced team.
When the development team lacks certain specialized skills, staff augmentation comes in handy. This way, companies can easily take advantage of both external and internal resources during development. What about companies with rapidly changing staffing needs? It is relatively easy to add or subtract staff through staff augmentation to meet those needs.
Also, staff augmentation avoids the cost of additional skill development and avoids the burden of the direct employing process. It is also important to note that existing employees find the staff augmentation model less threatening than the outsourcing model. They embrace a few individuals better than a whole other outsourced team.
On the cons side, there might be some additional training costs needed in order to have resources catch up with the company's processes and general knowledge. Also, additional resources will overload management because of the increased need for supervision. This also means that the responsibility of the results stays within the company using the staff augmentation model.
The one size fits all approach suits almost no company in the game. Some companies might benefit more from staff augmentation than from project outsourcing. Sometimes even they need to overlap in order to reach the company's and project’s full potential. Finding the right delivery model can be difficult. Some companies might find it easier to internally make a decision, while others seek a piece of professional advice from an IT consulting firm.