Staff augmentation vs. project outsourcing in IT – Which one is right for you?

CornerRight 9 min


Icons/Position/Pos. No. 4

Strategy


Icons/Technology/Tech No.1

AI

If your business needs software services, you probably know that the IT human resources topic can be a nightmare. With the current market shortage, hiring the right in-house developers is nearly a mission impossible. There are many reasons not to take this journey, such as cost-effectiveness, close deadlines, or the long-term vision of your IT team. Or, well, your mental health.

That’s where outsourcing comes in, with a range of models. The most popular ones are staff augmentation and project outsourcing. But how do they work and which one will be better for you?

This is exactly what we dive into today. Keep reading to see how these two models compare: we’ll show you their key pros and cons, the most important differences between them, and pointers on which model to use to achieve your desired result.

Table of contents

What is IT staff augmentation?

  1. Benefits of staff augmentation
  2. Key challenges to prepare for

What is project outsourcing in IT?

  1. Benefits of project outsourcing
  2. Key challenges to prepare for

Staff augmentation vs. project outsourcing – ultimate comparison

  1. Hiring and infrastructure costs
  2. Project management duties
  3. Working and organizational culture
  4. Insight and knowledge
  5. A quick-glance summary

When to pick staff augmentation?

When is project outsourcing a better option?

Don’t worry; we’re here to help you choose

What is IT staff augmentation?

Staff augmentation means adding skilled developers and other specialists to your team. The goal here is to increase the overall quality of your workforce and output. 

The main differentiator of staff augmentation is that you keep full control over the process of building software. External specialists work under your supervision and develop the solution in line with your roadmap. They report directly to you or one of your project managers. 

The high degree of control is why so many companies choose staff augmentation over other models. On top of that, getting augmented staff also allows building a more homogenous work environment. It makes collaboration between team members much smoother.

Benefits of staff augmentation

Cost-effectiveness – Using staff augmentation services is more cost-effective than hiring full-time developers. That’s mainly because you can avoid paying overhead expenses such as health insurance, perks and benefits, administration, workspace costs, and many more. 

Full control over the resources – When collaborating with a staff augmentation company, you will become an employer rather than a client. You’ll have full control over every aspect of your software development project, including the developers you hire to be part of it. You will delegate tasks to them and oversee how they’re handled to make sure that everything is done exactly as you want. 

Smooth integration with your development team – In this model, you make external developers with the right skills and experience an integral part of your team. By integrating them into your existing processes, you ensure that any change requirements will be easier to handle later on. The specialists will blend into your team seamlessly and take their cues from you, just like every other employee. 

More flexibility – Augmented staff is a highly flexible solution. You can add new developers whenever the need arises and reduce the size of your staff augmentation contract whenever a project phase is over. This is particularly valuable in the tech industry, where requirements are constantly changing. 

Better workplace – By hiring extra talent, you make sure that your internal team is never caught doing overtime. This will benefit all workers across the board. Staff augmentation is a service that makes your current employees feel less stressed and build a harmonious workflow with external workers.

Key challenges to prepare for

  • Skills and training development – It doesn’t matter how skilled developers you hire ; they will still need to be onboarded effectively. Depending on how complicated your company’s internal systems are, the onboarding program might become expensive and time-consuming. 
  • Inefficient processes – Adding new developers to poorly designed processes will impact their output. Assess your processes before adding external developers via staff augmentation. 
  • Full management responsibility – With more developers comes more responsibility. This applies to more than one person in your company since staff augmentation impacts the work of multiple supervisors, project managers, development team leaders, and other executives.

What is project outsourcing in IT?

Project outsourcing is when a business hires another company to complete a project. Organizations that need a hand in developing projects can use managed services specializing in particular technologies or areas (like the Internet of Things or blockchain). 

Benefits of project outsourcing

  • Smaller onboarding effort – When outsourcing an entire project to another company, you get a skilled team of experts. They know what they’re doing and report to a project manager on the vendor’s side. That’s why the time and effort spent onboarding is much smaller. These teams are usually ready to work at 100% efficiency in a few weeks or less. 
  • Scaling and flexibility – You can assign multiple software development projects to multiple teams to reduce costs and increase your scaling opportunities. 
  • Fewer management responsibilities – Since in project outsourcing you hire an external team with its own project managers or supervisors, you’re no longer responsible for leading the project to success. 
  • Opportunity to fill a departmental gap – If you lack specific departments like tech support or DevOps, you can easily fill them by outsourcing their tasks to an external team. This is a fantastic opportunity to save money on the recruitment process. 

Key challenges to prepare for

  • Limited control over the project – When outsourcing a project, prepare to have less control over it on a day-to-day basis given the remote character of your arrangement. 
  • Reliability and quality of the vendor – Project outsourcing means engaging an external company, so you won’t have any idea about the quality of the output until it’s done. You also have no control over the development process, which might be risky to some companies. 
  • Integration challenges – Sometimes outsourcing companies might be using specific third-party systems that need to be integrated with your internal systems, processes, and practices. The scope of this integration might be challenging. 
  • Size considerations – If you’re looking to outsource a small project, finding a trusted provider might be challenging. Such companies are usually after larger projects that will bring them money for years. So, they might not be available for a smaller project.

Staff augmentation vs. project outsourcing – ultimate comparison

1. Hiring and infrastructure costs

When outsourcing an entire project to an external company, you no longer have to worry about recruiting developers or covering overhead and infrastructure costs. All of that is fulfilled by your provider. 

In staff augmentation, you also get to avoid the effort and cost of sourcing, attracting, and recruiting specialists. However, you might have to bear the onboarding cost – which is something you can avoid in project outsourcing. Still, staff augmentation also helps to optimize the overhead costs related to the working environment. 

2. Project management duties

These two models of collaboration couldn’t be more different in this regard. In project outsourcing, you don’t need to manage specialists directly. The vendor takes this burden off your plate. But at the same time, you lose control over the project. You can’t ensure the quality of its output because the team realizes the project as it sees fit. 

In the staff augmentation model, on the other hand, you’re the one responsible for managing developers. This gives you more control but also involves more time and effort. 

3. Working and organizational culture

Staff augmentation allows introducing extra talent to your company in a smoother way. These developers will be working alongside your internal resources and undergo the same onboarding process. 

In project outsourcing, your in-house team will come into contact with hired developers or outputs developed by the augmented staff. But these people might be located on the other side of the planet. That’s why you need to build awareness and company culture that eases outsourced services into your organization.

4. Insight and knowledge

When hiring new developers via staff augmentation, you get specialists who aren’t only experienced and have the right skills. These people have also worked on similar projects for other companies. They bring in a wealth of insight into your organization, offering an opportunity to refresh your domain knowledge and learn some new best practices. 

When you outsource a project, all of that insight and knowledge are captured in the output. Unless you involve the vendor in a consulting service, they remain largely inaccessible to your teams. 

5. A quick-glance summary

Take a look at this table to compare what makes staff augmentation and project outsourcing different.

REQUIREMENT

STAFF AUGMENTATION

PROJECT OUTSOURCING

Quick integration with internal processes

 

Keeping tight control

 

Filling skill gaps within existing team

 

Leveraging existing team’s productivity

 

Speeding up an active project’s completion

 

Staying focused on the result and core business

 

Handing over the responsibility for results to another company

 

Having project management off your shoulders

 

Achieving breathrough productivity and efficiency increase

 

No need to have internal IT staff

 

When to pick staff augmentation?

Staff augmentation is an excellent solution if your priority is maintaining team control and focusing on long-term consistency. 

Hiring augmented staff is also a great choice for filling particular development skill gaps, increasing the speed of your output, and keeping the quality of your results high. 

This solution allows you to scale quickly and create a harmonious working environment. 

When is project outsourcing a better option? 

Go for project outsourcing if you lack a specific department like IT support or expertise – for example, a mobile development team. Another good use case for project outsourcing is when you have limited time, and you would prefer to avoid getting extra managerial duties because your plate is already full. 

Also, project outsourcing is a great choice for smaller projects, especially ones that address a short-term need and don’t require continuous development. 

As long as you know your business requirements, you’re ready to shop around for options and pick the best solution for your company. 

Don’t worry; we’re here to help you choose

When a client approaches us, at first we examine their vision and analyze which skills they need to make them happen. We do this consulting service with the aim of recommending the right solution since we deliver both staff augmentation and project outsourcing services. And we want you to succeed.

If you’re looking for an experienced partner for either staff augmentation or project outsourcing services, get in touch with us at [email protected] 

We help companies build solutions from scratch and get extra talents to drive their business growth with top-notch software.

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