Staff Augmentation or Project Outsourcing, Which is Better for you?

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ALEX MELNICHUK

Published: 17 Mar 2021

Building Virtual Teams

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In today’s globalized economy, it has become normal for companies to outsource jobs to other places where the quality of the work is the same but the costs are lower. The main point that needs to be established is which of these two options is actually good for your company. Both come with pros and cons, the goal now is to determine which would produce the best results for a given case.

What is IT Staff Augmentation?

It's the process by which you are attempting to improve the overall quality of your workforce through the addition of skilled developers or effectively increasing the quality of your tech staff. The main thing about this particular approach is that you retain control over the entire development process. The developers will be working by following your lead and your roadmap exactly as it is laid out, as they will be reporting directly to you or a representative that you select from your company. Ultimately this allows for a more homogenous teamwork environment. 

What is Project Outsourcing?

Moving on from there, we have project outsourcing, which is an arrangement where you are basically entrusting jobs to other firms or freelancers that are outside of your direct sphere of influence. These can be developers, coders, or freelancers that work from home. They can also be entire agencies overseas that specialize in offering such services to larger tech firms.

READ ALSO: An In-House vs. Remote Software Development Team: Which one is Best for You?

Pros and Cons of Staff Augmentation

Pros and Cons of Staff Augmentation

As with anything, there are pros and cons to this solution. Among the clearest of them are the following:

Pros

  • Complete control – Working with staff augmentation companies, you are closer to an employer than you are to a client. This means that you are the one who is in complete control of pretty much every facet of a project and the developers simply take their cues from you. You can delegate but you can still oversee the teams to make sure that everything is being done as needed.
  • Smoother integration – Adding developers on the spot who already have the necessary skills and experience will make it much easier to integrate them into the company’s existing system. Processes are easier to adopt and changes are easier to make.
  • Easier Filling of Specialist and Expertise Gaps – One of the biggest advantages of this solution is how many development specialists and experts in any given field you can find to fill the roles that lack personnel. If there are developers with particular skills that you need to obtain, you can easily do so from staff augmentation companies and the like, thus plugging any weak points in any team.
  • More Flexibility – It can be quite easy to change things up in any division because you can easily add or subtract developers as needed. This is particularly useful in the IT industry that's constantly in flux.
  • Cost Reduction – It’s simply a fact that staff augmentation is cheaper than hiring full-time developers with all of the requisite overhead such as taxes, administration, health benefits, and more thus reducing overhead costs.
  • Faster Progression – A large team does not necessarily mean you can finish a project faster but it can if you fill the necessary roles with the right people.
  • Workload Reduction – There is less work for everyone to do if there are more people on the team fulfilling their roles, which benefits all workers across the board.
  • More Workplace Harmony - Employees feel less threatened by external developers, which allows them to accept the new additions with fewer issues. This could then promote a smoother, more harmonious workflow that does not add to the competition that is common in office workplaces. It can even help make the proposal system less contentious.

Cons

  • Training Requirement – Regardless of how skilled the developers you get are, they will still need effective onboarding. Depending on how complicated the company’s internal systems are, the required onboarding program might be extensive.
  • Vulnerability to Internal Flaws – No company is perfect and these imperfections can translate to issues in the contractors’ outputs. Thus, it’s a good idea to fine-tune your processes before you add developers via staff augmentation companies.
  • Management Responsibility – With more developers naturally comes more responsibility on the team leaders, supervisors, and other executives since contractors are not often entrusted with such responsibilities.
  • Burden of Success Rests on Company – No matter how skilled the developers might be, if the company’s processes and internal systems are flawed, a good output is never guaranteed.
  • Employee/Contractor Division – Sometimes, there’s a division between contractors and employees in the arrangement. Although many companies treat contractors as part of their own team, a lot of effort goes into building trust and connection between units, especially in a remote environment. 

Pros and Cons of Project Outsourcing

Pros and Cons of Project Outsourcing

As with IT staff augmentation services, project outsourcing comes with its own share of benefits and issues. For the most common pros and cons in this arrangement, check out the following:

Pros

  • Less Onboarding Requirement – When you outsource your project to another firm, you typically get a skilled team who already knows what they are doing and report to a project manager thus they require less onboarding.
  • Ease of Scaling – Multiple projects can be assigned to multiple teams for a lower cost, thus making the scaling prospects much better.
  • Fewer Management Responsibilities – Project outsourcing typically involves outside teams with their own supervisors and project managers, which eases the burden of responsibility of company executives.
  • Quality Output Only – The main conditions for outsourcing assignments will always hinge on the quality of output and if this is diminished, the contract can always be terminated.
  • Fewer Legal Liabilities – Project outsourcing involves fewer legal responsibilities to the developers, with the option of also having limited liabilities with clients.
  • Filling Departmental Gaps – Companies lacking specific departments like tech support or IT workers can fill those by outsourcing to an outside development firm.
  • Flexibility of Cost – Since costs often depend on the projects, it is always possible to change the firms you will outsource to, for cheaper development labor. Expense variability is high.

Cons

  • Limited Control – Unfortunately, project outsourcing affords very limited control on a practical basis due to the remote nature of the arrangement.
  • Restless Workforce – Company employees are typically not very fond of the idea of working with people they don’t know and have no interaction with.
  • Quality and Reliability – It can be difficult to be sure about the quality of the output when you have no control over the development process.
  • Size Reliance – Outsourcing smaller projects to trusted providers can be problematic, given that prominent outsourcing companies aren’t always willing to take something up unless it brings in money for years.  
  • Poor Integration – Integrating third-party teams with company systems, practices and processes can be quite challenging.

READ ALSO: How Should you Hire Remote Developers in 2021?

IT Staff Augmentation Vs Project Outsourcing

So, with the pros and cons of both IT staff augmentation and project outsourcing all laid out, the question now is which one to choose. This really comes down to the needs of the company or the project. This solution is suitable for cases where there is a need to:

  • Maintain team control
  • Focus on long term consistency
  • Scale quickly 
  • Fill specific development skill gaps
  • Maintain a harmonious workplace
  • Increase the speed of output
  • Keep the quality of results high

As for project outsourcing, this path is more suitable for companies that:

  • Are lacking in certain departments
  • Have a one time or short term need (non-continuous development)
  • Have limited time and would rather avoid additional managerial duties
  • Would prefer to limit responsibilities

Suffice it to say, you can reasonably make your choices of whether you go with outsourcing company or staff augmentation by taking these conditions into consideration. As long as you know exactly what your company or business needs, it should not pose too much of an issue when you are shopping around for options.

Wrap up

At the end of the day, it all comes down to what works best for you, the client. Both models have their benefits and shortcomings, but as there is no one size fits all solution, the decision must ultimately be made based on your needs. Any vendor whether they work with Outsourcing or Staff augmentation should be ready to listen and offer services that fit your specific development needs. 

Providing IT staff augmentation services, we may admittedly be a bit biased here, but we believe that great software is born in collaboration between the client and the development team. Working with a team you've hired yourself puts you in the driver's seat in terms of product development, communication, and team management. It makes the process predictable and transparent, so that the client always knows what they will receive and when. This is not to say that outsourcing won't be a fit but when it's all said and done, now that you have all of the information, that’s a decision you'll have to make on your own.

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