Staff Augmentation in Comparison to Outsourcing

The IT environment around us is dynamically changing. While there is a growing demand for expert IT management and services, the lack of digital literacy in the workforce is a reality that employers and businesses have to face.

IT outsourcing can come to the rescue of organizations here, as they benefit from a skilled IT partner that optimizes efficiency and cuts down on the time it takes to perform routine operations. When it comes to getting support from an IT partner, organizations can go for different models of cooperation. The two most popular models include staff augmentation and outsourcing a dedicated team for your business.

In this article, we run a comparison between both methods of cooperation – outsourcing and staff augmentation. Let us first start by looking at brief descriptions of both and what they mean.

What Is Staff Augmentation?

Staff augmentation is a method of outsourcing by which engineers from other software companies can be hired on an external basis. Staff augmentation is usually done on a time and materials basis, and comprises of third-party analysts and experts working with a software company during the course of a project or a definite period.

Due to the ease that staff augmentation provides, software development companies can reduce the costs related to payroll services, recruitment and project initiation within internal ranks. Since this contract can be terminated without much hassle, the model is also considered scalable and sustainable. In fact, by minimizing core HR processes and other administrative tasks, organizations and the contracted help are able to fully focus on their core responsibilities.

What Is Outsourcing?

Outsourcing requires working with a dedicated team of experts or professionals from a remote software house. When outsourcing projects, all responsibilities are handed over to an external team at a remote software house, separate from your own workplace. The team works from their station and there is very limited monitoring involved from your end.

Outsourcing is usually a broader kind of partnership where cooperation isn’t just limited to a specific skill set. Outsourcing a dedicated team helps businesses cover a wider variety of software-related services, such as UI/UX design, analysis and design, project management, quality assurance support and maintenance.

Since vendors have plenty of experience behind them and are fully involved in the project, the proportionality of achieving better results through outsourcing is higher than it is through staff augmentation.

Comparison Between Outsourcing and Staff Augmentation

Both models sound similar to each other, which is why a more detailed look is required at the pros and cons they carry.

Work and Organizational Culture

There’s a major difference between both, outsourcing and staff augmentation, as far as work and organizational culture are concerned. Outsourced developers from a dedicated team sit together and communicate with each other to create the best possible end result. As these team members have been working together since before your project, they share positive synergy and are able to communicate and collaborate well.

Software houses take good care of employees, which leads to generally higher morale and better confidence levels. On the flip side, engineers working in the staff augmentation model are able to work together with their concerned clients and operate on the same tangent as them.

Responsibilities and Costs

In both models, the software company is responsible for bearing the costs of recruitment. However, when you’re outsourcing a dedicated team, the vendor will cover the costs of software licenses, office spaces, hardware, employee training and utilities. The wellbeing of software developers will also be looked after by the vendor you work with. With staff augmentation, software companies have to accommodate the new developer on their premises and pay for their basic necessities and administrative expenses. However, the cost of hiring with staff augmentation isn’t as much as the cost of outsourcing a project to a team, which balances the equation in favor of staff augmentation.

Project Management

Project management in staff augmentation method of cooperation is usually done internally by the organization. The cooperation and mutual understanding between the internal project manager and external workers can lead to an efficient strategy for project management and handling.

By outsourcing your work to a dedicated team, you get a project manager with significant understanding of all in-house workers. This harnesses the capabilities of all employees and also helps you fully actualize your resources. Software companies can either achieve excellent collaboration through staff augmentation or hand the project management responsibilities and liabilities over to experienced shoulders in outsourcing.

Relationship with Vendor

No fruitful relationship can be harnessed without a solid base of compassion and mutual trust. Through staff augmentation, organizations get to benefit from a more permanent and direct form of cooperation internally.

A closer partnership usually enables better understanding and knowledge of the challenges your company faces and the ways your outsourcing partners can help mitigate them.

Final Word

While both of these methods of cooperation have their own benefits, staff augmentation stumps outsourcing as far as costs and internal accountability are concerned. However, the final call comes down to the type of project you have. Smaller projects might be easier to manage through staff augmentation, while more complex and important projects should be outsourced to dedicated teams or augmented through multiple staff reinforcements.