All Blog Staff Augmentation VS Project Outsourcing: Which to choose? Wolfmatrix Marketing November 9, 2020 - 3 min read Covid-19 pandemic has had a massive negative impact on many industries, including travel & tourism, shopping retails, etc. But one of the sectors that haven’t had much damaging impact purely in terms of work demand is the IT industry. Especially for the IT workers, the flexibility to work from home during this pandemic has been pure bliss for them. IT sector demands continuous and dedicated personnel to coordinate together for day-to-day function, and any disturbance to this periodic routine disturbs their perfect working harmony. However, many companies have found it hard to find new permanent recruits during this
pandemic and have looked into various temporary models to fulfill their work demands. When companies consider outsiders to help in completing IT projects, they basically opt for two popular delivery models, i.e., Staff Augmentation and Project Outsourcing. What is Staff Augmentation? Staff Augmentation is the process of hiring new members into an existing or a new project temporarily (on a specific time of projects or even during the whole project) to meet the skills required for the project and deliver faster results. The temporary new members will be an extension of the company’s permanent members and work closely with them to finish the work on time. Advantages of Staff Augmentation Staff Augmentation brings a lot of benefits to a company. Major advantages are listed below: Flexibility Staff Augmentation allows companies to scale up or scale down according to their needs and demands. Skill Expertise Employers can hire people with a specific set of skills required for a particular project. The hands-on experience of the temporary recruits adds reliability to the project team.
Cost-Effectiveness The temporary recruitment process leads to the minimization of unnecessary staff costs and liability. Coordination The integration of new members into an existing team enables all of the members to coordinate as they know what the other is working on the projects. Uses Existing Resources Staff Augmentation allows you to use your existing team and resources. Disadvantages of Staff Augmentation Lack of economies of scale When the need for business resources increases, the cost structure generally does not change when resources get added incrementally. The costs usually are negotiated on a per-resource basis. Management overhead Adding human resources through staff augmentation will increase management overhead due to the increased staff in the workplace. Hard to find a perfect fit To complete numerous projects, the augmented staff will also require extra training, contributing to higher costs.
Further Reading: How To Choose The Right Staff Augmentation Service? What is Project Outsourcing? Project Outsourcing is an approach where companies hire an external service provider to perform the task on hand. In this approach, the hiring company loses control of the project/task and is less engaged in it as the service provider works separately. It enables the hiring company to dedicate its full focus on their other projects. Major Advantages of Project Outsourcing Some of the advantages of Project Outsourcing are described below: Reduced Load Companies can focus all their energy on other projects as the outsourcing company takes all the responsibility for the project given to them. Skill Expertise: Project outsourcing directly provides skilled expertise in terms of project necessity. If the staff is not well trained to handle specific projects, project outsourcing is more advantageous and sensible than staff augmentation. Flexibility
Just like the Staff augmentation, project outsourcing is also a model that allows a company to scale up or down according to their needs and demands. Lower Risks The SLA agreement between the hiring company and the outsourcing firm means that the outsourcing company shares the liability if the project is not completed on time. Cost-effectiveness: Project outsourcing eliminates the need to hire permanent staff and the cost it incurs. Disadvantages of Project Outsourcing Internal resistance Some organizations may feel challenged by an outsourcing model for a project. While most outsourcing tasks can arise a lack of internal capabilities. Some internal employees may worry about the model would reduce internal employees in favor of outsourcing projects. Smaller projects Under a project outsourcing model, smaller projects can be less cost-effective than a staff augmentation model. Some outsourcers may be resisting to take on small projects for such work and charge a premium. More complex research
Generally, the project needs more than just technical support, so the company must check the review of UI / UX, project management, and QA background when searching for a software development partner. Verdict From the above information, it is clear that project outsourcing and staff augmentation have some shared advantages, but their usage depends upon your requirements. If you don’t have any expertise or skilled workforce on a particular project, it is better to do project outsourcing than staff augmentation. Even more, outsourcing can be a wise choice for seasonal projects. However, if you have enough human resources to complete a large portion of the project, staff augmentation can be a perfect solution to get an advantage over your competitors. Staff augmentation can be typically best suited for shorter-term projects, as opposed to long-term projects, which require months or years to complete. Want useful tips? Get Our Free Resource Learn More
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