The Website and Software development industry is rapidly growing since the Covid-19 Pandemic. With so much demand in software development, the need for skilled developers also increased. The shortage of competent software engineers, on the other hand, is a fact that today’s market must accept and adapt to.
Fortunately, there are different ways to fill the space between the supply and demand for skilled developers by introducing either staff augmentation or outsourcing processes.
But which one should you choose? In this article, we will learn all about Staff Augmentation and Outsourcing. We will also understand the circumstances where each one of these options fits the best.
Let’s dive into more details.
What is Staff Augmentation?
Staff augmentation is a sort of outsourcing service in which a software firm hires external engineers, generally on a Time and Materials contract basis.
In reality, the outsourcer’s in-house team is supplemented by third-party professionals who operate on the buyer’s premises for the project’s duration.
Companies save money on recruiting, payroll services, and project implementation by using staff augmentation. This approach is also readily scalable – because it is far quicker to cancel a partnership than to stop an employment contract, it is feasible to swiftly reduce (or increase) FTEs if necessary.
Furthermore, this total shift of responsibility reduces HR and employment procedures, allowing the outsourcer to concentrate more on the core business.
When you should Consider Staff Augmentation
There are several circumstances where Staff Augmentation is the perfect solution to hire the right skill set for your project development. Here’re some of the most common cases.
# 1: When the Project is Lengthy
A staff augmentation arrangement can help a company achieve its demands in a variety of ways. It is not, however, a perfect answer in every situation. Short-term initiatives, as opposed to long-term projects that take months or years to complete, are ideally suited for staff augmentation.
On lengthier projects, it may still make sense for a company to hire a contingent worker, in which case an outsourcing contract would be preferable to a staff augmentation approach. Staff augmentation firms are frequently eager to arrange such agreements.
# 2: When Secrecy is the Soul of the Project
Some initiatives are top-secret and involve sensitive intellectual property (IP). In these situations, staff augmentation options should be carefully considered. The justification for that decision, on the other hand, is typically based on psychological comfort rather than concrete data. A contract signed with a contractor is objectively as strong as one signed with a full-time employee. It’s worth remembering that one of the most well-known data breaches in history was orchestrated by a subcontractor who used to work for a tier 1 services business and is now seeking refuge in Russia.
#3: Ramp-up Time
If your company is managing a contingent workforce, the majority of businesses say their systems are ineffective. Misunderstandings regarding context might be one of the reasons behind this.
In an enterprise setting, context—a broader cross-functional understanding—is advantageous. However, the impact of ramp-up time should not be overlooked. For projects requiring high degrees of complexity, a staff augmentation approach may not be the ideal option, indicating a significant ramp-up period (although this factor sometimes depends on the competency of the potential augmented staff hire in question).
What is Outsourcing?
Outsourcing a dedicated team entails forming a partnership with a remote software firm and entrusting the project to its programmers.
It’s generally more than just team augmentation. It includes a wide range of software-related services, including analysis and design, UI/UX design, quality assurance, project management, and support and maintenance.
In addition, because the vendor is involved in such a significant way, the motivation to get the best possible results is proportionally stronger than with employee augmentation.
When should you Consider Outsourcing?
Outsourcing has its benefits, such as cost savings, increased corporate focus, and ensuring that internal resources are devoted to business-critical tasks. Other conditions must be met for outsourcing to be successful.
The basic concept is to ensure that in-house operations provide value to the company and that your current personnel can’t do outsourced tasks. So, to outsource successfully, conduct some research and ensure that you have the following:
- Well-stated and clear Business Goals
- A well-understood and practical business plan
- Highly skilled selection of outsource employees
- Simple plan to keep continuous contact with contractors
- Well-defined written contracts
Staff Augmentation vs. Outsourcing – The Key Differences
To understand the critical differences between the two, let’s look at the pros and cons of both techniques. It will help us know which approach best suits the company to attain the required business goals.
Pros and Cons of IT Staff Augmentation
IT staff augmentation enables a firm to expand its workforce based on the additional capabilities needed to support its goals. Before deciding on the staff augmentation path, consider the following advantages and disadvantages.
- Control over staff
- Integration with internal processes
- Leverage existing resources
- Specialist expertise
- Flexible for changing needs
- Reduced employer burdens
- Easier internal acceptance
- Maybe training intensive
- It relies on internal processes
- Lack of economies of scale
- Increased management overhead
- Employee vs. contractor distinction
Pros and Cons of IT Project Outsourcing
IT project outsourcing allows a corporation to use the resources of another company to complete full projects. In certain circumstances, outsourcing might take the form of “out-tasking,” in which particular project duties are delegated to a subteam staffed and overseen by the outsourcer. Here are some advantages and disadvantages you should consider before opting for project outsourcing.
- Reduced training costs
- Reduced management overhead
- Allows for core business focus
- Variable cost structure
- Less legal risk
- Lack of control
- Potential internal resistance
- Finding a quality outsourcer
- Not as cost-effective for small projects
- Internal process integration issues
Consider working with a provider that offers both staff augmentation and project outsourcing services when choosing a vendor. This gives your company the benefits of both worlds without adding to the administrative load of managing numerous vendor agreements.
Whether you need a single professional or to outsource a whole project, find a vendor you can trust to take the time to understand your business and provide the desired outcomes.