Many modern businesses face the same dilemma. They need specialized skills to compete, but their budgets and size might not allow for a full-time team of experts. This is where smart staffing solutions come into play. There are several arguments to consider when you weigh up staff augmentation vs. outsourcing. What works for one company doesn’t always work for another.

In this article, we’ll talk about staff augmentation vs software outsourcing.

Staff augmentation vs. outsourcing: What Are They?

The two terms are often used interchangeably, but there are subtle differences. Staff augmentation, also called outsourced staff augmentation, involves adding specific skills to your existing team on a temporary or project basis. That means you retain control over project management, deadlines, and deliverables. The augmented staff works alongside your in-house team and your company is responsible for the project’s final outcome.

With outsourcing, your business hands over an entire project, function, or task to a third-party provider. The outsourcing company manages the project and is responsible for deliverables within agreed-upon parameters. Your control is limited to setting goals and approving milestones. Many companies prefer outsourcing vs. staff augmentation because the outsourcing company is responsible for the quality and timely completion of the work (within the agreed-upon scope). If staff are offshore, the cost savings can be significant.

Augmentation is generally preferred for short-term projects, whereas outsourcing is best for longer-term projects. Whether you choose staff augmentation vs. project outsourcing, the goal is typically the same: ensuring that you have the skills you need to complete a specific project or task.

IT staff augmentation vs. outsourcing: How to Decide

The first step is to identify the specific skill sets missing from your in-house team. Ask yourself:

• What tasks require specialized expertise?
• How often are these skills needed (ongoing, project-based)?
• What’s the budget allocated for acquiring these skills?

Once you know what you need, you can find the best solution.

Staff Augmentation

Staff augmentation allows you to “augment” your existing team by acquiring a specialized skill through a third-party provider. Here are some of the benefits:

• Greater Control: You maintain a high level of control over the project direction and quality of work.
• Integration with Existing Team: Seamless integration with your in-house team allows for faster onboarding and knowledge sharing.
• Access to Specialized Skills: Quickly fill skill gaps without the commitment of a full-time hire.
• Potentially Lower Costs: Staff augmentation can be more cost-effective than hiring full-time employees, especially for short-term needs.

Of course, there are drawbacks to this approach, too:

Managing Additional Team Members: You’ll need strong project management to ensure smooth collaboration between your in-house team and the augmented staff.

Finding the Right Fit: Identifying the perfect skill set within the provider’s network might take time.

Communication Challenges: With a larger team, communication can become more complex, requiring clear workflows and expectations.

Outsourcing

Outsourcing involves delegating an entire project, function, or task to a dedicated external company.  Think of it as handing over the reins and letting the experts take the wheel. The benefits include:

• Cost Savings: Outsourcing can be more cost-effective, especially for offshore outsourcing, due to potentially lower labor costs.
• Access to a Wider Talent Pool: Tap into a global talent pool with specialized expertise that might be unavailable locally.
• Reduced Workload for Your Team: Free up your internal team to focus on core competencies.

But, like with augmentation, there are drawbacks too:

Loss of Control and Visibility: Limited control over the day-to-day execution and decision-making processes.

Communication Challenges: Differing time zones and potential cultural barriers can create communication difficulties.

Hidden Costs: Unexpected revisions due to misunderstandings or inadequate communication can lead to additional costs.

Less Flexibility: Mid-project changes or adjustments might be more challenging due to pre-defined agreements and potential communication delays.

Choosing the Right Path

So, which option is best for you? Do you need control and close integration? Choose staff augmentation. Do you focus on cost savings and access to a wider talent pool? Consider outsourcing. Is the project short-term and requires specific skills? Staff augmentation might be better. Is the project complex and long-term and requires specialized expertise? Outsourcing could be the answer.

Ultimately, the best choice depends on your specific needs, budget, and project requirements. Consider factors like skill specificity, project complexity, and desired level of control when making your decision about staff augmentation vs. outsourcing.

Author: Michael K. Wallace

Michael is an experienced IT professional with over a decade of software development, project management, and business analysis expertise. He has a passion for leveraging technology to drive business growth and innovation. Michael enjoys sharing his insights and knowledge through writing and is dedicated to helping