Staff Augmentation vs IT Outsourcing: How to Choose?

Given the current trends in the software development industry and the general labor market, more and more companies today prefer to rely on external experts instead of hiring their in-house development teams. Moreover, it’s worth mentioning that even firms with in-house programmers often turn to outsourcing or outstaffing services when their internal resources are insufficient for some particular projects.

IT staff augmentation vs IT outsourcing is probably the most popular dilemma for those companies that have already decided to cooperate with remote developers but still do not fully understand the peculiarities of the most popular cooperation models.

In this article, we'd like to share some basic information about these two approaches to establishing cooperation with a software development company and give tips to help you decide on staff augmentation vs outsourcing.

IT Staff Augmentation: What Is It?

To begin with, let’s start with the explanation of this model.

Thanks to this approach, you can enrich your development team with new specialists with niche expertise and knowledge and avoid many issues related to headhunting and recruiting.

Yes, for using staff augmentation services, first of all, you need to define what skills should be added to your team to bring the highest value to your project. However, it’s vital to understand that these specialists who will join your team in accordance with the principles of this model will be officially employed by another company (the vendor that you will be cooperating with). As a result, this staff augmentation agency will bear all responsibility for operational, legal, onboarding, training, and recruiting processes.

In other words, this model allows you to transfer the responsibility of headhunting to your IT partner. But as a result, you get the possibility to work with highly qualified and experienced developers and other tech specialists who will be fully focused on your project. Despite the fact that they will work remotely and they will have another employer, they will become a part of your in-house staff and will be managed by you.

Though the description of this model may sound quite appealing, let us also highlight its strong and weak sides so that you will be able to better analyze the staff augmentation vs IT project outsourcing pair.

Advantages of IT Staff Augmentation:

• Access to a global pool of talent. When you are looking for specialists that will join your in-house team and will be officially employed by your company, in the majority of cases, the area of search is limited to your city or country. With IT staff augmentation, borders do not exist for you. You can easily establish cooperation with the best experts from all over the world who will bring unique expertise to your project.
• Possibility to easily change the composition of your team in accordance with the continuously changing business needs. If you have initially hired only two developers but later see that you need to add more specialists, it won’t be a problem. At the same time, if due to some factors, you take a decision to reduce your IT budget and you want to scale your development team down due to some factors, it won’t be an issue as well when you use augmentation services. IT staff augmentation is an excellent alternative to traditional long-term contracts and it ensures great flexibility and easy scaling.
• Feasibility and cost-efficiency. This is a cost-effective model that allows businesses to spend less on hiring. Working with external developers is much more feasible than expanding your in-house team with temporary experts. Staff augmentation lets you pay only for the services that you need (time that developers will spend on your project). But when you have an in-house specialist you also need to think about additional expenses like medical insurance, paid vacations, social benefits etc.
• Focus on your project. Though these experts will work remotely, they will fully concentrate on your tasks, ensuring the highest work quality. And you will have the possibility to manage their work.

Disadvantages of IT Staff Augmentation:

• Different time zones. As in many cases it is very feasible to find developers off-shore, you need to remember that you may have different time zones. However, as a rule, developers are very flexible and can adjust their working hours in such a way that you will have at least a couple of hours per day of overlap.
• Possible language barriers. Though quite often software developers and designers not English native speakers, they learn the language. However, some issues are still possible.
• Necessity to learn the context. When specialists come to your project, it is obvious that they will need some time to dive into all its peculiarities and specificity. That’s why you need to make sure that you’ve taken this period into account during the stage of planning.

How to Address the Possible Pitfalls of Staff Augmentation?

The major challenges are related to the fact that quite often new people will join your team after the beginning of the project realization. Nevertheless, based on our experience we can formulate some tips on how to make this cooperation smooth and seamless for all parties.

1. Provide high-quality and comprehensive onboarding and promote a culture of inclusivity. Tell new specialists about your company’s values, explain the communication style that you have, and share your expectations. 
2. Make sure that new team members have enough time and information to dive deep into the specificity of your project. It is recommended to introduce a training program and maintain detailed project documentation. If it is possible, it will be a good idea to assign a mentor from your in-house staff who will help new experts get knowledge about the project and ensure faster integration of newcomers into the team.
3. Introduce regular check-ins and reviews to track progress and the quality of the work done. You need to have measurable performance standards that will be clear to everyone. It is also vital to provide timely feedback and guidance to all team members, including those who joined your projects under the staff augmentation model.

When Do Businesses Usually Choose Staff Augmentation?

There is a wide range of cases when staff augmentation can be a good choice.

• When it is important to ensure a high level of team scalability and flexibility. If a project presupposes the necessity to quickly scale up or down the team, staff augmentation is an ideal model.
• When you need to fill short-term skill gaps. It’s a very good idea to opt for staff augmentation for temporary positions when particular expertise is required only for a specific task. This approach will allow you to reduce your labor costs.
• When you want to keep control over the project on your own. With this model, you will maintain direct control over your projects. Of course, you will need to invest your time and efforts into such tasks as, for example, the integration of the augmented staff into your in-house team. Nevertheless, you will be able to keep your corporate management style and culture.

IT Outsourcing

To make the right decision on the staff augmentation vs project outsourcing dilemma, you should have detailed information about both models.

Outsourcing is a popular business model not only in the IT industry but also in many others. It can be explained as transferring responsibility for some processes and tasks to external vendors. In other words, let’s suppose that you have a project. You can hire a team that will fulfill all the tasks related to the project realization, practically without your involvement.

Sometimes companies rely on external service providers for some particular functions. For example, a company may not have an accountant and then all accounting tasks will be performed by another company. The same principle can be applied to the tech sector. For example, tech support services can be fully outsourced.

Benefits of IT project outsourcing:

• Reduced management responsibility. In the case of outsourcing, you are free not only from hiring and recruitment tasks but also from project management. On the one hand, it gives you more time to focus on other tasks. But on the other hand, many companies view this limited control as a disadvantage.
• Better budget control. There can be different payment models (the most popular ones are fixed price and time&material). Nevertheless, regardless of the chosen model, you can save your budget compared to in-house hiring.
• Access to highly professional experts. If you select the right vendor, you can be sure that the best specialists will build your project. And, of course, the results will be excellent.

Pitfalls of outsourcing:

• Limited control over the project. Many companies prefer to be able to track and control the development process, but in the case of outsourcing, these possibilities are limited. A vendor takes all the responsibilities and can fully control all the steps.
• Time factor. Outsourcing can’t guarantee the fastest time to market. A vendor needs time to study the requirements of the project, to develop a plan, etc.
• Problems in communication. Due to time talent pool language barriers, or inefficient communication tools, there can be issues with direct interaction between clients and developers.

You can read more about the pros and cons of outsourcing here.

How to Mitigate the Challenges of Outsourcing?

1. Clearly establish all the details of the project realization in the contract and agreements that you will sign with a vendor at the very beginning of your collaboration. There, it is vital to indicate such points as the timelines, deliverables, and quality standards. It is also recommended to track the progress against the set benchmarks and provide your feedback as soon as you notice any deviations from your expectations. Though an outsourcing company will be fully responsible for tasks assigned to the team, you still have the possibility to communicate with specialists during the project realization.
2. Choose the most reliable digital tools with video conferencing and collaborative features to facilitate your communication with the team. You can also define the frequency and formats of your meetings and calls in advance so that all participants are prepared. Though in some cases direct communication with developers can be difficult, the role of project managers shouldn’t be underestimated.
3. Develop a clear exit strategy that will outline the process for transitioning work back in-house or to another vendor if needed after the end of the project. Proper documentation and knowledge transfer are required to facilitate a smooth transition.

When Is It Better to Opt for IT Outsourcing?

Given all the benefits of this model, it can be a good option in many situations.

• When you have a well-defined project. Outsourcing will be a successful option for a well-documented scope of work and clearly described requirements. In such cases, it will be simple to agree on set deliverables and timelines with your hired team.
• When you need particular expertise that you do not have in-house. In such situations, you can find a good vendor with a professional team and fully rely on the knowledge and skills of these specialists.
• When you need to concentrate more on your core business activities. With this model, you can delegate project management tasks to the vendor. It means that you will have more time and resources to focus on your core business processes. This approach may have a very positive impact on your business efficiency and performance.

Staff Augmentation vs IT Outsourcing: Key Differences

To help you better understand what benefits you can enjoy when you choose these models, we’ve prepared a comparative table with the core differences.

Both models have their strong sides. But we can't say that they can be viewed as universal solutions. Each case should be analyzed individually before making a decision and choosing staff augmentation vs IT project outsourcing.

We offer you to analyze your ongoing situation by answering the following questions:

1. Can you manage the work of remote developers? Do you have enough resources for it?
2. Is it possible to ensure smooth interaction between in-house staff and external specialists?
3. Do you have well-structured internal processes on your project?

In case of positive answers to all the questions, consider augmentation services. But if you have said “no” at least once, it can already be considered a reason to think about outsourcing. Or if you still feel that you want to opt for staff augmentation, then you need to review the current processes to work with external programmers on your project seamlessly.

How to Find a Good Contractor?

You will be able to fully enjoy the benefits of this cooperation model only if you find a good contractor. The market is full of unscrupulous players. That’s why, pay your attention not only to the rates but also to such points as:

• Expertise in particular business domains;
• Experience in working with the necessary tech stack;
• Portfolio of successfully built projects;
• Reviews on external resources.

Also, it is very important to communicate with company representatives before deciding on possible cooperation. And, of course, feel free to ask as many questions as you have. It is necessary to ensure that the vendor's working principles are close to yours.

At Geomotiv, we are always open to cooperation with companies in various segments. We have rich experience in building projects of all types and different levels of complexity.

When our clients come to us with a request, we constantly deeply analyze the peculiarities of their projects, and business needs to offer the most appropriate forms of our potential cooperation. Based on your requirements, we can create a dedicated development team for you or take all the responsibilities for full-cycle project development. Of course, everything depends on your needs and the ongoing business conditions!

You can read more about our business approaches here, and do not hesitate to contact us. Let’s discuss how we can help you to boost your business with outstanding software development services.