Any modern business has to meet a growing number of IT needs to ensure its successful development and high competition in the market. To cope with all the IT activities effectively and stay focused on delivering their core services or a product, businesses often refer to professional IT outsourcing companies.
IT outsourcing solutions allow businesses to optimize their spendings on IT services, complete their daily IT tasks on a professional level, and increase their operational efficiency. For this, IT outsourcing companies offer a variety of engagement models. The most popular are staff augmentation, complete product development outsourcing, or hiring a dedicated team of experts. In this article, we look into the pros and cons of the two most popular models: staff augmentation and IT project outsourcing and explain when to choose one over the other.
IT Staff Augmentation
What is staff augmentation in IT outsourcing? Staff augmentation is one of the types of software outsourcing services where staff augmentation companies provide their specialists on a temporary basis to enhance in-house team performance. Usually, IT companies offer staff augmentation on a Time and Materials contract when their clients pay for IT staff on an hourly basis and the materials needed to complete the project.
Let’s have a more detailed look at the IT staff augmentation service, its evident benefits, and hidden drawbacks.
Five Key Benefits to Staff Augmentation
- Cost-efficiency. IT staff augmentation helps to reduce hiring and onboarding costs as well as full-time wages and benefits which are inevitable in in-house employment. As a result, you pay only for the actual hours spent on your project, cutting short-term and long-term expenses.
- Fast onboarding narrow specialists. According to Harvey Nash’s KPMG CIO Survey, the IT industry is experiencing a shortage of skilled and narrow IT experts. Therefore, finding the right specialist in your area can be a challenging task. IT staff augmentation allows your business to tap into the talent pool of experienced and trained IT professionals and find the specialists most suitable for your IT projects.
- Seasonal employment. IT staff augmentation provides flexible schemes for engaging with external teams.. It means that you can add IT professionals when you require them at most and downsize them when their support isn’t necessary anymore. For example, to opt for a resource augmentation model to complete a particular project or to support your in-house team with supplementary staff during the pickloads. Moreover, it’s much easier to terminate a staff augmentation contract than reduce or even fire the in-house team members.
- In-house management. When opting for staff augmentation, it implies that the external team will work directly with your in-house team. They will follow the internal work regulations and report directly to your managers. It means that your managers and team leads will consider when and where they need to fill in the skill gaps with the needed IT specialists.
Staff Augmentation Drawbacks
- Management capability. When hiring an external team your company managers should be prepared to manage more people, provide additional guidance, and much more.
- Additional training and integration. Although an external team will obtain the necessary IT skills, your managers will still have to explain your company’s internal processes and inner policies. Moreover, when you add new specialists to an already existing team, you need to allocate time to the newcomers to learn the company procedures and rules.
What is project outsourcing meaning and why opt for it when there is staff augmentation?
Project outsourcing is the model when a business hands over its entire project development to IT outsourcing professionals. It means that IT outsourcing clients don’t have to care about team management or office preparation to welcome new employees. Instead, they can focus on their core competencies while all the IT work is done by the professionals.
IT project outsourcing involves a team of experts who are ready to assume project management tasks, as well as all the software development processes. The project team will work separately from your in-house team and it doesn’t get involved in any in-house business activities.
What can you gain from the IT project outsourcing services? Let’s take a look at its key benefits.
Key Benefits to Outsourcing
- Reduction in costs. When you outsource your IT development projects, just like in the case of staff augmentation, you don’t have to invest in staff recruiting, onboarding, and training as well as to care about their payroll or bonuses. This allows to significantly reduce the costs inevitable in in-house hiring.
- Quick project start. For internal teams, it can take much time before the project gets off the ground. The team may require additional training, hiring narrow specialists, or buying special equipment to start the project. Whereas in project outsourcing the team handles full-cycle development of the project from documentation development to the product release and its maintenance.
- Technical and management arrangement. When outsourcing your projects, you don’t have to bother about finding extra space to arrange working places for the new employees nor to care about buying licensed software or hardware. Moreover, IT outsourcing companies undertake the responsibility of employees’ selection and their training. As a result, you get an all-set team for a fixed price.
- Reduced risks. IT outsourcing companies provide highly skilled specialists who assume the responsibility for project outcomes. As a result, they accept the risks associated with the development of your digital solution.
- Offloading an in-house team. With IT project outsourcing you can focus on your core business aims and offload your in-house employees, focusing them on more important business tasks. This way, your managers can gain more flexibility and work on the projects falling under your company’s particular area of expertise.
Selecting the Best Technology Delivery Model for You
Choosing the right technology delivery model is a challenging task. In this case, the “one size fits all” concept doesn’t work and you have to consider many variabilities. They include:
- the budget your business is ready to invest into the IT services;
- project requirements and tech skill set of the employees;
- technical capacity and availability of your in-house team;
- project deadlines and product time-to-market speed;
- position of your competitors in the market, and many other aspects.
Staff augmentation is a flexible staffing solution that brings outside tech expertise to your in-house team. This type of outsourcing works best for already existing projects. You can add supplementary employees during certain project stages and remove them quickly.
Project IT outsourcing is the best choice for those who want to build their projects from scratch and don’t mind handing the direct control over them to an external team. What’s more, project outsourcing removes the workload off your team, allowing focusing on your main business.
A Quick Summary on Staff Augmentation and Outsourcing Model
Here is a quick summary of the key points for you to refer to when choosing one model over another.