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Every once in a while, organizations plan to expand their business operations. And while they want fresh talent off the block; they need someone who can easily fill the gap within the organization and carry out major projects. Today, there are different models on which many businesses capitalize but the two most common ones are staff augmentation and project outsourcing.  Choosing between staff augmentation and project outsourcing depends on your organization's circumstances. 

What is Staff Augmentation?

It involves supplementing your existing team with additional skilled personnel, often for a specific period or project. This approach is ideal when you need to scale up your team quickly, maintain control over project management, and integrate external expertise seamlessly into your current workflow.

What is Project Outsourcing?

On the other hand, entails handing over an entire project to an external organization. This can be beneficial when you want to focus on core business activities, reduce management overhead, and leverage specialized skills or technologies that are not available in-house. Ultimately, the best choice depends on the nature and scope of the project, available internal resources, budget constraints, and the level of control you wish to maintain. In this article, we are going to explore these two popular models of the IT industry.  We will also discuss which one should your organization leverage and let’s explore both and see which ones are suitable options.  Since both are completely different models, people often mix them up. But that’s what we are here to clear; today, we will shed light on the benefits and disadvantages as well as explore their core differences.  So without further ado, let’s read everything about it.   But before we get into the details, take a look at one of our infographics on Staff Augmentation vs Project Outsourcing. 

What is IT Staff Augmentation? 

Let’s say you’re planning to introduce a portal-based software at your workplace. However, you’re running short on credible resources who can create the perfect software solution for your in-house teams.  Workers who are employed currently either lack the capabilities or they do not have access to resources. It’s one such place where staff augmentations come into play; in the staff augmentation model, you bring on board a third-party team of consultants, contractors, or freelancers to get the job done for you. They are usually hired on a contractual basis and once the project is complete, they are fairly compensated for it. 

Pros of Staff Augmentation 

• The digital marketing landscape is full of IT talent ready for hire. When you’re out there searching for credible resources you don’t limit yourself to your local area or within your vicinity. You expand your horizons and try to bring in people who are equally talented and can meet your desired objectives. You want someone who is fully equipped and provides you with the best value for money. Considering this, staff augmentation allows you the absolute liberty to find people who are capable of achieving just that! 
• Staff augmentation allows companies to easily scale their teams as per scaling project requirements. Let’s say your project requirements grow (maybe your team wanted a new added feature introduced within the software). And this expertise is not that easily found among usual developers, an augmented staff can easily adjust to the changing requirements. You will have the liberty to onboard a freelancer or consultant of your choice to nail it perfectly. 
• Staff augmentation is cost-effective. This means that instead of hiring a bunch of resources full-time and paying off hefty amounts in salaries, or contracting a third-party software house to build you a solution, staff augmentation gives you an edge in hiring people at an hourly rate. With augmented staff, you only pay people for the hours they put in at work. 
• Staff augmentation opens the door to effective cohesion and greater teamwork. When you outsource projects, the vendor you hire usually isn’t aware of the internal structure & culture of the client’s business. With staff augmentation, you can easily overcome this gap by dispatching first-hand knowledge to the company under the same conditions. 
• On the managerial layer, you have greater control over the supplementary staff; you can have a better bird’s eye view of their work as compared to what you get when you outsource vendors. Outsourced individuals often work independently. 

Cons of Staff Augmentation 

• Most supplementary staff that you onboard often increases the overhead cost by introducing project managers, CIOs, CTOs, and other such roles; this only happens when you don’t have sufficient project managers, CIOs, or CTOs within the organization. These project management teams usually come with more resources, tasks, and deliverables which often extends the timeline for deliverables. If your organization lacks the required management personnel, then staff augmentation isn’t the best option for you. 
• Another drawback of working with supplementary staff from foreign countries is the time zone differences. Maybe you’re living in the United States but the guy who is capable of adding useful features to your software is residing in India. When you choose between insourcing & outsourcing, this peculiarity can often weigh you down. Staff augmentation might not suit an organization who is not savvy in working in different time zones. 
• Another downside of working with staff in foreign countries is that you often end up working with employees who don’t speak the same language as you do. That’s why it would be more helpful to outsource the entire project to an SMB within the same country as they are more culturally diverse & can deal with such people. If you have concerns with language boundaries and you want a robust team working, then staff augmentation might not be the best choice for you. 

Example of A Global Tech Giant’s Expansion Project 

Sure, for this scenario, let's imagine a Silicon Valley-based software firm, "InnovateSoft," specializing in creating innovative software solutions for businesses.

1. Background:

InnovateSoft is a thriving software company based in the heart of Silicon Valley. They have built a solid reputation for developing cutting-edge solutions that streamline business operations for their clients. With a strong foothold in the market, they now aim to create an industry-leading project management software solution, codenamed "TaskMaster."

2. The Challenge - Developing "TaskMaster"

InnovateSoft's in-house team was already committed to multiple client projects, and taking on the development of "TaskMaster" would require additional resources and expertise. The company needed a dedicated team of software engineers, UI/UX designers, and project managers who could focus solely on bringing "TaskMaster" to life.

3. Objective:

The primary objective for InnovateSoft was to create a robust, user-friendly project management solution that would revolutionize how businesses organize and execute projects. "TaskMaster" was envisioned to be a comprehensive platform, offering features such as task allocation, real-time collaboration, progress tracking, and advanced reporting, all integrated into a seamless digital experience.

4. Solution - Staff Augmentation at Branex to the Rescue

Recognizing the benefits of staff augmentation, InnovateSoft decided to partner with a leading staffing agency, "Branex". Together, they identified the specific skill sets required for the "TaskMaster" project, which included expertise in full-stack development, UI/UX design, project management, and quality assurance. Branex scouted a range of talented professionals from across the globe, ensuring a perfect match between the project requirements and the skills of the augmented team members.  The augmented team consisted of:

• Software Engineers: Experienced full-stack developers proficient in the latest technologies, such as React, Node.js, and MongoDB.
• UI/UX Designers: Creative designers who could translate the software requirements into a user-friendly and aesthetically pleasing interface.
• Project Managers: Skilled professionals who could oversee the development process, ensure timely deliveries, and coordinate between the in-house and augmented teams.
• Quality Assurance Specialists: Experts in software testing and quality assurance to guarantee a bug-free and reliable product.

5. Outcome - "TaskMaster" Success

With the augmented team in place, InnovateSoft successfully developed and launched "TaskMaster" within a record time frame. The benefits they realized included:

• Rapid Development: The augmented team hit the ground running, quickly integrating with the existing in-house team and contributing their specialized skills. This accelerated the development process, ensuring "TaskMaster" met its aggressive launch deadline.
• Cost-Effectiveness: Staff augmentation allowed InnovateSoft to access a global talent pool without the overhead costs of hiring full-time employees. This resulted in significant cost savings, which could be allocated to other strategic initiatives.
• Flexibility and Scalability: As the project progressed, InnovateSoft had the flexibility to scale the augmented team up or down, depending on the changing requirements. This ensured optimal resource allocation and a more efficient development process.
• Diverse Skill Sets: The augmented team brought a diverse range of skills and perspectives, enriching the overall development process. This resulted in a more robust and feature-rich "TaskMaster" platform.

What is Project Outsourcing? 

Now let’s assume the same scenario; however, this time you don’t have enough time, resources, or seating arrangements to entertain a full-fledged IT team at your firm. In this scenario, the company often leverages a third-party company to perform its IT-related tasks and handle complex projects & operations. The process normally includes complex tasks of computer programming and so on. In software development outsourcing services, businesses usually make a contract with a third-party vendor (such as a Small Business or a small-scale software house specialized in the expertise required for building the solution). 

Pros for Project Outsourcing 

• There is abundant IT talent available in the market for hiring especially when you are in search of someone who holds a track record of success. However, if you want to deal with reduced management overhead, then project-based outsourcing really works wonders when your organization mostly wants to focus on end results. If you are someone who doesn't want to get trapped by nit-picking tiny details, project outsourcing is the perfect option for you. 
• In IT project outsourcing, the vendor is somehow completely responsible for the entire project. Right from the start till the project ends, they handle all tasks for software development, testing & quality assurance. 
• Another concern that often organizations experience when outsourcing software development teams is not being able to assemble a local team that’s well-equipped to perform the job effectively. It’s where IT outsourcing becomes a popular choice as it allows businesses to hand over the entire project to capable hands. 

Cons of Project Outsourcing 

• Project outsourcing usually requires giving up most of the control over the project workflow. When the communicator is inadequate, project outsourcing might not be a suitable choice for business owners. 
• When you invest in project outsourcing, don’t forget that the process can have a slow starting point. It’s usually because there are plenty of legal considerations that require finalizing, including documentation. 
• Project Outsourcing is often expensive. Reason - it takes up a lot of responsibility to outsource vendors who are responsible for delivering the final result. In fact, it also puts the quality of the product at risk and charges 30% more compared to staff augmentation. 
• Resource availability is always in question. When you opt-in for project outsourcing from companies in Ukraine, Poland, and Belarus. Although they have tech talent in abundance, they may not be able to deliver as accurately a solution as a local team in the USA would. 

Choosing the Right Model - Staff Augmentation or Project Outsourcing! 

To choose between staff augmentation and project outsourcing, consider your business needs, project complexity, budget, and control preferences. Staff augmentation suits those who want control, quick team scaling, and seamless external expertise integration. It's flexible, cost-effective, and provides diverse talent. Project outsourcing is ideal if you prefer reduced management overhead and focus on core activities. It relieves day-to-day project management burdens but may require giving up some control. Opt for staff augmentation for short-term needs and specific skills. Choose project outsourcing to delegate non-core functions and access specialized expertise. Evaluate your context to decide. Both models can drive success when aligned with your unique objectives.  Branex is a staff augmentation company offering the best-in-class staff augmentation service. We are your one-stop shop for all design and development needs. Whether you’re searching for a team to build your next-generation mobile app, web app, or any other form of digital solution, we are here!

In this transformative digital world where we live, everything is driven by technology for IT Outsourcing.  It often becomes increasingly difficult to adapt and survive. But thanks to digitally empowered technologies and robust innovations, we must learn to adapt and survive. The digital age has brought a fundamental shift in the way we work, interact, and conduct business. If we want to stay competitive and stay ahead of the game, we need to be agile, responsive, and open to embracing disruptive change.  IT outsourcing is one such way. It allows organizations to overcome traditional practices adopted by businesses for decades. Effective IT outsourcing binds third-party offices to form rigid contracts and follow a one-size-fits-all approach. In this article, we are going to explore the innovative approach to learn how new technologies and strategies are reshaping the IT outsourcing landscape.  We will also learn how businesses can continue to grow by reimagining the digital age. We will also check out some success stories, and define the future of this dynamic field for good. 

What is IT Outsourcing? 

IT outsourcing, also known as contracting out IT services, is a formidable business practice, one that requires third parties to assist, organize, and perform IT functions successfully.  Today, businesses can outsource many IT tasks such as programming, application development, web app development, digital marketing, technical support, and more.  IT outsourcing is an effective business strategy that's massively adopted by banks, educational institutions, healthcare institutions, and other financial services worldwide. For a business to successfully implement an IT outsourcing model within its respective organization. Business owners need to communicate the organization’s vision and mission with the third-party IT vendors. 

Traditional IT Outsourcing - What Are the Limitations & Challenges? 

Traditional IT outsourcing is a robust strategy for all kinds of organizations (may it be an enterprise or a small business). However, just like with everything else, IT outsourcing also has its fair set of limitations & challenges. It can also create a roadblock to the organization’s ability to achieve success & stay competitive. The three foremost concerns associated with traditional IT outsourcing are: 

1. One-Size-Fits-All Approach

Traditional outsourcing often follows a standardized model, offering limited flexibility to customize services. This can make it difficult for organizations with unique requirements to have their specific needs met. As a result, businesses may struggle to find a perfect fit for their IT functions, leading to inefficiencies and dissatisfaction.

2. Complex Vendor Selection

With multiple providers offering similar services, comparing and evaluating proposals becomes a complex task. Organizations may face challenges in effectively assessing cost structures, service quality, and the true capabilities of each vendor. This complexity can lead to increased risk and uncertainty in the decision-making process.

3. Data and Legal Risks

Outsourcing sensitive IT functions can expose organizations to potential data management issues and legal violations. Ensuring data privacy, security, and compliance with regulations can be challenging, especially when working with multiple vendors or across different jurisdictions. Data breaches, mismanaged data, or non-compliance with legal requirements can have significant financial and reputational consequences.

4. Lack of Agility

Traditional outsourcing contracts are often long-term and rigid, making it difficult for organizations to adapt to changing market demands or new technologies. The lengthy negotiation and implementation processes inherent in traditional sourcing can further hinder an organization's ability to respond quickly and effectively to disruptive forces.

5. Talent and Skill Gaps

In some cases, outsourcing can lead to a loss of control over talent and skill management. Organizations may encounter challenges in accessing specialized skills or managing the transfer of knowledge effectively. This can result in skill gaps within the organization and a potential overreliance on external providers for critical functions.

What Are the Different IT Outsourcing Models? 

When you’re opting to work with an outsourced IT vendor, you will be asked what preferred model of outsourcing would you choose. Well, the short answer is that there are several models, and each is different from the other based on the model’s structure and its relative pricing.  The four models that are predominantly found in the market are; staff augmentation, project-based outsourcing, dedicated software development team, and offshore development center (ODC). These 4 are quite abundantly used in many organizations nowadays.  The one that you choose for your particular business model depends on the project's nature, the resources on hand, and the budget you have. 

1. Staff Augmentation

If you’re experiencing skill gaps or talent gaps within your existing teams, then staff augmentation is a successful IT outsourcing model for your business. This particular model is not only adopted by IT-based companies but it’s also successful among non-IT companies as well. It takes away the burden of hiring full-time workers for on-demand skills for your specific project. In this type of IT outsourcing model, the staff you outsource to work on your project is under the vendor’s payroll. In this model, you only pay for the service you get; once the contract ends, the third-party vendor will simply take care of the compensation and benefits offered to the augmented staff. 

2. Project-Based Outsourcing

If your project is small, and you want to onboard a team for a limited time, then project-based outsourcing is your best option. In this type of IT outsourcing model, the two parties decide on the timeline of the project and set the budget mutually. Once the requirements & specifications of the project are communicated, the vendor will start with the project without much guidance or any input from the client. However, you have the liberty to ask the client for clarification. In such models, you can also conduct review meetings and take follow-ups as the project progresses. 

3. Dedicated Software Development

A dedicated software development team model is one where you need an entire group of IT professionals specifically chosen to work on your digital project. It will include all IT staff members such as project managers, business managers, programmers, data scientists, quality assurance engineers, and other similar experts. The dedicated software developers outsourced by a software development company are technically yours until the contract terms end. Unlike full-time paid employees, you don’t have to worry about administrative & human resource expenses; it’s all managed by the vendor who takes care of everything. 

4. Offshore Development Center (ODC)

Last but not least, ODC is an outsourcing model where an organization sets up a dedicated IT resource team from another country. In this IT outsourcing model, you don’t have to deal with lowered labor costs or tax cuts/returns for the team you onboard. In fact, they hire a local agency from the targeted country. A third-party vendor will eventually take care of the complete regulatory compliance, recruitment, and office facilities for your specific team. 

Disruptive Technologies - The Driving Force Behind Change! 

Technology is truly termed as disruptive when it succeeds in bringing about major changes in processes and mechanisms. It’s a tool that works as a source that implements change within user behavior. A disruptive technology holds enormous capability to change people’s lives.  It creates its own values and risks. Such innovations lead to the development of predictable patterns and replace outdated previous technologies. It carves the path to introducing more modern & robust solutions overall. Harvard professor Clayton Christensen introduced the concept of disruptive technology in his article, “Disruptive Technologies: Catching the Wave” published in 1995. The concept didn’t become quite the success story until late 1997 when he openly shared the concept in one of his best-selling books, “The Innovator’s Dilemma” that really explored the disruptive innovation theory in depth & detail.  As Christensen puts it, disruption starts at the core of innovation. It begins when a group of consumers take into account certain characteristics that only a few appreciate. 

How Disruptive Innovation Changes the Market’s Direction? 

Disruptive, in its essence, is something that breaks or bursts spontaneously.  When we talk about disruptive technologies, they are also characterized as such. These technologies potentially exist based on factors of simplicity, accessibility, and affordability.  They coexist with previous technologies, for a time without replacing them completely. However, until it is fully implemented, organizations and users have to go through a period of adaptation.  For example, the iPhone was launched back in 2007 by the company Apple.  It revolutionized the use of the Internet on mobile phones. Once the smart era began, it changed the entire ecosystem leading to innovation and forcing the market to improve its products & services likewise.  Before we knew it, competitors such as Android and many others emerged. Today, we are living in an era of smartphones where everything and every task that we perform is done on smart technologies.

How Disruptive Technologies Lead to IT Outsourcing - A Few Good Examples!  

It is no secret that disruptive technologies have relatively expanded the business world.  Today, we are observing how many disruptive technologies are contributing to staying competitive, reducing overall costs, and creating multiple access points for businesses. Here are some practical examples showing how disruptive technologies are contributing to IT outsourcing. 

1. Cloud Computing

A mid-sized retail company faced challenges with its on-premises IT infrastructure, particularly during peak shopping seasons. To address these issues, they decided to outsource their IT needs to cloud service providers such as Amazon Web Services (AWS) and Microsoft Azure. This strategic move allowed them to scale resources dynamically, accommodating varying demands without substantial investments in hardware. As a result, the company experienced reduced costs, enhanced high availability, and improved disaster recovery capabilities. Outsourcing to cloud service providers enabled the retail company to focus on its core business operations while leveraging advanced cloud technologies.

2. Artificial Intelligence and Machine Learning

A healthcare organization aimed to enhance patient care through AI-driven diagnostic tools but lacked the internal expertise required to develop such systems. To overcome this hurdle, they outsourced the project to a specialized IT firm with proficiency in artificial intelligence and machine learning. The outsourced team successfully developed AI algorithms capable of analyzing medical images and predicting patient outcomes. This innovation led to more accurate diagnoses and personalized treatment plans, significantly improving patient care and operational efficiency within the healthcare organization.

3. Blockchain Technology

A financial services company sought to create a secure and transparent transaction platform utilizing blockchain technology. Recognizing the limited availability of experienced developers in this nascent field, they opted to outsource the project to a firm with a proven track record in blockchain development. This decision facilitated the rapid development of a robust blockchain-based system, ensuring secure and transparent transactions for their clients. By outsourcing to experts, the financial services company was able to navigate the complexities of blockchain technology and achieve its strategic objectives efficiently.

3. Internet of Things (IoT)

A manufacturing company aimed to implement IoT solutions to monitor equipment performance and predict maintenance needs. The complexity of IoT integration, which included sensor deployment and data analysis, prompted them to outsource these tasks. They partnered with an IOT service provider specializing in IoT solutions. This collaboration resulted in enhanced operational efficiency, reduced downtime, and allowed the manufacturing firm to concentrate on its core competencies. By leveraging external expertise, the company successfully integrated advanced IoT technologies into its operations.

4. Robotic Process Automation (RPA)

A large insurance company wanted to automate repetitive back-office tasks, such as claims processing and data entry. To achieve this, they outsourced their RPA initiatives to a firm with expertise in automation. The deployment of bots significantly reduced processing time and errors, allowing employees to focus on higher-value activities. This strategic move not only improved overall efficiency but also enhanced the accuracy and speed of routine tasks, thereby driving operational excellence within the insurance company. 

5. Big Data and Analytics

An e-commerce development company sought to leverage big data to better understand customer behavior and refine its marketing strategies. They outsourced their data analytics needs to a specialized firm capable of handling vast data volumes and employing advanced analytical techniques. This collaboration yielded actionable insights that informed targeted marketing campaigns and increased sales. By outsourcing its big data initiatives, the e-commerce company was able to harness the power of data analytics to drive business growth and improve customer engagement.

6. Cybersecurity

A medium-sized enterprise recognized the escalating threat of cyberattacks and the critical need for robust cybersecurity measures. Building an in-house cybersecurity team proved costly and complex. Consequently, they outsourced their security operations to a managed security service provider (MSSP). The MSSP provided 24/7 monitoring, threat detection, and incident response, ensuring the company’s data and systems remained secure. This partnership allowed the enterprise to safeguard its digital assets effectively while focusing on its core business functions.

Concluding Paragraph

The future of business is being shaped by disruptive technologies and IT outsourcing.  Organizations that can harness these tools effectively will gain a competitive edge and unlock new growth opportunities. IT outsourcing empowers businesses to access specialized skills and innovative technologies, enabling them to focus on their core strengths.  By adopting this strategy, businesses can overcome talent gaps, rigid traditional practices, and high costs associated with in-house operations. Do you want to outsource your IT expertise?  Hire a dedicated development team for your next-gen software solution only at Branex.  Whether you’re looking for a dedicated custom software team or some other IT outsourcing model, we are your perfect destination for your IT project management. 

Marketing and branding managers of many organizations often find themselves in a difficult situation: to outsource or not? While outsourcing strategy to a digital agency for execution comes with its own set of challenges, however, if the right fit is found, then there are a host of benefits that you will enjoy as well. Provided, you find yourself a professional digital agency that not only understands your products and your industry but can make close connections with your target audience by executing targeted digital strategies for you. Here is how outsourcing your digital strategy can truly pay off:

Access to Veteran Digital Experts

Probably one of the obvious benefits of outsourcing to a digital agency is that your marketing strategy will be created and executed by seasoned experts. Since a digital agency has in-house experts in every field, namely SEO, content, and online marketing, their collective expertise creates a very potent digital cocktail for your brands. Also, with years of experience, they are in a position to skip the figuring-it-out phase and dive straight into creating brand awareness through proven means and generating leads as they move forward.

Tailored and Measurable Strategies

The best digital marketing agencies create tailored strategies for clients that are not only as per the proposed deadlines but also transparently measurable. By pinpointing goals, these strategies create a consistent focus on return on investments (ROI), ensuring accountability and marketing success.

Ready to be Executed For Proven Tactics

Outsourcing to a digital marketing agency saves you from the pain of learning the hard way through trial and error. When you outsource your work to a digital agency, you will have immediate access to tried and tested processes that are going to result in smooth, hassle-free onboarding experiences, and fewer problems will arise due to the expertise in putting them to work as you go forward in time.

No Staff Problems for You and Smoother Executions

One of the keys to successful digital campaigns is consistency. The problem remains that even staff is not a machine and they need to take breaks. When a staff member is sick or on leave, everything suffers. One great example would be content creation. If your content writers are not at work, then everything starting from content creation to your search engine optimization efforts and your social engagements will suffer. Also Read: Benefits of Staff Augmentation for Your Business Opting to outsource your digital strategy to an agency will save you from staff issues. Once you do it, you will not need to worry about staff leaving or the gaps in delivery. To put it in clear words, it will then be your agency’s problem to deal with.

Up-to-date Industry Knowledge

As an in-marketer, it is nearly impossible to keep an eye on the latest news, trends, and updates occurring in the technology and marketing industry around you. To put it in simpler words, there is simply not enough time for one person to keep on top of it all. As unfortunate as it can get, this can lead to you missing out on the development of markets and changes happening to your target audiences. Grabbing hold of all this can really overturn your entire marketing strategy and put it on the fast track to success. Digital marketing agencies make it their business to keep all the rapidly pulsing news and trends at their fingertips, so that gain could be achieved from them right at the moment, without any delays. Moreover, their job also includes deciding on which platforms and tools are worth your investment and reporting them on the basis desired by the client through graphs and analytics.

Easily Implement Big Changes

Having a digital agency of your size makes it much easier to implement big changes like rebranding your entire website, implementing an automation platform, or simply a new product launch. While it can be your first time trying something new, remember that a digital agency is an old hand and they are in a better position to implement what you have in your mind and throw a knowledgeable insight on the idea.

Count on On-going Optimization

Since one of the duties of any digital agency is to justify the investment on a continuous basis and keep amending goals, they are always and genuinely interested in improving their efforts so that the results will reflect what their clients desire from them. Outsourcing your digital strategy means there are fewer risks involved of stagnation or neglect in the quality of deliverables.

Final Word

The best digital agencies in the USA practice what they preach! Outsourcing your project to an agency works for businesses in the above-mentioned ways and also in myriad other dimensions, all of which are going to benefit you. Not only are the ones mentioned above going to be an eye-opener for you if you are among those who are shying away from outsourcing to a digital agency, but also going to change the picture of a professional digital agency that resides in your mind until today.