Staff Augmentation vs Project Outsourcing: Which is the Best Choice?

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!