It is a general practice in the business world to fill the talent gap with either staff augmentation or project outsourcing. People often use the two models interchangeably, but they are different as day and night. Both the approaches provide and assist your development teams with sufficient resources in managing a project. Expanding the talent pool by bringing outside help is a multipurpose approach.
Sometimes the staff is:
- Overworked
- Not equipped with the expertise for a particular project
- Behind schedule, etc.
Both the terms serve the same purpose and follow the same principle of hiring external help for IT services. However, if noticed, there are many essential distinctions between the two models.
Let’s compare each to decide what suits you the best.
Staff Augmentation
It is a staff-increasing practice that involves most businesses encompassing engineers. These engineers are available for external hiring, primarily for;
Time and materials contract
Key characteristics:
- Scalability
- The third-party specialists are added to the premises of the outsourcer for the time of the project.
- The process is itself scalable, and one can access talent on-demand.
- The outside vendors only lend help to handle certain parts of the project. They can join your project at any phase.
- Competitive advantage
- It temporarily boosts the engineering team’s number with sufficient talent to hold onto one’s competitive advantage.
- Cost
- Team augmentation helps in reducing recruitment, payroll, and project costs.
- Resource augmentation enhances operational efficiency.
- Work dynamics
- It opens up more opportunities and room for cohesion and collaboration. The temporary staff can relate first-hand to the in-house resources.
- Control
- The management can still maintain control over supplementary resources.
- Deploying outside help does not mean you are no longer responsible for a project. You still have to look out for quality controls and the development process.
- Geographical limitations
- There is absolutely no geographical limitation in having additional hands from other countries to assist you with any part of the project.
IT Outsourcing:
It involves hiring external consultants and handing them full responsibility for the entire project. The outcomes are usually pre-arranged. The third-party agencies take complete control of certain aspects of the business operations.
Both the parties operate on mutual trust and respect to ensure a productive partnership.
There are three types of IT outsourcing services approaches:
- Onshore – Hiring resources from your own country
- Offshore – Hiring help from somewhere outside your country.
- Nearshore – Getting help from neighboring countries.
Key Characteristics
Scalability
- The additional help is suitable for long and short-term objectives but does not entertain unexpected or surprise projects so much.
- While resource augmentation means seeking help at any given phase or point, it is ultimately handing over the project from A to B.
- The projects are not handled with engineering support, unlike staff augmentation.
Cost
- The cost associated with hiring external vendors is higher than team augmentation. The outsourcing company is responsible for hiring help. They fund the project by training and managing the lot for the desired task.
Work dynamics
- Since the management is independent, the external team does not blend in with the in-house resources. Both the teams operate independently and handle their domains. The separately trained team of experts will not interfere with the core functions of your company.
Geographical limitations
- There are three models under which outsourcing operates — onshore, offshore, and nearshore.
- The staff augmentation model does not follow any definite demarcation.
Control
- The practice is a bit challenging because it makes you give up most of the control. Lesser control of your projects means no quality control and management. The workflow is entirely at the disposal of hired help.
Onboarding process
- A detailed onboarding process for hiring help involves thorough research, pre-determined deliverables, and milestones.
- There is a legal agreement between the outsourcing company and the client before the commencement of the project.
Which is the ideal approach for hiring external consultants?
After going through the key characteristics of each model, you must be confused regarding which approach to take.
The main challenge lies with finding the right vendor for your project rather than the scope of your project solely. The vendor qualities play a significant role in determining how to go about the project. The factors helpful in identifying the models are:
- Abilities and capabilities of each prospect
- Experience
- Industry knowledge
- The outcome of the project
- Level of control you want to leverage
- Budget constraints (if you have any)
If what is staff augmentation is your go-to tool then you want a flexible solution and outside expertise whenever needed. It will integrate and blend in with your existing team for the desired duration. With team augmentation, integration and collaboration are foremost for a smooth workflow.
Whereas if you do not mind giving up control to another entity, the outsourcing model is apt for you. You will not have desired communication with the external vendors, but it will help you prioritize other core functions. Even the quality will not be in your hands, but the process is about trusting the experts.
At the end of the day, perhaps a hybrid model may work best for you, but the essence of the matter is always a fruitful outcome.