Staff Augmentation vs. Project Outsourcing
Around the globe, there’s an increasing drive for businesses to reduce costs and improve operational efficiencies through technological innovation.
Developing in house capabilities to complete this growing number of IT projects can be a costly and risky venture, particularly when the IT needs of an organization are constantly changing. That’s why we’re seeing a consistent rise in businesses leveraging outside services to complete these needs.
When companies look for outside help to complete their IT projects, they are generally considering two delivery models:
- Staff augmentation
- Project outsourcing
IT Staff Augmentation
IT staff augmentation allows a company to add staff to their teams based on the additional skills required to support their initiatives. Resources are employed by the staff augmentation firm. Below, you’ll find some pros and cons to think about before deciding on the staff augmentation route.
Pros
- Control over staff
- Integration with internal processes
- Leverage existing resources
- Specialist expertise
- Flexible for changing needs
- Reduced employer burdens
- Easier internal acceptance
Cons
- May be training intensive
- Relies on internal processes
- Lack of economies of scale
- Increased management overhead
- Resource-centric
- Employee vs. contractor distinction
IT Project Outsourcing
IT project outsourcing allows a company to execute entire projects using the resources of another firm. In some cases, this can also take the form of “out tasking,” where specific tasks of a project might be outsourced to a sub team which is staffed and managed by the outsourcer. Below, you’ll find some pros and cons to think about before deciding on the project outsourcing route.
Pros
- Reduced training costs
- Scalability
- Reduced management overhead
- Results-centric
- Allows for core business focus
- Variable cost structure
- Less legal risk
Cons
- Lack of control
- Potential internal resistance
- Finding a quality outsourcer
- Not as cost-effective for small projects
- Internal process integration issues
A Hybrid Approach
There is no one-size-fits-all approach to success. For some companies, their needs are best met through staff augmentation, others through project outsourcing, and sometimes these needs overlap.
Consider an example of two interdependent projects:
- The first project lies within a company's core competencies, but additional specialists are required to complete the project successfully.
- The second project lies outside of the company's core competencies altogether.
In this case, a hybrid approach may work best, where staff augmentation is used to acquire the required specialists for the first project and project outsourcing is used to complete the second one.
What’s the best delivery model for your business?
Choosing the right delivery model can be a complex decision. Many of the factors covered above may become part of a detailed cost benefit analysis.
While some companies feel comfortable making this decision internally, others may find it helpful to seek out the advice of an IT consulting firm.
Below are some basic guidelines that can help navigate the decision-making process between staff augmentation, project outsourcing, and a hybrid approach.
To Recap
When selecting a vendor, consider working with one which provides both staff augmentation and project outsourcing services. This allows your business to get the best of both worlds, without the increased burden of managing multiple vendor relationships.
Find a vendor you can trust to take the time to understand your business and deliver the desired results, whether you need a single specialist or to outsource an entire project.