Staff Augmentation or Project Outsourcing?

Directors and managers always deal with the same dilemma: “How should we approach this new project?”

Should we use staff augmentation or project outsourcing? They are continually dealing with project deadlines and working under a budget. Depending on your business model and infrastructure, you may need to resort to outsourcing. We want to focus on what we know are the most common solutions in the field for this challenge: Project Outsourcing and Staff Augmentation.

Both of these options can quickly provide quality professionals and get your project finished within the given timeframe. However, several times the question is not what to do, but Which one to choose? So in this article, we break down the pros and cons of Staff Augmentation or Project Outsourcing, so you can have more information to make a better decision the next time.

Benefits of Staff Augmentation

Control: Software development projects are very time-sensitive and can turn into a real pain if they don’t have the proper management. Staff Augmentation allows a company to fully manage the remote resources because they are part of your team.
Integration: Staff Augmentation helps align new resources with existing business processes. In layman terms, it’s just like having a virtual assistant, someone that will know the inside and outside of the project while is working hand to hand with the other team members.
Expertise: When there’s a gap of skills in your team, Staff Augmentation can reduce or eliminate that gap, with the right talent at an affordable cost.
Leverage your resources: Adding new skill sets to your current staff will only leverage the productivity.
Reduce the cost of acquiring skills: Avoid the costs (time and budget) of internal skills development.
Meet your deadlines: Add one or two additional members to help you stay inside the project’s timeline. Nearshore IT Staffing is usually the best option for temporary work.
The internal peace of mind: Existing employees are less likely to feel threatened by staff augmentation. In comparison with project outsourcing, they will feel they can keep their current role, rather than feel they can lose their job at any time if they are left behind in performance by the outsourced team.

Cons of Staff Augmentation

Relying on internal processes: Augmented staff depends on a company’s internal project management and internal processes. Many times these can have flaws and affect negatively instead of experiencing a positive impact.
Management overhead: For small companies and startups, adding resources through staff augmentation will increase management overhead.
It’s all about resources: Using a Staff Augmentation firm will help a company in delivering the results, no doubt about that. But the responsibility for these results lies within the company. Businesses are purchasing resources, not the final results. Companies remain responsible for planning and managing the project, tasks, developers, and deliverables.

IT Project Outsourcing allows a business to start and execute entire projects or just part of the tasks using the resources from another company. Usually, from overseas countries.

When companies rely on fully outsourced projects, that means the outside company will manage their staff, and they will be responsible for providing updates and delivering the results. Everything will have to be clear and briefed before starting the project to ensure the project’s success.

Benefits of Project Outsourcing

Minimize training costs: Skill development and training are the sole responsibility of the outsourced team. In any case, you are hiring professional resources that should already meet the requirements of your project.
Reduce management overhead: Management is the responsibility of the vendor.
Results Matters. The outsourced firm is responsible for delivering results, which is the base of the agreements.
Overcomes lack of skills and capabilities: Companies can make up for their lack of internal capabilities to complete specific projects. Startups or companies with no IT department can benefit from Project Outsourcing as long as the company meets the results previously agreed.
Keep Focus: By outsourcing the project, you can focus on the core aspects of your business.

Cons of Project Outsourcing

Less control: Overall, management relies on the outsourced company. From individual resources to high-level processes such as quality assurance.
Quality: Finding a reliable Outsourcing IT firm is one if not the mayor odds against this solution. Many companies have a bitter experience with Offshore IT firms when they are looking to meet a need that is beyond their expertise. In the case of underachieved results, the hiring company has legal liability.
Internal Conflicts: Some In-house teams may feel threatened by outsourced IT firms due to affordable prices.
Integration: Companies may find it challenging to integrate the outsourced firm into their internal processes.

Choosing the right model to work with can be a challenging experience and quite a complicated decision. What works well with one company is a disaster for others. It all comes down to know what your needs are and work from there. No matter what solution you choose, you need to do the appropriate research for either one. You need to know if the company you are about to hire has already worked with similar projects, what results have they deliver, and if their past customers were satisfied.

Communication plays a significant role in any case, so be sure to be clear and communicate what your goals are, and what you are expecting from them in terms of a business relationship.

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Mike Hernandez

Chief Operating Officer at Parallel Staff, Inc.

Miguel has proven experience in the IT area both from the research and development standpoint and from providing high-quality IT Nearshore Technology services. Since 2012 Miguel began to explore the entrepreneur arena. In 2019, he joined ParallelStaff to expand the Nearshoring business.

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