Staff Augmentation vs Outsourcing vs Hybrid Approach: A Detailed Comparison
IT companies must deliver projects on time with quality. However, the needs in software development are ever-changing. As a result, it becomes impossible for one company to possess all the skill sets needed to deliver challenging projects. This is where the three IT models become important, namely-
- Staff augmentation
- IT outsourcing services
- Hybrid approach
Is one model better than the other? What motivates companies to choose one over the other? Let us discuss.
Staff augmentation is when a company hires external personnel temporarily to augment its capacity. Such a company may hire people from other companies offering staff augmentation services for fulfilling its requirement.
Some common reasons why company choose augment staffing are:
- Companies may need specialized skills such as brand and logo design technology or facilities.
- Sudden spikes in customer demand, increased production, seasonal businesses, etc, lead to a higher demand for staffing.
- As a bridge to hire capacity while they hire a permanent team for long- term needs.
- A change in strategy in terms of core skills or projects with faster time to market leads to staff augmentation.
Benefits of Staff Augmentation
- People, hired from staff augmentation services, can be easily blended into internal teams.
- A good way to hire future long-term employees based on performance.
- Staff can be hired based on per-project; saves cost and time
- Companies can increase decrease staff based on their needs
Limitations of Staff Augmentation
- Not recommended for projects that need a contextual or deep institutional knowledge
- Augmentation is always third-party dependent
- In case of long-term on ongoing projects, it may be not suitable
IT Outsourcing Services
When companies need to execute a whole IT project by using the resources of an IT outsource company, it’s called project outsourcing.
This is a more specialized form of cost-effective staffing because it limits the hiring to just getting the job done by a specialized set of professionals. You may focus on their core operations while hiring the skills or expertise of professionals hired through outsourcing.
When do companies need IT Outsourcing exactly?
- When they want their in-house employees for other productive tasks
- Sometimes, IT support outsourcing is needed to accelerate time-consuming business processes
- When they want access to skills that are not available as per the need locally
- When they want to give away the responsibility and related risks to a third-party vendor by delegating a part of non-focus functionality
Benefits of IT Outsourcing:
There are many benefits of IT outsourcing services. Some of them are:
- Overall cost reduction and better ROI
- An outsourced IT company saves time invested in recruiting and training in-house team member
- Access to a global pool of talent
- IT outsource services make way for onboarding new domains and clients.
Limitations of IT Outsourcing
- An overseas IT outsourcing company may have significant time differences that may affect progress.
- Language and cultural barriers
- Different work habits
Many times, IT staff augmentation and project outsourcing are blended in a way so as to meet the specific needs of the project within a company. A hybrid approach combines the benefits of IT staff augmentation and IT outsourcing.
Benefits of Hybrid Model
- Access to a pool of global talent that can be increased or decreased depending on niche projects
- Full predictability of recurring costs
- Unlike offshore outsourcing, no need to extend office space
- You get the best of both worlds in no extra cost
Limitations of Hybrid Model
- May require an additional position of a project manager to manage all the teams
- Costing may turn out to be fluctuating that may affect staffing budgets
Outsourcing in general has helped several businesses post-pandemic. Software and application development requires an updated talent pool — a factor that may not be possible with remote working. As a result, a combination of IT outsourcing and staff augmentation is the future.
If you are looking to adopt a hybrid model, or need staff augmentation services or IT outsourcing, feel free to contact us.