Project outsourcing and staff augmentation are two widespread management models that are gaining more and more popular among companies engaged in or in need of software development. These two models not only help companies accelerate development and optimize staffing costs but also leverage the invaluable expertise of IT professionals across the globe.
Not sure which approach to take? Or have you already made your choice, but need to understand everything about a particular business model, including its advantages and losses? Below you will find answers to the main questions concerning the presented management technologies.
Are staff augmentation and project outsourcing the same thing?
Many people mistakenly believe that these are interchangeable terms. This is most likely a common misconception due to the fact that both methods include the procedure of assigning client-specific work to freelancers. Moreover, some people consider outstaffing to be a subtype of the outsourcing firm. To avoid ambiguity, it is right to consider each management method separately and in comparison with one another. Let’s begin with the definitions of each model.
The essence of outsourcing?
The word “outsourcing” appeared in the Western business circulation in the 80s of the last century, and it derives from the English expression “outside resourcing”, which literally can be translated as “external resources” or “external source”. Externalization is the practice of transferring certain tasks and functions by a customer firm to a contractor one, for instance, devox software, that particularizes in the relevant field. In other words, you involve employees from some other team and delegate certain tasks to them. If we take the field of IT, such work can be creating a mobile or web application, creating a product design, developing software, etc.
Pros and cons of outsourcing
Outsourcing certainly has a huge number of advantages, but don’t forget about the disadvantages.
Pros:
- Reduced costs. It is generally cheaper to outsource a freelance engineering group than to find and hire fully employed staff.
- Access to more qualified professionals. When subcontracting, you are not limited in your choice, as you can engage specialists with a set of unique skills around the world.
- Less effort spent finding, hiring, and managing employees.
- Quick start of work.
Cons:
- Communication problems.
- Risk of leakage of important data.
What is staff augmentation?
Outstaffing is one of the remote employment options, in which the team performing the entire required range of tasks of the customer firm is legally a different agency. The last one acts as an employer, which means it is in charge of the payments, rewards, and equipment provided to the worker, while the consumer issues duties and assignments to the staff.
Pros and cons of outstaffing
As with outsourcing, outstaffing has a number of advantages and disadvantages that you should be aware of. Here are the main ones:
Pros:
- Elimination of labor disputes.
- No need to deal with all financial issues.
- Reduced costs.
Minuses:
- Communication problems. Problems may arise associated with a misunderstanding of certain tasks. Therefore, it is very important to set up and maintain communication channels that are convenient for both parties.
- Great responsibility.
More useful information can be found on https://devoxsoftware.com/blog/it-staff-augmentation-guide/.
Outsourcing versus outstaffing: which model to choose?
Any company needs good specialists, but not everyone has all the necessary capabilities and resources to recruit and maintain a huge team of workers. That is why many companies use external services. The choice of the model largely is based on the initial needs, goals, and capabilities of your business.
If you have already set up some IT processes and have everything that is required to manage and work with a remote team, feel free to choose staff augmentation. However, do not forget that each case is unique, so we recommend that you first consult with specialists.
