Outsourcing or Staff Augmentation? Discover the Smartest Solution for Your Software Needs
In today’s digital age, software challenges affect businesses of all types and sizes. Whether your company is tech-related or not, heavy workloads, tight deadlines, and a shortage of expertise are common problems across several industries. As your business grows, you will probably need more resources to meet your demands. Budget constraints and specific expertise requirements often make it difficult to scale your team quickly while ensuring you get the right people on board.
Outsourcing and staff augmentation are two popular approaches to boost your team’s productivity, address expertise gaps, and reduce costs. Choosing the right strategy in IT can sometimes feel overwhelming. As experts in the field, we believe that a deeper understanding of both strategies and a close look at their potential applications will help you cut through the confusion and find the perfect solution for your business.
Outsourcing practices are rooted in the early 20th century and started to gain more traction in the 1990s when the advances in technology made it easier to work with remote teams worldwide. Outsourcing and staff augmentation are currently used in several enterprises across different business functions, such as customer service, operations, accounting, logistics, sales, and software development. However, these terms are frequently interchanged, making it hard to choose the best option for your project’s needs.
So what’s the difference? Staff augmentation is not a model per se but a form of outsourcing. We can think of outsourcing as hiring an independent full-service pit crew for your project, while staff augmentation would be more like adding jet fuel to your team.
In IT, project outsourcing offers you the possibility to hire software development services from an external vendor, allowing your business to offload entire IT projects to a qualified software development provider. It can help your business save time and money by delegating tasks to external dev pros who can complete the projects more efficiently while your in-house team focuses on their principal functions and responsibilities.
Wondering if traditional outsourcing is right for your project? These top 4 case scenarios might help you decide:
- Tight budget: Consider a mid-size company that needs to build a custom software solution to improve business processes, but has a limited budget. As CEO, you explored the possibility of building an in-house team for the project, but you know the cost of hiring, training, and maintaining a team is too elevated. You've also considered buying an off-the-shelf solution, but you know that it won't meet all of your specific requirements. By turning to project outsourcing you can get the software solution you need at a fraction of the cost. You can pay the external team for the specific project, and you won't have to worry about the ongoing costs of maintaining an internal team.
- Non-existent IT department: Let's say you're a small business owner with limited technical expertise who wants to build a platform to support your growing business. You can’t do it yourself, but recruiting an IT team takes way too much sweat and cash. Outsourcing the project sounds like a fantastic idea in this case.
- Limited resources: Picture this example. Your internal team is working on several projects, but the workload is getting too heavy to handle. You don't have the resources to develop everything, and your deadlines are getting closer. Outsourcing some projects to an external provider will definitely save your day!
- Lack of expertise: Imagine you're developing a new project in JAVA, and suddenly you need to build another project using a different technology or language your team doesn't handle. You don't have the time or resources to train your team, and to make matters worse, you won't be using that technology that much in the future. This is a perfect case scenario to hire an external outsourcing provider to fill in the expertise gap and get the job done!
The outsourcing variation known as staff augmentation, allows you to partner with an IT software development provider and hire their employees to scale up your workforce and improve your company’s expertise. Depending on the requirements of your business and projects, you can opt to hire the service in the short or long term. Two of the most significant differences between project outsourcing and staff augmentation are the level of control that your company retains over the project and the expertise developers can bring to a team.
Even though you will follow up on the project's advances when opting for a traditional outsourcing approach, the external vendor will be in charge of managing tasks and supervising their workforce. In contrast, when augmenting your staff, you will manage employees’ chores and priorities, while benefiting from having additional talent in your team. This approach allows you to access top skills and expertise that your in-house developers can benefit from. The external employees will blend into your team and adhere to the project manager’s instructions and procedures.
Determining the degree of control and software expertise the project requires can give you a clue on whether to opt for outsourcing or staff augmentation. To help you decide, ask yourself some key questions:
- How closely do I need to monitor this project? Is it necessary to supervise every step, or can I trust the outsourcing partner to deliver a high-quality outcome without my direct management?
- Will my business benefit from the expertise that the developers bring to the team in the long run, or is their skill set required only for a one-time project?
- Do I need extra help with the ongoing projects I am currently managing?
By taking the time to consider these questions, you can determine the most effective approach to the project and achieve better results. If your team can benefit from the talent and the project requires your direct management, staff augmentation would be the better choice. Otherwise, you can consider outsourcing the project.
Based on our experience, these are the top 4 case scenarios for staff augmentation:
- Scaling IT workforce: Imagine you are the CEO of a fast-growing Tech company that has recently secured large contracts. Your team is struggling to develop and maintain multiple software products and modules. Recruiting new employees would be too expensive and time-consuming. By partnering with an external vendor, you won't need to worry about the time-consuming tasks and processes of recruitment, onboarding, training, insurance, employee termination, overhead costs, and other associated nuisances. A reputable partner like SoftEdge Technologies substitutes software developers in case of sick leaves, eliminates the need to cover for absences with other staff members, and helps you avoid unexpected delays on your projects.
- Short-term project requirements: Assume you are the CEO of a new business that has recently received funds to develop a new product. Although your in-house team has the required expertise, they are busy working on other projects, and you need to speed up the development process. Choosing to augment your staff temporarily is a wise decision. The external devs will work closely with your internal team to meet deadlines and deliver the project on schedule. By adopting staff augmentation, you will benefit from the additional resources while keeping complete control of the project without outsourcing it entirely to a third party.
- Skills gap: Picture yourself as the HR manager of a non-tech enterprise that wants to create a web platform to automate its internal processes. Your company's IT team is small and lacks the expertise to handle the project. After discussing the situation with the CEO, you realize the IT team would benefit from learning the specific skills required for the project. In this scenario, the most effective strategy is staff augmentation because it enables the internal team to work collaboratively with external experts. The internal-house team can acquire new skills, enhance their knowledge, and gain valuable experience that can be applied to future projects. In this case, staff augmentation offers the business an effective solution to achieve its purpose while promoting the growth of its in-house team.
- Seasonal Workloads: Suppose you are the IT director for a sports streaming service that experiences a sharp increase in demand during world cups. Your team is in charge of preserving the performance of the web platform, safeguarding streaming quality, and addressing any technical difficulties that may arise during the event. However, your internal IT team's workload is unbearable during this period, and you must scale up quickly to meet the demand. The best solution is staff augmentation because it enables you to bring in external IT staff with the necessary skills to handle the additional burden. This way, you can maintain website functionality, guarantee streaming quality, and quickly resolve technical difficulties without overburdening your staff.
Whether you're facing short-term challenges or long-term growth goals, outsourcing and staff augmentation can help you get there faster and more efficiently. While this article can offer helpful insights to help you choose the best approach for your project, we know this process can be challenging. If you need assistance, our team of experts is happy to offer you tailored advice to suit your software solution needs.
When selecting a service provider, it is crucial to consider at least three main factors: a proven track record of success, strong communication skills, and high level of responsiveness. While these are not the only factors that define a reliable partner, they are not negotiable, as they are essential for ensuring that your project runs
smoothly while meeting and exceeding your expectations. A reliable partner which is located in a similar time range to the US and speaks fluent English, like SoftEdge, is definitely a big plus. We will always take care of all the project’s details, including absence leaves replacements, billing models, and expected deadlines, among others.
Finding an ideal software partner can be difficult, but once you find your match, your organization will thrive with a quick workforce scale-up, improved quality and no skills gaps. Wait no longer. Leap to the future with our cutting-edge software solutions!