Staff Augmentation vs. Project Outsourcing — A Comparison
Every IT company in the world is on the quest to be the best. But they have to face several challenges along the way:
· Deliver projects on time
· Reduce operational costs
· Improve efficiency through technological brilliance
· Stay within the budget
· Cater to the ever-changing and ever-evolving IT requirements
These are some of the signs that show that your project needs a dedicated development team. The answer lies in:
IT Staff Augmentation or Project Outsourcing (also called Managed services or Out-tasking)
If you run an IT company, you need to decide which one of the above is good for you.
In this article, we will first discuss Staff Augmentation and Project Outsourcing and then compare the two, at the end of which you can decide which approach to choose for your requirements.
In Staff Augmentation, you bring qualified and skilled workers from an agency that provides you with staff.
They will work alongside your own internal staff throughout the duration of the project. Their work is on contract basis, either in your brick and mortar office or from their own home/office.
What’s Good About It?
Staff Augmentation has some important benefits. Naturally, you can save on training the present staff, because you bring in skilled people from outside.
· You don’t have to take any liabilities concerning these employees.
· You don’t have to pay bonuses, health insurance or any other expenses.
· You can increase/decrease the size of the staff as per your requirements.
· Your own staff will not feel threatened because (they) are not permanent.
· Augmented staff is flexible, so you can adapt them to your business conditions.
A Few Things You May Not Like About Staff Augmentation
· You may still need to train them to align them with the company’s processes, domain information and other tools.
· The management must be capable enough to manage the overhead and the growing resources that may arise.
· The company must communicate their needs, failing which the temporary team may have trouble following the requirements, leading to failure; and the extra effort might go wasted.
In Project Outsourcing, your company hires a team of people from another firm. They will be with you during the duration of the project. The team will be managed by the outsourcer, with the specific tasks that they have to do explained in a detail manner.
Here, the outsourcer is responsible for the skill of the team. Your company will not be directly involved in the work process because you will be handling it through the outsourcer.
What You Would Love About It
· You don’t have to spend time, money and resources on training or managing the workers.
· The outsourcer will be responsible for assigning you a team that knows their tasks well.
· You can ramp up the team or downsize it anytime you need.
· There is practically no contractor vs. employee scenario here.
· You can negotiate large contracts with the negotiator because they will manage their own economies of scale.
What You May Not Like About Project Outsourcing
· The control of everything is in the outsourcer’s hands.
· Your regular staff may show some resistance as they feel threatened by the new team.
· Finding a good and competent outsourcer is a challenge.
· Integrating the team with the internal process may be a tough nut to crack.
Now let’s observe the areas that have key differences
1. The End Results
With a Staff Augmentation team, the idea is to get a skilled team to work in tangent with your internal staff.
Your aim: Of bringing in more skilled resources will work.
With Project Outsourcing, the idea is to hire external teams to get a specific work done. You will have to explain your needs to the outsourcer and trust that they will be met fully.
Your aim: Of achieving desired results will work.
2. Gaining Control — Whether It Will Be Realized or Not
With Staff Augmentation, you will have to train the new team. They collaborate with your permanent staff and follow the company rules and processes.
Your aim: Of gaining control over the team is realized
With Project Outsourcing, the team will work outside the office, most of the time. They don’t have to come to your office, while collaboration with the internal staff will be minimal or managed through the outsourcer. The outsourcer will be the link here. He/she will convey the guidelines and review points of the project.
Your aim: Of gaining complete control or direct supervision is not realized.
3. The Range of Responsibility
When the Staff Augmentation team comes into your office, you will have to impart a certain level of training to them. This way you can ensure that they have the skills required for the project, so there is absolutely no compromise in quality.
Your aim: Of gaining desired quality is attained here.
In Project Outsourcing, the training is all done by the outsourcer so all your briefing is done (to the vendor), and he/she will deliver a team who will give you exactly what you need. The secret lies in hiring the best vendor.
Your aim: Of reviewing the work done by the team is limited.
4. Project Scalability
There is every chance the project scope will be increased as you go along. In Staff Augmentation, project scalability will lead to bringing in more people and training them. But the good news is that you can leverage new skills and infuse them with existing ones.
Your aim: Of doing work with minimum team members may not work here.
This is more economical in Project Outsourcing because you are paying on the volume of work basis as economies of scale apply here. Increased productivity is almost guaranteed.
Your aim: Of paying per resource will make it more economical.
To make a long story short, it is entirely your call because you have to weigh your options before making the right choice. Or you can try the best of both worlds and make your choice later.
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