Staff Augmentation vs. IT Outsourcing: Which Is Better?
20 Feb
Several businesses are confused about whether to use staff augmentationor IT outsourcing services. In fact, some people don’t even understand the difference between these two options, which puts them in a dilemma about what to use and what not to use. To help you choose the right option for your business, we have created this comparison blog post.
Outsourcing IT services to the top web development company or a technology company depending on the business needs has been a common practice. Enterprises and businesses don’t need to hire web developers. Rather, they just outsource their development or technology requirements to a web app development company or a mobile app development company. In the recent past, a new phenomenon of staff augmentation has come into existence.
Criteria | Staff Augmentation | IT Outsourcing |
Definition | It is a process of adding skilled team members to your team to fill in the talent gap in your company to fulfill your business and project needs. | It is the process of outsourcing the whole project to a company that will handle development and delivery or meet the requirement. |
Process | It is more like a hire resource model. The company or consultant looks for a company with vetted resources to add to their existing team or to build a completely new team. This team will be managed by the client company as the company will own the process, people, and project. | It is more like a requirement based development model used for building software, mobile apps, or similar technology products. It is a requirement based development process that is handled by a development company. The team will be managed by the web development company as the main deliverable is the software product. The people and process will be managed and defined by the development company. |
Responsibilities | The responsibility of leading the team, assigning tasks, delegating jobs, etc. would be of the hiring company because they have hired the resources. Of course, the hired resources would give suggestions and take responsibility, but the final decision would be of the hiring company. | The responsibility of leading the team, defining development scope, delegating tasks, etc. would be of the web or mobile app development company as the development company is responsible for handling deadlines and deliverables along with the quality. |
Cost | The cost would be applied based on the resources. It is usually an hourly cost for each resource hired by the hiring company. | The cost would be a fixed cost to complete the project of a predefined scope. Usually, this cost is estimated based on the total efforts or hours the team would put in, but the project cost does not change until the scope of work changes even if the web app development company ends up taking more time or putting more web developers in completing the scope of development. |
Flexibility | It is one of the most flexible models. When you hire web developers or mobile app developers, you can change the scope or define the scope of development based on your requirement. It is perfect for the projects that can have variable scope or it may change depending on the requirement of the project or market dynamics. | It is not that flexible as the scope of work for developing a mobile app or software solution like a calling card system has to be fixed because based on that the cost is defined for development. Any change in the scope of work may revise the total cost of development. |
Scalability | This is the most scalable model as you can add or remove web or mobile app developers as and when needed depending on your project needs. For example, if you want to add more web developers, you can easily do that to meet your deadlines or to shorten the time to market. | This is not that scalable model as you do not have flexibility to add or remove members. To reduce the timeline to meet the changed deadline, a hiring business may need to pay additional to get priority services otherwise the deadline would be defined at the time of scope finalization and less likely to get changed. |
Transparency | This model is more transparent because clients would stay in the direct touch of team members and can also have daily update meetings or calls. | This model is also transparent, but the level of transparency might be lower than staff augmentation services. Clients don't get an opportunity to directly communicate with all team members. Usually, a SPOC (Single Point of Contact) is assigned to give updates who give weekly or monthly updates on the progress. |
Management | Time and cost related to managing resources would be higher compared to outsourcing an IT project to a development company. Of course, you don’t need to invest as much as you do in investing in managing an in-house team. | The cost of management is quite negligible because everything is managed by the company offering you web and mobile app development services. You will not need to directly or indirectly manage any IT resources. |
Concluding notes
Both outsourcing and team extension models have their own pros and cons. The staff augmentation service is definitely more popular among businesses worldwide as it has more flexibility, control, and returns to offer compared to its alternate model. However, depending on certain factors anyone of the models can be selected between hiring a resource or fixed cost development.
We provide both staff augmentation and outsourcing services to our customers overseas. You can take advantage of any of these models to meet your business needs. We can also help you choose the best option depending on your project requirements in a free consultation call. Let’s connect for further discussion.
