Staff Augmentation vs. IT Outsourcing: Which Is Better?

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. 
  
As this model augments existing staff and meets staffing needs, it is called the staff augmentation model. It is also called the hire resource or team extension model.

It is the process of outsourcing the whole project to a company that will handle development and delivery or meet the requirement. 
  
As this model consists of outsourcing the IT project to one of the web development companies in India or any other country to get the predefined goals accomplished, it is called outsourcing. It is also referred to as a fixed cost development model.

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.