IT Staff Augmentation vs. Outsourcing: An Overview

First, it's essential to grasp the core principles of IT Staff Augmentation vs. Outsourcing.

What Does IT Staff Augmentation Mean?

Staff augmentation is a type of outsourcing model that uses temporary workers to fill short-term job positions within your company.

For instance, imagine a gaming company with a development team of 4 members. When the business gets closer to launching a project, they understand they need 7 developers to meet the deadline. For the scaling software development team, they hire three more developers from an IT staff augmentation service provider.

Why do you need IT staff augmentation?

Companies often choose IT staff development services to solve recruitment problems quickly and effectively. Instead of spending a lot of time and effort on recruiting, interviewing, and training new employees, companies can quickly access a team of experienced and highly skilled programmers. This helps save a significant amount of time and resources for the business.

Another benefit of IT staffing services is that they help companies access a rich source of talent with specialized skills. Companies providing this service often have a team of programmers who are well-trained and constantly updated with the latest technologies. As a result, businesses can easily find candidates who meet job requirements and improve the technical capacity of the current software development team.

We have compiled its pros and cons to help you better identify the right call for your organization.

What is IT outsourcing?

Outsourcing is another model where a company partners with a third-party provider to handle a specific project or function. 

To put it simply, Outsourcing is a business practice to hire dedicated developme​nt teams from established software development vendors to work on your project for a set duration.

Consider reading: Hire Dedicated Developers: The Ideal Solution for CTOs in the Digital Age

Why do you need IT Outsourcing?

Outsourcing IT services helps companies significantly reduce costs. Instead of having to pay for initial investments, facilities, and personnel costs, businesses only need to pay for the services they use. This helps minimize financial risks and provides more flexibility in budget management. In fact, according to surveys conducted by 59% of organizations, cost-cutting measures are used to implement their preference for outsourcing.

Second, outsourcing IT opens up opportunities for businesses to access a high-quality and diverse workforce. IT service providers frequently employ a staff of professionals with rich backgrounds, specialized knowledge, and up-to-date knowledge of the newest technological advancements. Zippia also shows that 26% of small businesses outsource to get benefits from the top 1% of talent.

Most importantly, we can eventually improve service quality and CX rates by utilizing the capabilities of reputable software development outsourcing services providers, which will result in appealing revenue growth.

Finding out how Staff Augmentation vs. Outsourcing differ in the IT industry

Although these two models might seem alike and are often mixed up, they actually differ a lot in terms of control and responsibility for the company hiring the service.

To help CTOs and business owners make the right choice, we've put together this detailed comparison of the two approaches. We'll break down the differences and help you choose the best staffing solution that aligns with your business goals!

Ownership

Staff Augmentation: Your in-house team retains ownership of projects and tasks.

Outsourcing: An IT outsourcing service provider takes complete responsibility for projects.

Purpose

Staff Augmentation: To fill the specific talent gap temporarily.

Outsourcing: To proceed with projects on which a company doesn’t want to hire in-house development talents.

Control

Staff Augmentation: Direct control over the augmented staff.

Less direct control when using outsourcing because the service provider handles employee management.

Cost

Staff Augmentation: Transparent cost structure, generally based on an hourly working model.

Outsourcing: Fixed, often long-term contract cost models.

Risk

Staff Augmentation: Contains lower risk as your in-house team manages the project.

Outsourcing: Contains a bit of high risk because of the outsourcing service provider's accountability.

Innovation

Staff Augmentation: Encourages innovation through in-house collaboration.

Outsourcing: Innovation might depend on the provider’s approach.

Timeline

Staff Augmentation: Quick project initiation due to readily available staff.

Outsourcing: It might take a bit longer setup time.

Communication

Staff Augmentation: Direct communication with team members.

Outsourcing: Communication via liaison or managers.

Project Focus

Staff Augmentation: Your hired teams have complete attention on the project.

Outsourcing: Service providers might manage multiple clients simultaneously.

Confidentiality

Staff Augmentation: Easy to maintain data confidentiality.

Outsourcing: Potential data security concerns with the outsourcing service provider.

Long-term Strategy

Staff Augmentation: Suitable for short-term projects.

Outsourcing: Suitable for long-term partnerships.

Which approach is best for your business, IT Staff Augmentation vs. Outsourcing?

Deciding between Staff Augmentation and Outsourcing is crucial for your project’s success. The right choice depends on your company’s goals and specific needs, as each model has distinct advantages suited to different situations.

Staff Augmentation is ideal for businesses needing to quickly scale their team for short-term projects or high-demand phases. This model works well if you want to retain close control over the project and integrate new team members into your company’s culture. 

Ask yourself:

• Is your company facing a temporary shortage of talent in a specific area?
• Do you want to enhance your team’s technical capabilities?
• Is it important for your project to maintain consistency in work processes and culture?

Outsourcing, on the other hand, is preferred when businesses want to focus on core activities, reduce costs related to infrastructure and personnel, or tap into expert skills for specialized tasks. This option provides flexibility in adjusting the project’s size and scope.

Consider:

• Do you want to minimize costs associated with recruitment, training, and HR management?
• Do you need access to cutting-edge technologies and industry solutions?
• Would you prefer to concentrate on activities that drive your business’s core value?
• By reflecting on these questions and evaluating your needs, you can choose the model that best aligns with your business objectives.​

Final Sayings

Choosing between IT Staff Augmentation vs. Outsourcing is no easy task. It is difficult to distinguish whether Staff Augmentation is better than Outsourcing. After reading this article, we hope you've gained valuable insights to help you make an informed decision that aligns with your business goals.

Now, let’s explore the factors and find the ideal solution to ensure success in your IT projects. 

With BHSoft, you can hire software developers with over 10 years of experience to help you bring your project to life. Being a top software development company in Vietnam, we are committed to giving you access to a knowledgeable and trustworthy group of IT professionals.

Feel free to contact us for more information!