IT staff augmentation vs outsourcing: Key differences explained

IT Staff Augmentation vs Outsourcing

One of the most urgent issues that businesses will have to deal with, in the midst of a rapidly evolving digital world, is how to access the proper IT resources without impeding their growth. Firms are turning to external hiring models to fill skilled personnel gaps, scale development teams, and complete projects more quickly.

Some frequently used models include IT staff augmentation and outsourcing. These options differ in how they allow an organization to leverage the knowledge of outside experts. If you select the incorrect model, you may end up experiencing delays, budget overruns, and limited control of your project.

So what can you do to determine which model will work best for you?

Let’s break it down.

What is IT staff augmentation?

IT Staff Augmentation offers companies the ability to utilize independent IT specialists on a temporary or project-by-project basis instead of hiring all of the necessary staff in-house for the project being worked on. As opposed to contracting out a project totally to an outside firm, companies hire subject matter experts (SME) in IT disciplines (such as programmers and system administrators) that augment their current workforce to do their jobs in accordance with their current organizational operational procedures, tools, communication methodologies, and management structure.

The augmented professionals who become part of your workforce through staff augmentation will work as an extension of your internal workforce by working as per your company’s way of doing things. Contrary to traditional contractor relationships, where an organization relinquishes some amount of management to a third-party contractor, your organization will maintain complete control over how to manage the execution of projects and make decisions about the project’s success.

In plain language, IT staff augmentation enables your organization to maintain control of the company while receiving additional capacity and expertise only as necessary.

How IT staff augmentation works

IT staff augmentation works by identifying an organization’s missing resources internally. This occurs when, due to an insufficient number of specialized skill sets, increased workload, time constraints for delivering projects, and/or the need to adopt new technologies rapidly, they are unable to resource internally. Because of this, many organizations choose to utilize augmentation services rather than going through long-term hiring processes and attempt to bring on skilled professionals as needed.

The IT staff augmentation model is not like traditional hiring or outsourcing; instead, it was created for speed, flexibility, and high levels of collaboration to merge external talent into your current team structure.

Here’s a detailed breakdown of how the process typically works:

1. Determine your needs

Defining your needs (beyond just defining a role) is the first step in the process. Identify any required technical skills, the experience you are looking for, the scope of the project, and the anticipated deliverables from the position. Ensuring you have complete clarity around what you want from the very beginning will help ensure you are perfectly aligned when it comes to selecting the right candidate(s). Many organizations also establish KPIs and success criteria during this stage of the process to help evaluate performance and ultimately achieve the expected outcomes.

2. Partner selection

After you’ve determined your requirements, you work with a staff augmentation partner (contractor) to find suitable candidates for your position. The partner will have a pool of pre-vetted professionals that will allow you to hire quickly and effectively. The partner will conduct the initial screening process as well as conduct the technical assessments for you. This will help you move along much more quickly, as well as take some of the burden from your internal HR team so they can focus on selecting the best candidate(s) for your position.

3. Selecting and onboarding

Once companies have identified potential employees, they evaluate the candidates by interviewing them in person, both for technical knowledge and communication ability, in addition to gauging if they will fit into their software development company culture. You have complete control over who gets hired when you do not use an outsourcing method; therefore, once employees are hired, the company must familiarize them with all of the systems in place, such as schedules, tools, processes, and project objectives. Engaging new employees should occur within the organization’s existing systems so they may become productive in a timely fashion.

4. Integrating into the internal team

Augmented staff will be integrated into the company’s “traditional” workforce rather than operating as a separate entity. This means that augmented staff will utilize the same communication channels/system, work collaboratively through project management systems, and contribute to the business’s shared repositories. In addition, augmented staff will have opportunities to collaborate within your team during meetings, including but not limited to “stand-ups,” “sprint planning,” etc., by providing seamless collaboration and alignment to current projects.

5. Ongoing management and performance monitoring

Full control of management for augmented staff remains with your organization. Internal managers will manage tasks while monitoring their progress to finish by deadlines and meet quality standards. Performance will be monitored on an ongoing basis through agile processes, along with the use of agile feedback loops. These tools enable you to make quick decisions and therefore maintain productivity as far as possible during the duration of the project.

6. Scaling and offboarding

There is a high degree of flexibility with respect to the use of IT staff augmentation. You can quickly increase your number of resources when workloads are at their highest and decrease your number of resources when your workload is lower. Also, when you finish a project, it is easy to offboard resources, and there are no long-term obligations associated with the resource. To enable this type of flexibility, there needs to be adequate documentation and knowledge transfer in order to ensure that there is no disruption to continuity processes.

IT staff augmentation vs outsourcing: Key differences explained

Although both of these strategies enable businesses to utilize outside technical expertise, one aspect in which IT staff augmentation and outsourcing are fundamentally different is in regard to control, responsibility, and execution. Understanding how those three elements are affected in each instance is critical for selecting the most appropriate method for your project.

Control and decision-making

One of the biggest differences between using IT staff to augment your organization versus outsourcing is the amount of control you will retain. When you utilize IT staff augmentation, you will have total control over your team and will determine the assignment of tasks, the structure of the work being performed, and how the work should be executed. You will be in charge of all aspects of your team as if they were part of your in-house staff. However, when outsourcing a project, you relinquish almost all aspects of control over how the work will be completed. 

Ownership & accountability

Your company retains ownership of the project when you use staff augmentation. Your staff is responsible for producing outcomes, keeping to a schedule, and executing appropriately. If you use a vendor to provide manpower (outsourcing), the vendor has much of this accountability for completing the project on your behalf. This helps reduce some of the burden on your staff for managing the project; however, it also limits your ability to direct the vendor’s actions.

Flexibility to scale

When considering how to increase or decrease the number of people working on a project as its needs change rapidly, there are many benefits to using staff augmentation. In a continually changing business environment, where one day you’re hiring people to build widgets, and the next day you’re adding employees to fill new roles, staff augmentation is the best option. In contrast, outsourcing is generally governed by a set of contractual obligations, making it significantly harder and longer to increase or alter your staffing level.

Cost structure/budgeting

With staff augmentation, costs are normally dependent on the number of resources and hours worked by a resource, adding a level of granularity to your cost, which works well with long-term or continually evolving projects. In comparison, outsourcing typically has fixed or milestone-based pricing, giving more predictability; however may create extra costs if there are changes or if requirements are extended throughout the project.

Conclusion

The decision between IT staff augmentation and outsourcing ultimately depends upon how your business operates and what your project needs to succeed. While both types of service delivery offer unique benefits, staff augmentation allows greater control and flexibility along with seamless integration of teams; outsourcing allows for convenience, decreased effort from management, and from start-to-finish delivery of products or services.

If being involved in the development and scaling of your team is a priority, then staff augmentation is the best choice. If you want to delegate making things happen and allow more time for your business, then outsourcing should give you a quicker, more structured result.

In today’s increasingly competitive digital world, many companies are increasingly using a hybrid method to meet the demand for both control and efficiency. Partnering with a trusted IT staff augmentation company will further assist you in successfully navigating these methods and developing a long-term strategy that supports your business goals.