Staff Augmentation vs Outsourcing vs Hybrid Approach: A Detailed Comparison

 

 

IT companies must deliver projects on time with quality. However, the needs in software development are ever-changing. As a result, it becomes impossible for one company to possess all the skill sets needed to deliver challenging projects. This is where the three IT models become important, namely-

• Staff augmentation 

• IT outsourcing services 

• Hybrid approach 

Is one model better than the other? What motivates companies to choose one over the other? Let us discuss. 

Staff Augmentation 

Staff augmentation is when a company hires external personnel temporarily to augment its capacity. Such a company may hire people from other companies offering staff augmentation services for fulfilling its requirement. 

Some common reasons why company choose augment staffing are: 

• Companies may need specialized skills such as brand and logo design technology or facilities.

• Sudden spikes in customer demand, increased production, seasonal businesses, etc, lead to a higher demand for staffing. 

• As a bridge to hire capacity while they hire a permanent team for long- term needs.

• A change in strategy in terms of core skills or projects with faster time to market leads to staff augmentation. 

 

Benefits of Staff Augmentation 

• People, hired from staff augmentation services, can be easily blended into internal teams. 

• A good way to hire future long-term employees based on performance.

• Staff can be hired based on per-project; saves cost and time 

• Companies can increase decrease staff based on their needs

Limitations of Staff Augmentation 

• Not recommended for projects that need a contextual or deep institutional knowledge 

• Augmentation is always third-party dependent 

• In case of long-term on ongoing projects, it may be not suitable 

IT Outsourcing Services 

When companies need to execute a whole IT project by using the resources of an IT outsource company, it’s called project outsourcing. 

This is a more specialized form of cost-effective staffing because it limits the hiring to just getting the job done by a specialized set of professionals.  You may focus on their core operations while hiring the skills or expertise of professionals hired through outsourcing. 

When do companies need IT Outsourcing exactly?

• When they want their in-house employees for other productive tasks

• Sometimes, IT support outsourcing is needed to accelerate time-consuming business processes 

• When they want access to skills that are not available as per the need locally

• When they want to give away the responsibility and related risks to a third-party vendor by delegating a part of non-focus functionality 

Benefits of IT Outsourcing:

There are many benefits of IT outsourcing services. Some of them are: 

• Overall cost reduction and better ROI 

• An outsourced IT company saves time invested in recruiting and training in-house team member

• Access to a global pool of talent 

• IT outsource services make way for onboarding new domains and clients. 

Limitations of IT Outsourcing 

• An overseas IT outsourcing company may have significant time differences that may affect progress. 

• Language and cultural barriers 

• Different work habits 

Hybrid Approach 

Many times, IT staff augmentation and project outsourcing are blended in a way so as to meet the specific needs of the project within a company.  A hybrid approach combines the benefits of IT staff augmentation and IT outsourcing. 

Benefits of Hybrid Model 

• Access to a pool of global talent that can be increased or decreased depending on niche projects 

• Full predictability of recurring costs 

• Unlike offshore outsourcing, no need to extend office space 

• You get the best of both worlds in no extra cost 

Limitations of Hybrid Model

• May require an additional position of a project manager to manage all the teams 

• Costing may turn out to be fluctuating that may affect staffing budgets 

Conclusion

Outsourcing in general has helped several businesses post-pandemic.  Software and application development requires an updated talent pool - a factor that may not be possible with remote working. As a result, a combination of IT outsourcing and staff augmentation is the future. 

If you are looking to adopt a hybrid model, or need staff augmentation services or IT outsourcing, feel free to contact us.