Staff Augmentation vs. Project Outsourcing for IT: Pros and Cons

What is staff augmentation?

Staff augmentation involves adding IT professionals to work as temporary members of your in-house team. It’s an ideal solution to fill a skill gap to complete short-term projects or handle workload surges.

Let's consider the pros and cons of this model.

Here are some benefits of augmenting your in-house team with outstaffed professionals:

• Scalable Staff augmentation doesn't require a long-term commitment, allowing you to scale your IT team up or down as needed. It's great for short-term projects and fluctuating workloads.
• Cost-Effective Because you can dismiss augmentation IT professionals after your project is complete, you won't have to keep paying the salaries of underutilized employees. As temporary hires, you also save on paying for benefits, office space, and equipment (in some cases). That's on top of the savings you are already making from working with remote specialists.
• Easier access to specialists. Companies have been grappling with a shortage of specialists with specific IT skills, a crisis expected to account for $5.5 trillion in losses by 2026. Staff augmentation broadens the search for talent by providing easy access to IT specialists abroad.
• Faster time to market. Staff augmentation lets companies tap pre-vetted talent. Because outsourcing companies don't have to start the recruitment process from scratch, you can get your project rolling and to market in less time than if you had to recruit and train staff.

Consider the following drawbacks of staff augmentation:

• Disruptive changes. Adding new members to your internal team may disrupt your team’s dynamic and workflow. You’ll have to devote time and resources to onboarding augmented staff and ensure they understand your company’s culture, communication style, collaboration tools, and tech stack.
• Greater managerial responsibility. Management will have to supervise a mix of in-house and augmented staff, which requires effective coordination to ensure seamless workflows.
• More exposure to security risks. Integrating temporary staff into your internal team means exposing your workflows and private data to security risks. After all, you will have to provide external workers access to your proprietary system. You’ll have to ensure you have protective measures in place, such as NDAs and access tracking.

You need to assess your unique needs to find the best answer to your company's staff augmentation vs. outsourcing question. If staff augmentation is not the right solution, you may want to explore project outsourcing as an alternative.

What is project outsourcing

IT project outsourcing involves hiring an entire team to take on a project or a specific part. The outsourced project team operates independently from your in-house team and usually takes responsibility for managing the project.

Let’s dive into the pros and cons of project outsourcing.

Here are some advantages of going this route, some of which overlap with the benefits of staff augmentation:

• Access to a global talent pool. Project outsourcing makes taping IT professionals with extensive experience in specialized fields easy. For instance, if you need a real estate app, you can find outsourcing firms that provide teams with expertise in that specific area.
• Cost savings. Hiring an outsourced team means you won’t have to provide office space and equipment. It also means you can hire specialists from countries with lower salaries.
• Less disruption to business operations. Outsourcing a project to an external team requires no additional managerial load. You can continue to focus on your core business competencies.
• Increased efficiency. Because the outsourced team is focused solely on your specific project, you can expect fast turnaround times (compared to assigning it to an in-house team handling other projects).

But, project outsourcing has its own set of drawbacks.

Consider the following disadvantages before choosing this hiring model:

• Barriers to collaboration. Physical distance, language barriers, time zone differences, and cultural nuances can bring collaboration challenges.
• Less control over the project. The outsourced team works independently of your company. Although you’ll still have input in terms of establishing goals, deliverables, and deadlines, you’ll have less managerial control over the execution of the project.
• Vulnerability to security threats. The outsourced team will need access to your private data to execute your project. You’ll have to implement strict security protocols to prevent data breaches.

The proper productivity, collaboration tools, and security protocols can help you mitigate these disadvantages.

Staff augmentation vs. outsourcing: Highlighting the key differences

Understanding what makes each model distinct will help you settle the staff augmentation vs. software outsourcing debate. Consider the following:

Control

Because staff augmentation involves hiring IT professionals who collaborate directly with your internal team, you can maintain full managerial control of daily workflows and processes. This enables close collaboration and full alignment in the project's execution.

Project outsourcing, on the other hand, transfers managerial control to the external team. The external team takes charge of overseeing daily operations. The hiring company sets the goals, but the outsourced team can decide how they execute the project.

Cost structure

With staff augmentation, you pay the augmented staff based on the number of hours they work (with lower fees as they come from cheaper regions).

Alternatively, you can agree on a fixed contract rate. While this appears straightforward, you do have to consider the time and resources you’ll spend onboarding and managing them.

With project outsourcing, you pay a predetermined fee for the entire project. Because the outsourcing firm already has the tech stack you need and operates from a region with lower salaries, you can secure significant cost savings.

But you still have to be wary of the costs associated with transition periods (assessing your needs and determining your requirements), customizing services, and renegotiating contracts.

Flexibility

Staff augmentation makes it quick and easy to adjust the size of your IT team as needed. You can add specialists when the workload becomes too much to handle or when you need hard-to-find IT professionals to fill skill gaps within your team.

With project outsourcing, scaling the team often means expanding the project scope. This means lengthier transition periods and greater contractual changes.

Integration and management

With staff augmentation, managers must ensure outsourced professionals are incorporated into the internal team. This means taking the time to introduce augmented staff to the company culture, workflows, and tech stacks. You may also have to navigate language barriers.

Conversely, with project outsourcing, you entrust the execution of the project to an external team. You can communicate to ensure alignment regarding project goals, deliverables, and timelines. Still, you don't have to train the outsourced project staff or introduce them to your company's culture, workflows, and processes.

Staff augmentation vs. project outsourcing: A comparison

This table summarizes the key differences between the two hiring models. It’s a great overview of staff augmentation vs. project outsourcing.

When to choose staff augmentation

There’s no one-size-fits-all when deciding on project outsourcing vs. staff augmentation. Staff augmentation may be your best option if you prioritize the following factors:

Close control

Staff augmentation is the ideal option for companies that need to fill specialized positions while keeping the project under the full control of existing management. It offers a quick way to scale up the internal team to complete a project without costly permanent hires.

Rapid scaling

Companies can turn to staff augmentation when they need to add someone with special expertise to the team or during workload surges. It allows you to quickly and seamlessly add a workforce to your existing team, increases its efficiency, and maintains the continuity of your operations.

When to choose project outsourcing

Your answer to choosing project outsourcing vs. staff augmentation may be project outsourcing if your company prioritizes the following:

Cost reduction

Outsourcing is an ideal hiring method for projects involving many iterations and requiring a longer time frame. This option significantly reduces cost because processes are transferred to a team operating in a lower-cost region.

You also benefit from an economy of scale because you work with vendors who already have the training and tech stacks or systems that can be very expensive to purchase for your own company.

Non-core activities

Companies may want to hand over non-core projects to external teams to avoid disrupting the ongoing work of internal staff. For example, you may hire a dedicated team to create an eLearning app to upskill your employees. Your in-house team can go on with business as usual (BAU) and have a finished product delivered to you.

Access to advanced technology

Project outsourcing firms invest in technology and infrastructure that lets them excel in specific fields to meet the unique needs of their niche market. Working with an outsourced team gives you access to cutting-edge tech stacks and specialists who know how to leverage them.

Next up, it’s time to home in on the nitty-gritty of assessing your company’s unique needs and circumstances.

Other factors to consider when choosing between staff augmentation and project outsourcing

Your best choice boils down to your company’s unique needs and circumstances, including the following:

• The launch date of the product
• The project specifications and required technical expertise
• The availability and expertise of tech specialists within your team
• The budget allocated for the project

It also helps to answer the following questions:

• Is the project directly related to your core business operations?
• Is it a long-term project?
• What level of managerial control is more likely to bring success to the project?

Once you’ve chosen between staff augmentation and project outsourcing, you’ll need to find the right software development partner. And we believe we’re just the firm for you.

Our Expertise

Giraffe Software is a rapidly growing software development company that has completed 120 outstaffed projects and worked with over 60 EU and US clients since its 2016 inception. To meet your staffing needs, we have access to a talent pool of 30,000 experts, 80% of who are senior and mid-level IT specialists.

IT staff augmentation services

With our efficient onboarding process and reasonable rates, we can help you fill any skill gaps your internal development team may have while slashing 50% off your IT budget.

Dedicated software development team

You can count on us to provide a dedicated software development team to help you achieve your project goals with superior development support and tech expertise. Our dedicated teams help clients outdo competitors by delivering top-notch results 30% faster.

We’ve completed projects with outstanding results. Here are some of them:

ARTOUI, a German art curation company, wanted to build an eCommerce platform for artists to sell their work to a global market.

The client had already worked with a development team that failed to deliver a minimum viable product (MVP). They came to us with error-ridden software and an exhausted budget.

We needed to assemble a team to build an MVP with a limited budget and a tight deadline.

We started by assessing the client’s existing wireframes and beta sites. We also analyzed the existing code to devise a strategy to squeeze the most out of the client’s budget.

After only one week, we finished compiling user stories, critical errors, and technical tasks and presented the client with a project estimate (which forecasts the time, resources, and effort it will take). By the second week, we’d put together a team of five experts (made up of dedicated developers and part-time team members).

These are the results we delivered for the client:

• A professional development team that effectively formulated a strategy to achieve the project goals within budget and according to the client’s time constraints
• A high-quality product architecture designed in a month
• A working MVP delivered in five months, allowing the client to secure additional investment
• A fully developed product delivered four months after the MVP
• 58% cost savings compared to working with developers in the client’s locale

We successfully developed a high-end eCommerce platform that allowed ARTOUI to expand into new markets.

Founded by James Lenoble, a top business analyst, this US pre-seed startup wanted to build an innovative eLearning platform based on the patented adaptive learning interface (ALI). The solution would enable teachers or parents to personalize learning programs for each child and monitor their progress. It incorporates gamified elements to make educational tasks fun and engaging.

The client came to us with only a basic idea, leaving us to flesh out the project requirements. We decided the project required serverless architecture, so we needed to find developers experienced in this technology. That proved to be a challenge; few specialists with this sought-after expertise were available.

We put together a team of business analysts, developers with expertise in serverless architecture, a designer, and a project manager. By the sixth week, we delivered wireframes and an accurate cost estimate for the MVP stage. We guaranteed that we wouldn’t exceed the budget estimate.

We delivered the following results:

• Detailed product requirements based on in-depth research
• A professional team with the required expertise
• A tech stack (Node.js + AWS Lambda demo) with 25% faster performance than the Laravel + Laravel Vapor demo.
• A high-fidelity MVP completed under budget within fourteen months
• An ongoing collaboration that’s expected to deliver a fully functional eLearning platform

You can check what our clients say about us on third-party platforms: Clutch, GoodFirms and Upwork.

Conclusion

Both staff augmentation and project outsourcing help you tap hard-to-find tech talent abroad at a fraction of the cost of hiring at home.

Staff augmentation is best if you want to hire professionals to help your in-house team handle workload surges. Project outsourcing is your best bet if you want to outsource your project to an independent team fully so your internal team can focus on core business projects.

Reach out to us at Giraffe Software. We’ll work together to develop tailored solutions that best meet your unique business needs.