21 Oct 2020

Need more resources for your software development project? This is a common problem, and there are several ways to address it. Is the staff augmentation model better for software development? What about outsourcing? In this post, we'll discuss the differences between outsourcing and staff augmentation. We'll also give the information you need to choose the right model for your organization. 

First, let's talk about software development outsourcing vs. staff augmentation.

What is outsourcing and its pros and cons?

Outsourcing is the business practice of hiring a party outside a company to perform services and create goods traditionally performed in-house by its own employees and staff.

Pros:

Reduce costs 

Outsourcing allows you to cut costs on your project overall. It's much less expensive than hiring and training new team members. In fact, according to data from Deloitte, 59% of businesses say they use outsourcing as a cost-cutting tool.

Access to talent 

Outsourcing gives you access to a global talent pool that you wouldn't otherwise have access to. Instead of focusing on candidates only in your area, you can bring in anyone who has the right skills to work on your project.

Increased productivity

Outsourcing allows you to take the stress off of your workforce and increase productivity overall. This can be helpful if your staff currently has too much on their plates or if you have a looming deadline. 

Cons:

Resistance from current staff

Your existing team could be resistant to the idea of outsourcing. This can happen for several reasons, but this is often the case because it changes how teams work together. It can be challenging to get your staff to adopt this new model. There's also a negative connotation that can come with outsourcing. Many people believe that outsourcing increases the threat of job cuts. 

Less control

When you choose to outsource, you have less granular control of how the project is being developed and managed. You have to be very clear about your project's goals and timelines and make sure that everyone is on the same page. Ultimately, you should get the results you want because the project's execution will be largely out of your hands.

Reliability risk

Since you're giving up some control when outsourcing a project, there is also some reliability risk. Will the outsourcing partner you choose deliver quality work on time? You can manage these risks by carefully choosing your outsourcing partner, but it is a valid concern that many companies have. 

What is staff augmentation, its advantages and disadvantages?

Staff augmentation is a form of outsourcing that allows companies to add staff to their teams to fill in skills gaps and support their projects.

Pros:

Control over staff

For projects where you need a bit more control over your team, staff augmentation is ideal. When you choose staff augmentation, you have more say in how the project gets done. 

Ability to leverage both internal and external resources

Workers who enter your team via staff augmentation can leverage both internal and external resources. These people can lean on your internal process to guide their way or bring their external resources and knowledge to the table. This adds another layer of value to this model.

Reduce the cost of acquiring skills

Bringing additional team members this way will complement the skills your team lacks. It will also bring in talent that could be costly for your company to acquire otherwise. This is key when the budget is a concern for your project.

Cons:

More Training 

Training the new staff will be necessary as they integrate into your company. You'll need to familiarize the team member with ways of working that will most likely differ from their previous projects.

More supervision

Getting new team members onboarded does require additional time and effort from the established team. The steps your firm uses for onboarding internal team members should apply. You also need to consider security measures, access issues, and other contingencies for work to begin.

Reliance on internal processes

If you are adding team members due to your staff's struggles, you may be augmenting those problems. Sometimes internal processes are the primary bottleneck. This can have a significant impact on productivity. 

Now that we've talked a little bit more about staff augmentation let's compare this model to other commonly used options. 

Staff augmentation vs. managed services

Managed services are similar to the forms of outsourcing we've covered but with one significant difference. Managed services are the practice of outsourcing on a proactive basis. This means that processes and functions are outsourced continuously. 

The managed services model could be the right choice for you if you want to outsource an entire function or system. However, if you're looking for something short term or project-specific, staff augmentation is the best route. 

Staff augmentation vs. freelance consultants

Working with a freelance consultant or an agency is very different from the staff augmentation model. Typically, consultants will have as much skin in the game as you do. When working with a consultant, you're paying for a specialized skill set and the results you want to achieve. This can be useful if you're entering into a new strategic initiative and need someone with the skills to drive you towards success. 

That said, it isn't ideal for project-based work. In these cases, you need "more hands on deck," and that's not what a freelance consultant will provide. If your goal is to take the pressure off your current staff or meet a deadline more quickly, staff augmentation is the answer. 

Mistakes to avoid when choosing a model

Before choosing between models, the first thing to know is that it takes research to determine what model is right for you and find the best provider. Every organization and every project is different. Here are a few things to avoid when making your choice:

1. Skipping internal analysis

Take a closer look at your needs and resources before you make a choice. Don't just choose an outsourcing model because you think you don't have the means to get work done. Instead, think about what your current team lacks and how you can fill in those gaps. 

2. Poor project planning

You should enter any outsourcing arrangement with a plan in mind. Without clear planning and goals, you could easily make the wrong decision and waste both time and money. Before you even consider outsourcing, define your project well. It would help if you also discussed with your existing team about expectations. 

3. Rushing your decision

The most important thing when choosing any of these outsourcing models is to take your time. Don't rush into choosing a model or even choosing the company or people you'll work with. Instead, understand that no matter what you choose, you're forming a partnership, investing the time in making the right decision will pay off. 

What we recommend

Both models have their advantages and disadvantages. That said, here at Unosquare, we believe that the staff augmentation model is best for software development projects. This method allows you to maintain more control over your project and generally presents less risk than other options. 

What Unosquare offers

We are laser-focused on finding the best talent in the world. Beyond that, we can put together a delivery management practice that is your eyes and ears within our organization. Unosquare provides agile software development services and complementing talent for your teams. Want to learn more about how Unosquare can help with your project? Check out our blog to see additional content.

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