There is currently a hightening need for companies to cut down costs and build up efficiency through digital innovations.
The ability to grow internal capabilities for more projects can be a costly and timely endeavor as well as representing a particular risk – and this is acutely unstable when the needs of an organization undergo constant change.
For this reason, the last few years have seen a spike in businesses developing outside services to expand their capacity. And when these businesses look for external teams for managing projects, there are typically two types of staff models: staff augmentation and project outsourcing.
Let’s look at the differences between staff augmentation and project outsourcing.
Expanding your capacity with staff augmentation lets a company supplement its current workforce with an external team that is highly qualified in the skills needed to fulfill a project. Because they are external, they are the ones who pool their resources into the project.
When you’re considering staff augmentation as the module of choice for your business needs, keep in mind the following benefits and issues:
Benefit one: it gives you specialist expertise
Benefit two: it leverages existing resources
Benefit three: it enables control over the staff
Benefit four: it provides flexibility for any changes needed
Benefit five: there is easier internal acceptance when a team is there for a specific amount of time
Benefit six: integration with internal processes is easier
Benefit seven: it reduces the burden on employers
Issue one: it is heavy on internal processes
Issue two: it could be training intensive
Issue three: it may increase the overhead of management
Issue four: it might lack economies of scale
Issue five: it tends to be resource centric
Growing a team with project outsourcing lets a business use the resources of another company to complete a whole project. There are times when project outsourcing also takes the form of out tasking, which is when a specific task within a project is outsourced and managed entirely by the outsource team.
If you’re considering project outsourcing as the module of choice for your business needs, keep in mind the following benefits and issues:
Benefit one: it can reduce training costs
Benefit two: it can reduce the overhead of management
Benefit three: tends to be results-centric
Benefit four: the cost structure is flexible
Issue one: there is a greater lack of control
Issue two: there may be internal resistance from your in-house employees
Issue three: difficulty in finding a quality trusted outsourcer
Issue four: for small projects it tends not to be cost effective
Issue five: may have issues with internal process integration
Using staff augmentation with project outsourcing
Business today is laden with complexity which means that one solution that fits one business isn’t going to be the perfect fit for all. We are through with one-size-fits all models. For many companies, their needs are best met through project outsourcing; many others see staff augmentation as the perfect model for expansion; and for others, it makes sense to utilize the benefits of both staff augmentation and project outsourcing.
There are moments when for businesses this hybrid approach would work best. For example, when a business’ team is competent with the core components of a project, however, other core skills are missing within the team that are required for a successful project. Or another example, when a project is taken up by business yet the skills necessary to complete it lie outside of the competencies of the business.
In both of these cases, a hybrid approach – using staff augmentation and project outsourcing – may be ideal as a model. An approach where staff aug is applied to acquire the right specialists for the project in the first example, with project outsourcing tied in to complete the project in the second example.
If you are seriously considering expanding your capacity for your next development project, go through your short-term and long-term objectives to get a clearer picture of which model may work better for you.
And most importantly, find a dev consultancy that you can trust; first get to know the leaders and teams of a consultancy to better understand if they are the right fit for you – whether you’re edging towards staff augmentation or project outsourcing… or a hybrid of them both.