The demand for competent IT services is always increasing in an uncertain and dynamically changing corporate environment. Project Outsourcing and The dearth of skilled software engineers, on the other hand, is a fact that today’s market must face and adapt to.
Businesses throughout the world are increasingly looking to technology innovation to cut costs and increase operational efficiencies.
Developing in-house capabilities to handle the increasing number of IT projects may be a costly and dangerous endeavor, especially when an organization’s IT demands are continuously changing.
When firms seek outside assistance to execute IT projects, they often select one of two delivery models:
- Project outsourcing
- Staff augmentation
In fact, both staff augmentation and outsourcing are cost-effective solutions for IT managers. In reality, this aids in achieving the desired results and meeting the various phases of deadlines in a timely manner.
Furthermore, there are a few similarities between the terms outsourcing and staff augmentation.
Prior to making a decision between the above-mentioned possibilities, it is critical to analyze your company’s needs.
As a result, here are some critical aspects to consider that will help you understand and make the best decisions for your company.
Table of Contents
What Is IT Staff Augmentation, and How Does It Work?
It’s the process of aiming to improve the overall quality of your workforce by hiring skilled developers or effectively improving the quality of the existing technical team.
The key advantage of this method is that you keep complete control over the development process.
Because the developers will be reporting directly to you or a representative from your firm, they will work by following your lead and following your roadmap exactly as it is put down. As a result, a more homogeneous teamwork environment is created.
What Is Project Outsourcing, and How Does It Work?
Following that, we have project outsourcing, which is an arrangement in which you entrust projects to other companies or freelancers who are not in your immediate zone of influence. Developers, coders, and home-based freelancers are examples.
They could also be entire agencies based in another country that specialize in providing such services to major IT companies.
Staff Augmentation’s Advantages and Disadvantages
- Complete command –When you work with a staffing firm, you are closer to an employer than you are to a client.This means you have complete control over almost every aspect of a project, and the developers just follow your lead.You can delegate, but you must continue to supervise the teams to ensure that everything is completed as decided.
- Smoother integration – Adding developers on the spot with the appropriate abilities and experience will make integrating them into the company’s existing system much easier. Processes are more easily adopted, and changes are more easily implemented.
- Filling Gaps is Easier – One of the most significant benefits of this method is the large number of development professionals and experts in any particular subject that can be found to fill the posts that are currently unfilled. If you require developers with certain expertise, you may readily get them through staff augmentation businesses and the like, effectively addressing any team’s weak spots.
- More flexibility — Because you can easily add or delete developers as needed, any division can easily shake things up. This is especially useful in the IT industry, which is always changing.
- Cost Savings – It’s a simple truth that hiring part-time developers is less expensive than hiring full-time developers with all of the associated overhead costs such as taxes, administration, health insurance, and so on, resulting in lower overhead costs.
- Faster Progress – A large team does not always imply that a project will be completed faster, but it can if the appropriate positions are filled with the right people.
- Workload Reduction – When there are more people on the team fulfilling their tasks, there is less work for everyone, which helps everyone.
- More Workplace Harmony – Employees are less frightened by outsider developers, making it easier for them to embrace new innovations. This could lead to a smoother, more harmonic workflow that doesn’t add to the usual office workplace competitiveness. It may even contribute to a less contentious proposal system.
- Training Requirement – Effective onboarding is required regardless of how good the developers you hire are. The required onboarding programme may be substantial, depending on how intricate the company’s internal processes are.
- Internal Flaws Vulnerability – No company is flawless, and these flaws might manifest themselves in the contractors’ outputs. As a result, it’s a good idea to fine-tune your processes before hiring developers from staffing firms.
- Managing Responsibilities – Because contractors are not generally entrusted with such obligations, greater duty falls on team leaders, supervisors, and other executives as a result of additional developers.
- The Company Bears the Burden of Success – A decent product is never assured, no matter how smart the developers are, if the company’s processes and internal systems are incorrect.
- Employee/Contractor Separation – In some arrangements, there is a separation between contractors and employees. Although many firms handle contractors as if they were members of their own team, establishing trust and connections across units, especially in a remote context, takes time and effort.
The Benefits and Drawbacks of Project Outsourcing
- Less Onboarding Requirement – When you outsource your project to another company, you usually get a skilled staff that already knows what they’re doing and reports to a project manager, so there’s less onboarding required.
- Ease of Scalability — For a reduced cost, several projects can be assigned to multiple teams, greatly improving scaling prospects.
- Fewer Management Responsibilities – Project outsourcing often comprises external teams with their own supervisors and project managers, which relieves corporate leaders of some of their responsibilities.
- Only High-Quality Output — The main criteria for outsourcing assignments will always be output quality, and if this is compromised, the contract can be terminated.
- Fewer Legal Liabilities – Project outsourcing entails fewer legal responsibilities for developers, as well as the possibility of limited client liability.
- Filling Departmental Gaps — Companies that lack specialised departments, such as tech support or IT workers, can hire an outside development firm to fill those gaps.
- Cost Flexibility — Because costs vary depending on the project, you may always alter the company you outsource to for cheaper development labour. The degree of expense variability is substantial.
- Control is Limited – Due to the remote nature of the arrangement, project outsourcing unfortunately provides extremely limited control on a practical basis.
- Unhappy Employees – Most employees dislike the concept of working with people they don’t know and with whom they have no interaction.
- Quality and Reliability — When you don’t have control over the development process, it’s difficult to know how good the final product will be.
- Size Dependence — Outsourcing smaller projects to trusted providers might be difficult, as well-known outsourcing firms aren’t usually prepared to take on new projects unless they can guarantee a steady stream of revenue for years.
- Poor Integration — It can be difficult to integrate third-party teams with company systems, practises, and processes.
Hybrid Approach: Combination of Both Processes
At the end of the day, based on your software development requirements, you may opt for staff augmentation, project outsourcing, or a hybrid approach that combines both models with managed services to fill out your overall staffing strategy.
You can always change these engagement models as needed as your company grows. The best course of action is to select an experienced vendor who can assist you in overcoming your current staffing challenges while also consulting with you on a regular basis so that you can implement another outsourcing model if and when necessary,
or adjust your current staffing model to make your company run as efficiently as possible, increasing its competitiveness in national and international markets.