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Staff Augmentation vs Outsourcing vs Hybrid Approach: A Detaile

  • 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 you get from 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

    Staff Augmentation Limitations 

    • 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

    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 you get from 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 you get from 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

    Final Words

    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.