Staff Augmentation vs IT Outsourcing: Key Differences And Which to Choose

George Fironov
George Fironov

I connect businesses with top software engineers and IT talent on demand. I focu...

23 posts

Staff-augmentation-vs-outsourcing Whats-the-difference

Do you plan to launch a new IT project soon? Perhaps you want to improve and update your current products or take your business to a new level. Facing such challenges means that your company grows and develops. And that’s great.

If you need talents to realize these and other goals, welcome aboard! We are here to discuss two solutions: staff augmentation vs IT outsourcing. One of these might be the perfect fit for your project. Read this article from start to finish. We are talking about the advantages and disadvantages of both models. Also you’ll get recommendations on how to choose the best option. Ready? Let’s dive in!

IT staff augmentation is ideal for businesses seeking to maintain control and integrate external expertise into their existing teams. In contrast, outsourcing suits those looking for comprehensive, hands-off project management.

IT Staff Augmentation: Benefits and Drawbacks

First, we are going to figure out what is resource and staff augmentation. Let’s start by defining the concept: staff augmentation means that you add skilled specialists to your team on a temporary basis. The purpose could be, for instance, implementing one or several projects, meeting deadlines, etc. It’s worth noting that in this case, you don’t hire talents yourself but entrust this task to an agency.

Benefits of staff augmentation:

  • Total control over the project, as well as over team members and their task performance.
  • Staff integration with existing processes and company culture.
  • Quick scaling of your offshore team up or down based on project requirements.
  • Access to a wide pool of experts with specific skills needed for short-term projects.
  • Involving augmented staff to various projects within their responsibilities and work schedule.
  • A faster onboarding process compared to new full-time hires.
  • Speeding up certain tasks to meet deadlines.

 

Cons of staff augmentation:

 

  • More expensive due to hourly rates and agency fees compared to outsourcing.
  • Requires additional effort from internal management for training and communication.
  • Your company should have a manager to supervise the work of augmented staff.
  • Relying on internal resources can shift the focus of the business and increase costs.
Staff Augmentation business model
Staff Augmentation business model: Inveritasoft.com

If you delegate tasks such as development to temporary employees, your in-house team can focus on more important strategic assignments. Augmented staff can indeed bring their expertise to your company, especially when we are talking about highly qualified experts. You’ll definitely get the job done.

However, be ready to pull your socks up because you should devote time and resources to training and educating your new employees. Consider the maintenance costs. Compare this approach with the outsourcing variant or even dive into Toptal company reviews to assess freelance pros and cons and make the right decision then.

IT Outsourcing: Benefits and Drawbacks

Project outsourcing is a different kettle of fish. But the goal is the same. In this case, you’ll also get your project ready. The essence of this approach lies in delegating specific tasks to an external service provider and embracing all the advantages of offshore software development if you choose it.  You save your time, effort, and resources. A team of qualified and experienced experts is engaged in implementing your project.

Pros of IT outsourcing:

  • Increased efficiency and faster project delivery thanks to technologies providers often have.
  • The provider has a manager who organizes the process of work on the project and monitors quality.
  • Access to talents with specialized skills and expertise not available internally.
  • Flexibility to scale resources up or down based on project requirements.
  • You don’t waste time looking for specialists, as all experts are in the provider’s team.
  • You don’t have to spend money on employee hiring and training.
  • Your company can focus on core business activities and strategic initiatives.
  • Provider is responsible for meeting agreed-upon deliverables.

 

Cons of IT outsourcing:

  • Less control over the project management and quality assurance.
  • Possibility of communication challenges and misunderstandings.
  • There may be concerns about the quality of work.
  • Your company may become overly dependent on outsourcing providers.

Here is a thing. You can avoid these drawbacks of IT outsourcing by choosing a reliable partner. Please understand that the market is full of agencies that offer IT services. Of course, you can meet companies with no experience, inflated prices, lack of quality guarantees, etc.

When choosing a provider, pay special attention to their previous experience, analyze the portfolio, assess the comfort of communication, and read reviews. Apply the right approach for searching the contractor. Be sure this model might be very profitable for your business. Keep in mind these recommendation when you choose between in-house software development and outsourcing

Real-World Examples When IT Staff Augmentation Made a Difference

Counterposing staff outsourcing vs staff augmentation, let’s compare the ways global digital leaders utilise these two approaches. IT staff augmentation works not only for SMEs and startups, although it has unrivalled advantages for those types of businesses. It helps market leaders across different industries facilitate flexible and fast delivery of their massive high-impact platforms:

  • Scaling during high-demand periods. Google employs an additional workforce when they need to solve specific tasks quickly. Outstaffed engineers complete tasks like cloud infrastructure enhancements or AI research on a project basis.
  • Filling skill gaps during short-term projects. Microsoft goes for team augmentation when they need extra hands in cybersecurity and software development. The approach helps to keep up a pace in the innovation race.
  • Handling increased use of a platform. Walmart hires augmented teams to optimize infrastructure and app performance during seasonal shopping peaks.
  • Scaling on the initial stage. Airbnb benefited from outstaffing in its early days. It gave founders the possibility to concentrate on the core operations while continuing active platform development.
  • Supporting data-driven architecture. Netflix relies on external experts when they need to introduce new features efficiently while keeping the platform stable and reliable.
  • Implementing advanced technologies. Mayo Clinic along with other innovation-oriented healthcare providers used extra engineers to introduce features of telehealth and digital patient management. It gave them the possibility to introduce advanced technologies efficiently and securely and stay competitive.

The mentioned companies benefited from agility, reduced time-to-market of their innovative products and gained access to tech talents around the globe with a variety of skills and rates. Being leaders in their industries they mastered the art of utilizing extra workforce for enhanced development.

Industry Giants Embrace IT Outsourcing Strategies

IT outsourcing appears to be a favourite strategy for digital product building for numerous market leaders. Even those who can easily afford an in-house development team choose the help of IT partners. It helps them to enhance operational efficiency, free resources to concentrate on strategic tasks and access specialized skills at a lower cost. The enterprises below are leaders in their domains, and they opt for digital outsourcing:

 

  • Nike. The company is not just manufacturing sportswear. They also have their applications and platforms. They entrust product building and data management to partners. It gives them the freedom to focus on marketing and product innovation while maintaining a competitive edge.
  • WhatsApp. The company used to outsource a significant part of the product development to a team located in Eastern Europe. The customer support was also handled by an external partner. Thanks to this approach a small team scaled fast and won users with its robust platform.
  • Slack. When the company needed to concentrate on the improvement of its main desktop application, it handled mobile development to a third-party vendor. Their Android app has been fully outsourced at the beginning.
  • Google. Even one of the greatest digital companies outsources some processes. They entrust mainly technical support and content moderation to the external vendors, but in some cases, the software development can be also handled by the partnering firms. This approach allows the giant to keep scalable and flexible.
  • Microsoft. Being a great tech expert itself, Microsoft still can outsource some software-building projects to partners around the globe. The routine tasks are handled virtuously while the main office is concentrated on innovations they can bring into the world.

In the dynamic world, external expertise can help to stay competitive and think about the most important things. With the right technical partner, even the biggest market players will find ways to benefit from IT outsourcing.

Staff Augmentation vs Software Outsourcing: Key Differences

We want you to pay your card’s right and pick up the best option. These two approaches have a fundamental difference that you need to understand. A model that will be perfect in one case can be a complete loser in another. So here is a comparison table about staff augmentation vs project outsourcing.

Criteria

Staff Augmentation

IT Outsourcing

Main Goal

Fill specific skill gaps or augment the existing team for a limited period.

Delegate entire projects, functions, or IT operations to an external service provider.

Control and Management

Team members are considered an extension of the internal team. It allows for more direct control and management.

External service provider manages the outsourced tasks or projects independently. You as a customer have less control.

Cost Structure

You pay for the services of the augmented staff on an hourly or project basis, along with any agency fees.

Have a more structured pricing model. It can be, for example, a fixed-price contract or ongoing service fees.

Skill and Expertise

Often used to fill specific skill gaps or bring in specialized expertise for a project.

More about accessing a broader range of IT services or functions, often on a more comprehensive basis.

Integration and Collaboration

A higher level of integration and collaboration between augmented staff and the internal team.

Works independently and may not integrate as closely with the internal team.

Involvement Level

A higher level of involvement from the company in terms of managing and overseeing the augmented staff.

Requires less day-to-day involvement.

Flexibility and Scalability

Companies can quickly scale their team up or down based on project needs.

Changing the scope or size of the outsourced work can be more complex.

Onboarding

Involves integrating staff into the existing team and familiarizing them with the company's processes and culture.

Is more about setting up the initial communication channels, establishing project goals and timelines.

By the way, we analyzed the experience of well-known companies. It might be interesting for you. For example, Google works with about 121,000 temporary employees and contractors from different countries. Amazon has utilized staff augmentation to quickly scale its customer service team during busy shopping seasons, such as Black Friday and Cyber Monday.

Staff Augmentation Benefits
Staff Augmentation Benefits: Tekglide.com

Let’s also consider real-life examples of IT outsourcing to Europe. Microsoft may outsource the development of a specific feature or module of its operating system to a third-party company. As well as IBM who entrusted some projects to external vendors in countries like India and China. This model allows business to access specialized expertise and reduce costs. When providers work on development in-house team can focus on their core activities.

Staff Augmentation vs. Software Outsourcing: What Model Will Be Suitable for You?

So now you have a big picture. You can see the difference between these two outsourcing models: project outsourcing vs staff augmentation. What is your next step? Actually, it’s time to choose the perfect fit for your current needs. And we have a few more tips to help you make the right decision. Also you can read more information on this theme in our article about outsourcing and outstaffing.

Reasons to choose staff-augmentation model
Reasons to choose staff-augmentation model: Tnation.eu

 

5 Reasons to Choose the IT Outsourcing Model

IT outsourcing is a prevalent decision. Many various businesses successfully exploit this model. It is a great choice for healthcare organizations, banks, financial services firms, educational institutions, manufacturers, online retailers, and so on.

The perfect image of IT outsourcing model implementation is also a tech startup. They can delegate IT development while a full-time IT department works on core business tasks. The outsourced team can perform creating and maintaining the company’s website, mobile app, or other software solutions.

Key reasons to choose the IT outsourcing:

  • Lack of the necessary expertise for a specific IT project or task in-house.
  • More cost-effective solution than hiring and maintaining an in-house team.
  • Seasonal or fluctuating workloads.
  • You want to find skilled professionals that may not be available locally.
  • Solving issues associated with technology implementation and project management responsibilities.

 

As you can see, for short-term projects or tasks that require specialized skills, outsourcing is a cost-effective and efficient solution. If you are still thinking about what to choose outsourcing vs staff augmentation, consider this fact: the first model allows you to cooperate with different specialists (developers, DevOps engineers, UI/UX designers, project managers, etc.) simultaneously, in the second one you must hire them separately. Also you need to know IT outsourcing vendor selection criteria to pick a perfect company for your project.

5 Reasons to Select the Staff Augmentation Model

Staff Augmentation use cases
Staff Augmentation use cases: Turing.com

Let’s imagine you run a financial services company. For now, you need to develop a new fintech solution to stay competitive. Your existing team is loaded enough with their main tasks. What can you do in this situation? Sure, you can explore what services Bairesdev offers or other freelance sites like Upwork to assess possible outcomes from hiring freelancers. However, it is more secure and efficient to augment your IT staff with additional developers and project managers. This way you can accelerate the development process and bring the product to market as soon as possible.

Five main reasons why you should use staff augmentation for your project:

  • Quickly bring in experts with specific technical knowledge.
  • Easily scale your workforce up or down. Add or exclude employees focusing on project requirements without long-term commitments.
  • Manage budgets effectively. Hiring temporary staff costs less than engaging full-time employees.
  • Accelerate project timelines by augmenting your team with additional resources.
  • Mitigate risks in critical projects by employing experienced professionals.

We have one more example for you. Imagine a startup working on an innovative mobile app. Their budget is limited so far. It means they don’t have money to hire a full-time development team. Staff augmentation might be a good solution. A startup can bring in experienced app developers for the duration of the project. Owners have an opportunity to manage the project, access high-quality talent and control costs in the most effective way possible.

Staff augmentation allows businesses to hire experienced professionals for performing short-term projects. Just think about how much you can save. You don’t have to pay for seek leaves and vacations like in the case with an in-house team. Also, you don’t spend a lot of money on onboarding processes. Most of these expenditures are the responsibility of the agency which provides IT staff augmentation services.

How staff-augmentation provide valuable for businesses
How staff-augmentation provide valuable for businesses: Veroke.com

Use Talmatic to Simplify Your Search

Even if you understand the pros and cons of staff augmentation vs. outsourcing, it could be difficult and time-consuming to find a team or developer who can guarantee that you will be satisfied with the result.

We have great news for you. Today, you can find developers online. Talmatic is here to help. Whichever model you choose — IT staff augmentation vs. outsourcing — you can get the best offers using our service. Don’t waste your time looking for companies and comparing their terms of cooperation. We’ve already done that for you:

  • Talmatic outstaffing service brings together the best professionals from Ukraine and Eastern Europe.
  • We carefully review each expert’s expertise and experience.
  • You can hire developers of various specializations (Android, custom blockchain development, C#, Backend, Azure, etc.).
  • You will receive the best solution within 48 hours after applying.
  • Get expert advice on any engineering or team hiring questions.

 

Haven’t you decided between staff augmentation and outsourcing yet? No problem. Tell us about the specifics of your project and the current challenges you are facing, and we’ll offer the best solution for your case.

Choose employees through the Talmatic service. This way you can be sure that the work will be done with the highest quality level and within the project timeline. Please write to us for details.

Frequently Asked Questions

Looking to hire remote software developers but have a few questions unanswered? We are sharing our list of frequently asked questions by our clients when hiring software developers.

view all

Staff augmentation is a popular outsourcing model. It involves hiring developers on a short-term basis. Usually, an external agency brings experts to your company instead of your HR department.

With staff augmentation you get developers who will work under your control. They will be a part of your company. IT outsourcing differs. Picking up this option, you entrust the project completely to external specialists.

In the first option, you can hire a dedicated development team in Ukraine or separate specialists. If you outsource the project, you will get a third-party development team to work from day one.

view all

Read also

More Arrow right
More

Calculate the costs of hiring top developers with our free estimate.

No obligation to hire. No commitment from you.

Photo manager
George Fironov
Co-founder & CEO
  • Skype
  • Linkedin

This 20-Minute Call Will Change How You Hire Developers

Discover how Talmatic can help you solve your hiring headaches. In this personalized call, learn how we match you with developers that fit your technology and team needs.

In a short call, we would like to:

  • Learn about your development needs
  • Explain our process to match you with qualified, vetted developers from our network
  • Share next steps to finding the right match, often within a few days

Not sure where to start?
Let’s have a chat