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Modern businesses are blessed with the flexibility and convenience of sharing their work with third party service providers. You can outsource selected processes (like IT) or hire contractual team members to increase internal expertise, reduce employee costs and alleviate IT management burden. Although outsourcing and staff augmentation provide similar benefits, they are not interchangeable. They have their respective advantages, limitations, and use cases.
IT Staff augmentation
In simple terms, IT Staff Augmentation means hiring specialized technology professionals for a limited time on a contractual basis. Unlike full-time hiring, you are able to lease their services only for a specific project or duration. They work as a part of your team, but sometimes remotely.
On the other hand, outsourcing involves offloading a task (or a part of it) to third party experts. You provide the requirements and guidelines, but don’t get directly involved in their work process. Hence, it’s a more autonomous process.
Results or resources
Fundamentally, outsourcing aims at getting specific tasks done from external teams. The objective is to achieve desired results. You leverage the expertise of the service provider and trust them to deliver according to expectations. Staff augmentation is focused on getting more team members to work in collaboration with your internal team. The objective here is to get skilled resources. The work is done under your direct supervision and provides the ability to manage first hand and control.
Staff augmentation gives you the option of training your temporary recruits. They work closely with internal teams and follow company processes. You get more control and syndication, which is critical for complex and proprietary tasks. Outsourcing doesn’t allow for such close control as work is done outside your office premises and without your direct supervision. You can provide extensive guidelines and have multiple review points, but the control is comparatively limited.
As a counterbalance of control, hiring contractual staff brings in some different responsibilities. You are required to impart training (if necessary), develop communication channels between in-house and new remote teams and ensure work quality. In the case of outsourcing, all responsibilities lie with the service provider. Your role is limited to defining and reviewing the work performance, which requires less time, but also less control. For this reason, it is very important to hire the right vendor. For instance, know what things to look for when searching for a web app development provider.
This is arguably the most overlooked difference between outsourcing and staff augmentation. In many cases, perceived volume of work doesn’t suffice and project scope needs to be increased.
Naturally, escalating workload or order volume proves more economical and easier in outsourcing. Economies of scale doesn’t apply to staff augmentation because you are paying per resource, while outsourcing works on volume basis. Also, it is far easier to assign additional tasks than adding new members to your team chain.
To summarize, both staff augmentation and outsourcing are great tools for business owners. They are similar yet have their signature nuances. It’s advisable to have both options at your disposal and use discretion to choose the right alternative for the right processes.