Did you know?
As per a report, The global IT services outsourcing market is estimated to grow by $937.67 billion at a CAGR of 7.7% by 2027.
Businesses of each size are always looking for ways to become more efficient and save money. One integral way to achieve this is by outsourcing specific projects to a third party.
There are three cooperation models that you can consider for outsourcing your project. These are staff augmentation, project outsourcing, and managed services.
These models help you outsource your valuable projects to professionals who have in-depth knowledge in specific domain areas.
However, making the right decision can be difficult. You have to weigh the pros and cons of each option and decide which one will be the best for your business.
Today, we have come up with an extensive comparison of each model, i.e., staff augmentation vs. managed services and project outsourcing vs. staff augmentation, along with pros and cons.
You can go through the comparative analysis, advantages, and disadvantages of each model and choose which could be the right option for your project.
Here we go!
Staff augmentation refers to hiring developers for specific projects. It is a strategy where external vendors provide IT-related services to companies.
Moreover, it works as an extension to the existing team, with outsourced software developers working alongside and complementing their in-house skills counterparts.
IT Staff Augmentation is usually faster than hiring full-time employees because there are no advertising campaigns, time involved in interviewing candidates, or staff recruitment training.
In addition, the IT staff augmentation companies acquire people who have already been screened and approved.
The significant advantage of IT Staff Augmentation is the possibility of hiring only the necessary number of employees for a short period of time. This strategy enables companies to adapt their workforce requirements dynamically without investing too much money in new employees.
IT Staff Augmentation reduces software development costs because it can be more efficient than full-time employees. This strategy enables companies to achieve project objectives without overspending on IT staff hiring costs.
Pros of Staff Augmentation
- High Productivity Level
The high productivity level of IT staff augmentation is a significant reason to consider this option. When you bring in an outside team of experts, they are already up to speed on the latest technologies and best practices.
Moreover, they can hit the ground running and help your team achieve their goals quickly.
- Short learning curve
The IT staff augmentation team is already familiar with your business, the projects they’re working on, and the implementation standards.
They can quickly speed on specific challenges you are facing and help address technical problems fast. This will help reduce your learning curve and let you start achieving the results you want more quickly.
- IP Rights Security
With IT staff augmentation, the external team is responsible for its intellectual property (IP). This ensures that your critical business data stays safe at all times.
You’ll no longer have to worry about the security of your IP when you approach IT staff augmentation services. Moreover, you can analyze that while choosing staff augmentation vs. managed services, staff augmentation is a better choice.
IT staff augmentation is a very cost-effective option. When you bring in an outside team of experts, you only pay for the services that you need.
You don’t need to worry about salaries, benefits, office space expenses, and other overhead costs like you would do when hiring full-time employees.
- Flexibility and convenience
IT staff augmentation lets you quickly scale your team up or down as needed. You don’t need to bother about hiring and training new employees when projects ramp up, and you don’t risk losing productivity if one of your people leaves the company.
This flexibility and convenience help ensure that your workforce is always ready to meet the demands of your business. This way, you can comprehend while choosing project outsourcing vs. staff augmentation, that staff augmentation would be a better option.
Cons of Staff Augmentation
- Short-term solution
Augmenting IT staff is only a short-term solution; it does not solve the problem of finding long-term employees with the right experience and skills.
- Hard to find a perfect fit
Another disadvantage of IT staff augmentation is that it can be hard to find a perfect fit. Often, the company has to settle for someone who is not an ideal match for the position. This can lead to dissatisfaction among professionals and can impact productivity.
Project outsourcing is a business model that allows companies to outsource their technology needs. When you need “IT support” more than just “Coding,” project outsourcing plays a significant part.
This includes programming and user interface/UX design and testing, which can be difficult for smaller organizations without enough staff.
One requires such a model when he needs to create new products or startups and also when he wants to add some exclusive features to the existing apps.
Moreover, this model offers a range of possibilities for the client and less engagement from his side. However, it also requires deeper research into outsourced software product development to assign some tasks to external experts.
Pros of Project Outsourcing
- Transfer of responsibility
As a business manager, you have several responsibilities at hand. There might be a situation where you cannot manage all these responsibilities as efficiently as possible.
There can also be a situation where your day-to-day work demands your direct attention and does not give you enough time to pay attention to other tasks.
In either case, it would be a good idea to involve project outsourcing so that you can manage all the tasks more efficiently. This way, while choosing project outsourcing vs. staff augmentation, project outsourcing can be the ultimate solution for you.
- Project-related expertise
Business managers should know what is happening in the domain. For example, if you are running a mobile app development company, it would be advisable for your business manager to understand the technicalities and functionality of different mobile apps.
Thus, project outsourcing can be a good option as it would help you gain more knowledge about the industry and domain you are working in.
- Wide range of skills
Outsourcing the project to a different organization would allow access to people with specialized skills. Some of these skills may be unique and unavailable in your own company.
Cons of Project Outsourcing
- Less control
With this model, the client relies on a provider’s expertise and has less influence over what happens in their workplace than with staff augmentation.
- Additional expenses
The vendor takes on more responsibility and experts when it comes to project outsourcing. Thus, it requires more money than staff augmentation.
Managed services is a collaboration model that outsources IT management and support functions to an expert third-party organization.
This arrangement brings in the added benefits of reduced overhead for your business while simultaneously elevating the capabilities and resources of your in-house staff.
With managed services, you can enjoy an elevated level of service at the amount it would take to hire your own IT staff. This way, while choosing staff augmentation vs. managed services, managed services can deliver you the best result for your project.
Moreover, the best-managed service providers will streamline the management process for your IT and provide valuable insight into emerging technologies to ensure you always meet current demand without compromising efficiency.
Pros of Managed services
- Better cost control
The cost of a business service depends on an organization’s requirement for availability and criticality. However, the savings are huge when you decide to outsource your IT services.
With managed IT services, you can save up to 70% of your costs on salaries alone. In addition to this, it also helps you save more money as employees don’t need to be physically present in the office( no cost on office space, equipment, etc.).
- Improved risk management
By identifying which services are most likely to cause problems and then cutting back on those, you can minimize the risk involved in your business.
Managed services can reduce risk by using proprietary methodologies and access to modern infrastructure. This enables them for best practices, making it easier than ever before to maintain your business’s security without sacrificing performance.
- Skill and Knowledge
When you subscribe to an offshore software development company, you get experts who will care for all your technological needs and help keep yourself competitive in an ever-changing industry.
- High availability, efficiency & productivity
Managed IT services can assist your business run more smoothly and efficiently, leading to increased productivity and higher profits. You can free up your staff to work on other important tasks by outsourcing your IT needs to a professionally managed service provider.
Cons of Managed Services
- Less On-Site Availability
As professionals working in managed IT services are not physically present in the office, they may not be available to fix urgent problems. So make sure you hire managed IT staff who are always available to call and ready to solve the issue.
Unlike an in-house IT team, a managed service provider covers only some aspects of technology.
You may have to choose from a list that includes applications you need support for, and when you need something outside the services you have signed up for, you might be in trouble.
Choosing to outsource your IT services can be a great decision, but there are some things you should entertain before making the final decision.
Research your options, and know what to expect from each. Compare things like flexibility, guarantees, expense, skills required to do the job well, etc., before deciding which model best fits your company’s needs.
Moreover, if you want to adopt a model for project scaling where your in-house members cannot deliver the solutions, you can opt for Staff Augmentation. Since it is quick, effective, and cost-savvy, it will live up to your project expectation.
If you’re looking for a loyal partner that can provide diverse skills to support your product development efforts, then Project Outsourcing might be an option worth considering.
If you are still indecisive about which would be the right fit for your project, our team at ValueCoders can help you choose the right staffing solution for your business. Contact us today to learn more.
Frequently Asked Questions
Q 1. What are some of the key advantages of hiring through Staff Augmentation?
Through staff augmentation, you can gain access to valuable expertise and experience. There’s also less startup time and overhead than with a full-time hire. Since the service is time-limited, you’re only obligated for as long as you need and have no additional resources.
Q 2. How does staff augmentation benefits clients?
Staff augmentation services provide clients with access to unique skillsets for short-term engagements, whether the assignment is full-time or part-time.
For example, organizations are increasingly turning to agencies that can supply staff augmentation services to meet their specialized business needs during product launches, marketing campaigns, and other high-profile projects.
Q 3 What is the difference between staff augmentation vs. project outsourcing?
Staff augmentation is when a company hires a staffing agency to find temporary or contract workers for specific jobs. Outsourcing is when a company contracts with another company to provide all or part of their business operations, such as customer service, human resources, information technology, or manufacturing.
Q 4 What is the difference between staff augmentation vs. managed services?
There are a few key ways that staff augmentation differs from managed services:
- Staff augmentation provides workers who are dedicated to your project and fully aligned with your company’s culture, while managed services generally rely on remote workers who may not be as familiar with your business or processes.
- It gives you more control over the project and allows for a higher level of communication and collaboration, while managed services typically provide more oversight and management of the project.
- Staff augmentation is usually more cost-effective in the long run because it allows you to use only the resources you need when you need them instead of paying for a full-time employee who may not be fully utilized.