Staff Augmentation vs Outsourcing vs Hybrid Approach: A Detailed Comparison

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 of 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.

Limitations of Staff Augmentation

• Not recommended for projects that need contextual or deep institutional knowledge.
• Augmentation is always third-party dependent.
• In the case of long-term or ongoing projects, it may be not suitable.

IT Outsourcing Services

When companies need to execute a whole IT project by using the resources of an IT outsourcing 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 of 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 members.
• Access to a global pool of talent.
• IT outsourcing 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 of 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 at 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 which may affect staffing budgets.

Conclusion

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.

If you are looking to adopt a hybrid model, or need staff augmentation services or IT outsourcing, feel free to contact us.