At present the companies from different industries consider the most efficient methods of cutting the costs, making the entire workflow more productive and time-effective.
And, according to the technology development nowadays, the recent research by Bill Gilet shows that the framework of the workflow organization is mostly focused on automation and upskill.
To achieve that, organizations usually consider various options of outsourcing engagement models, such as strategic sourcing, co-sourcing, staff augmentation, or even outsourcing.
For IT outsourcing, the last two methods are considered to be the most popular methods, but which one is more efficient for the tech companies?
The answer is already here!
What is Staff Augmentation?
In 2019 the total value of the outsourcing market size has reached over $520.74 billion. After the Covid-19 pandemic hit, these numbers have been only increasing and due to the present development of IT outsourcing, the revenue forecast for 2027 is approximately 937.67 billion U.S. dollars.
This factor, as well as the high demand for professional developers, makes IT outsourcing more and more attractive for global organizations to employ. One of these models is staff augmentation.
According to the PwC, staff augmentation is the temporary outsourcing engagement model that helps to depute internal audit staff during the temporary resource crunch.
As a rule, companies involve the new employees for an estimated period of time without any long-term promises.
The main benefit of staff augmentation for the companies to get is winning some more time for picking a more experienced replacement by out-tasking the company’s projects to the temporary workers.
What Is Outsourcing?
Unlike the previous type of outsourcing engagement, after involving the staff augmentation model, the company starts gradually transforming to the main outsourcing model.
In fact, that is the model based on the managed services and can provide more flexibility and skillful developers for the organizations than the IT staff augmentation.
Besides, this type can provide the companies with a more effective solution for reducing the expenses with getting the same performance quality and even more volume of the work done.
Thus, over 70% of the cost reduction decisions come for the cost reduction reason according to Deloitte.
In this case, the service provider will offer the company a certain outcome for a defined price. Whereas the organization has to define the list of requirements on these services and performance criteria points.
Staff Augmentation VS Outsourcing - the Main Difference
To see the actual strong and weak points of each option, let’s compare the pros and cons of outsourcing models. So, staff augmentation VS outsourcing — which one is best?
Benefits of IT Staff Augmentation
Staff augmentation is the best option for your company if you want to:
- Put all the risks for the work done on your organization (the client);
- Vest all the knowledge and important information in the individual (without any documentation);
- Require limited out-tasking and work on the projects on a short-term basis;
- Pay for the hours worked and the project’s availability;
- Have to be responsible for the service delivery model, the process organization, and working tools;
- Need to quickly fill the in-house temporary resource crunch;
- Implement the supplemental staff to the direct interaction with your in-house team, with dividing all the tasks within one team.
As you can see, the staff augmentation model is supposed to be implemented directly to your company’s permanent workforce to provide them with additional assistance on the short-term projects when you have to quickly resolve the lack of labor or find a temporary solution until you find the right candidate for hire.
Benefits of Outsourcing
However, a great number of companies still prefer getting the permanent option for employee sourcing. That is why, we should also check the main benefits of another type — managed services model (or as it is also called — outsourcing).
Here are the main benefits of outsourcing:
- All the risks for the workflow performance and results transferring are put on the service provider;
- Different knowledge is documented and can be easily transferred;
- Provider is responsible for the service delivery, and some of the projects (not the parts of it) can be transmitted for completion;
- Work is paid according to the service type and volumes of the tasks;
- The provider gets control of all the processes of the execution component of IT;
- The provider manages the service delivery model, internal processes, and tools.
In general, this model is more suitable for project outsourcing, when the company needs the work to be completed from scratch.
Furthermore, it is mostly employed by organizations that require constant task performance and don’t plan to find better candidates later.
How to Choose the Best Option?
Thus, after comparing staff augmentation vs outsourcing, it’s time to answer the question: which one is your choice?
In fact, both models can be utilized for getting the most of the employee outsourcing. The core factor is the basic needs and targets of the company: if you’re waiting for the outcome of your outsourcing process then the project outsourcing model will fit the bill.
However, if you’re looking for temporary additional input to your company’s existing team until you find the appropriate candidate for the permanent basis then it will be more rational to consider the staff augmentation.
To sum up, both staff augmentation and outsourcing can be the winning solution for IT outsourcing. The key idea of each method is to cover the resource crunch for different terms, which plays a critical role in the company’s final choice.
And, after the detailed comparison of the staff augmentation vs outsourcing, it becomes quite clear that the first one provides an input to the customer, while the second one delivers an outcome.
No matter which one you’ve decided to choose for your company, the key to success still implies getting a dedicated development team.
With this important factor employed, your company can get the most cost and time-effective solution that perfectly fits all its targets and needs.
At Intellectsoft, we provide various organizations and their workforces with innovative solutions and approaches for getting the most effective performance results.
Do you and your organization want to get a professional digital solution with additional engineering workforce?
Talk to our experts to discover more about the main engagement models, choose the one that fits your goals and learn how your company can start benefiting from it today!