Staff Augmentation vs. Software Outsourcing: Which to Choose?

The talent-strapped IT sector relies heavily on staff augmentation and outsourcing to plug resource gaps. Market forecasts reflect this massive demand.

Staff augmentation, in particular, is in demand more than ever, as 76% of companies in the information technology industry are struggling with talent shortages. This struggle to fill roles means the tech outsourcing market may grow to $512.5 billion in 2024.

Both staff augmentation and project-based outsourcing deliver on-demand specialized support if you’re facing a skills crunch and/or a looming deadline. But which one should you use?

In this blog, we explore staff augmentation vs. project outsourcing — their strengths, limitations, and differences — to help you pick the model that best meets your requirements.

Table of Content

• Outsourcing vs. Staff Augmentation vs. Consulting
• Differences between software outsourcing and staff augmentation
• Defining Staff Augmentation vs. Software Outsourcing
  • Staff Augmentation
  • Software Outsourcing a.k.a Project-Based Outsourcing
• Pros and Cons of Staff Augmentation
• Pros and Cons of Software Outsourcing
• Which Model Is Better?
• Choosing Between Software Outsourcing vs. Staff Augmentation

A Note About Outsourcing vs. Staff Augmentation vs. Consulting

Before we go deeper, let’s distinguish between software outsourcing and consulting. These two terms are sometimes used interchangeably, but they are fundamentally different.

• Outsourcing means sending your project to an external team that transforms it from idea to reality. You’re essentially hiring a team of experts to take care of every detail and deliver a polished, finished product.

If you were to outsource an app, for example, you would specify your requirements and then let a third-party company take over the project — from design to coding to the final touches — and step back until the app is ready for the market.

• Consulting means getting insight from seasoned professionals who can guide you through complex decisions. These experts evaluate your situation and then provide strategies, tips, and an action plan, but they need to engage in the actual work. Consultants simply provide the roadmap and leave your team to execute.

If you were developing an app, consultants would guide you on the best tech, design approaches, and project management practices. It’s up to your team to build the product.

You can think of staff augmentation as a hybrid of outsourcing and consulting. It allows you to inject your team with some extra muscle — expert skills and experience you might be missing — without committing to full-time hires.

In an app development context, this could mean bringing in a small group of ReactJS developers to work shoulder-to-shoulder with your team.

They blend into your operations and share their know-how while you stay firmly in the driver’s seat and steer the project forward.

Real Differences Between Software Outsourcing and Staff Augmentation

Now that we’ve clarified these key terms, let’s quickly compare software outsourcing development and IT staff augmentation: 

	Staff Augmentation	Software Outsourcing
Definition	Hiring external tech talent to collaborate with your in-house team	Engaging a specialized company to manage a project from planning to completion
Ideal use	Filling skill gaps or boosting in-house capacity	Seeking specialized guidance and execution for a complete project.
Advantages	More cost-effective than in-house hiring Scalability and flexibility Enhanced control over team management	Access to specialized expertise Defined timelines and project plans The outsourced development team assumes the risks
Disadvantages	Potential integration challenges with in-house teams Requires additional effort to manage and ensure seamless integration with the existing team	Higher costs due to specialized team hiring Reduced control over day-to-day operations Limited flexibility to alter project scope mid-development

Defining Staff Augmentation vs. Software Outsourcing

Key takeaway: The main difference between staff augmentation and outsourcing is control. Staff augmentation gives you direct oversight over the project. Augmentation vendors provide the personnel, but your team leads and manages them. In contrast, IT Project Outsourcing vendors take end-to-end responsibility and manage the project from start to finish.

Staff Augmentation Meaning

Staff augmentation temporarily expands your team with outside experts to complement your current skill set so you can ramp up your capacity. They work alongside your team only for the length of time that you need them.

These experts have been vetted and chosen specifically for their skills, so you can count on them to adapt quickly to your workflow and add value to your project immediately.

Software Outsourcing Services Definition (a.k.a. Project-Based Outsourcing)

Software outsourcing means giving your project to external experts who handle every aspect of development from start to finish.

They design, build, test, and deploy the software product, ensuring it meets your requirements and industry standards, end-to-end.

Pros and Cons of Staff Augmentation

Staff augmentation can inject new energy into your project to help you meet deadlines and/or build complex features. But every approach has its upsides and downsides.

Here’s a super quick look at the top pros and cons of staff augmentation:

Pros of Staff Augmentations	Cons of Staff Augmentations
Helps you save on hiring costs	Communication mix-ups can happen
Lets you adjust your team size as you go	You have to manage the augmented staff
Gives you access to worldwide talent — including Brazil, home to a booming IT workforce of 1.2 million.	–

Read more about the benefits of staff augmentation.

Pros and Cons of Software Outsourcing

Outsourcing hands the reins of your project over to another company. It can be a force multiplier for highly specialized projects, but it comes with its own set of trade-offs.

Pros of Software Outsourcing	Cons of Software Outsourcing
Expertise when you need it: Access a team with specialized skills beyond your in-house capabilities without recruiting and hiring them full-time.	Higher costs: Outsourcing can be more expensive than staff augmentation because the vendor takes care of everything, including quality assurance and development infrastructure (servers, software licenses, and other tools needed for the project). To avoid surprise costs, clarify the project’s scope and the costs of potential additional charges from the outset.
Project control: Even though you don’t manage their day-to-day workflow, your outsourced IT team follows the roadmap and schedule you set. This is why it’s crucial to establish well-defined requirements, quality assurance processes, and timelines before the project starts.	Less in-house control: Outsourcing does not provide granular control of staff augmentation. If you want to maintain oversight, establish regular check-in schedules and detailed progress reports before starting.
Risk mitigation: You can tap into your outsourcing partner’s expertise and resource pool to mitigate development risks like technical roadblocks and staffing limitations. This frees you up to focus on core business strategies.	Less flexibility: Because agreements and milestones have already been set, there’s less room to adjust the team or project scope as things progress. Changing requirements mid-development can lead to delays and extra costs. To prevent problems, incorporate flexibility into your contracts where possible.

Project-Based Outsourcing vs. Staff Augmentation — Which Is Better?

After weighing the good and the bad, you’re now ready to make a choice that suits your project. Should you integrate new talent with staff augmentation or go for the full package with outsourcing? Let’s explore scenarios where one strategy might outshine the other:

• For short-term projects and flexibility
• For specialized skills and comprehensive solutions
• Budget considerations

For short-term projects and flexibility

Does your internal team need a quick boost to implement a new feature?

Staff augmentation is often better for these types of short-term projects. It lets you instantly onboard specialists to work in tandem with your core team using your established processes and codebase.

This agility can help you deliver the feature on time without disrupting ongoing projects. And because the augmented staff leaves once the project phase concludes, you can easily downscale when you no longer need them.

Real-world scenario: Your e-commerce platform is nearing launch but still lacks a mobile payment feature — and you don’t have the time or the internal expertise to build it. Staff augmentation can infuse your team with experts in the specific mobile payment SDK you wish to use. They can come in and integrate the feature efficiently while your internal team focuses on their current work, so progress stays on course.

For specialized skills and comprehensive solutions

Do you need help designing or developing an MVP mobile or web app within your budget? Or maybe you want to launch a web or mobile app as part of a larger strategy to build out your digital verticals and create a new revenue stream.

Project-based outsourcing may be better if you need a specialized company that can deliver a turnkey solution.

Real-world scenario: You’re venturing into DeFi and need a secure and scalable MVP. Outsourcing to a company with solid blockchain development experience grants you access to specialists who can solve your project’s technical complexities. This way, your team can concentrate on the strategic decisions that will make your app successful, such as developing your app’s core business logic, devising a marketing strategy, and formulating legal and regulatory compliance plans.

Budget considerations

Unless you have unlimited resources, cost will play a big part in your decision. Weighing all key variables alongside your project’s complexity and timeline can help determine which approach is more economical.

Staff augmentation might make more sense if you’re looking to avoid the major upfront costs of complete outsourcing packages. 

In summary, augmentation gives you more precise control over where each dollar goes, as you pay only for the specific skills your project needs at the moment.

But, of course, there’s more to the story. While staff augmentation often offers a lower base rate per developer, you’ll be responsible for tools, software licenses, and potentially managing the augmented staff’s schedules and workload (management overhead). Be sure to factor in these elements when calculating your total outlay.

Outsourcing may seem more expensive initially because it often includes all these elements in the overall project cost.

However, in some cases, it provides better value by covering all aspects of development, maintenance, and support in a single package.

In general, straightforward development tasks with readily available skills might be more cost-effective to handle through staff augmentation.

Alternatively, a complex project requiring a large team of specialists across different areas might be cheaper to outsource (considering the expense of managing such a team internally).

Choosing Between Software Outsourcing vs. Staff Augmentation

When it comes to IT staff augmentation vs. outsourcing, the ideal choice depends on your project requirements, financial leeway, and strategic goals.

Software outsourcing might be the right fit if you need top-tier talent and comprehensive project management.

Staff augmentation may be a better match if you’re working on a short-term project that demands flexibility and day-to-day control.

Cheesecake Labs can help you make the right call. We offer both staff augmentation and project-based outsourcing solutions and can tailor our approach to your specific needs.

Let’s chat about your project and how to make your vision a reality!

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