There might be a number of reasons behind a company’s decision to engage outside help, the most crucial being reducing OPEX and involving experts one cannot find locally. Both staff augmentation and outsourcing are aimed at meeting these expectations. Whatever model you choose, it will affect every element of your project – budget, scope and deadlines. Unfortunately, even with well-defined goals, it’s impossible to tell which model will suit a project best. What matters is making an informed decision, so let’s take a closer look at these alternatives.
Staff augmentation overview
is a way to integrate resources with skills you don’t have on site. For example, NCube, a staff augmentation firm has provided Ukraine-based engineering talent for FlightRight, a tech company from Berlin, Germany. The company had a core development team and was looking for outside help to develop and support their product. As a staff supplier, NCube took care of meeting FlightRight’s requirements in terms of candidates and created a comfortable working environment for the engineers in their Kiev office.
Key pros of staff augmentation
- High level of control
With staff augmentation, the client establishes deadlines and deliverables and has complete control over the processes and outcomes. The client also manages all hired resources closely and communicates with them individually.
- Development velocity
With a broad talent pool and a to choose from, it only takes a few weeks to find and onboard new hires, so with many hands on deck, the client can count on quick project start and meeting tightest deadlines.
Staff augmentation is a way for a company to save on administrative expenses and cut personnel costs like insurance, paid absences, IT infrastructure. These costs are usually included in the rate for each full-time employee.
If there are skill gaps in your development team, they can be easily bridged by adding more hands. It’s also simple to bring in or take away resources according to your project’s needs.
Cons of staff augmentation
No matter how qualified your remote hires are, there still be some training involved in order for them to learn the company’s best practices, tools, and obtain domain knowledge.
- Integration problems
The success of your nearshore approach depends on the integrity of your internal processes. Serious flaws might come in the way of successful integration between the teams. That’s why one needs to make sure the company is ready to take up remote staff and finetune the processes in advance.
- Resources over results
The outstaffing provider can guarantee to bring in qualified resources, but the results of engagement depends on the client who remains responsible for managing the team and the project.
- Requires strong management
Managing remote resources means an advanced level of internal organization – scheduled calls, regular check-ins, and regular on site visits.
Product development outsourcing overview
Outsourcing is about implementing projects relying fully on the resources of an outsourcing firm. Similar to staff augmentation, outsourcing clients can enjoy main benefits like cost-effectiveness and access to world-class talent. While staff augmentation suggests integrating remote resources to an existing team with the aim of working on the project as one, outsourcing means hiring an external team to develop a product from scratch and using their own technical expertise. To avoid the pitfalls of outsourcing, consider its pros and cons.
Key pros of product development outsourcing
- Proven expertise
The best players on the outsourcing market are specialists in their field, which is substantiated by their past successes and certificates. They often work with technology companies on a variety of projects, and so can bring their skills to any software product.
- More time and resources for a core business
This approach offers a client greater flexibility because it allows you to focus on your business processes and increase the company’s top line. You just need to establish deliverables and deadlines and compare the achievements against agreed milestones.
- Results over resources
The provider is responsible for the outcomes of an outsourced project. As such, an outsourcing firm must compensate in case of flaws or missed deadlines.
Cons of product development outsourcing
- Lack of visibility
The provider controls everything – from high-level processes to the employees choice. The solution to this problem may be requiring access to project data, task management tools and code repository.
- Inability to assess the quality of providers
If product development is not a company’s core competence, it may hard to assess the quality of outsourcing firms. What helps leaders make the right decision is checking the company’s maturity, social media activity, and asking for references.
- Lack of communication
Remote workers are often located outside of a client’s country and operate in a different time zone. Sometimes it’s hard to receive a quick update immediately. However, firms usually assign a dedicated project manager to be a single contact point expected to stay in touch with the client all the time.
Both models have their advantages and disadvantages, but it all comes down to choosing the right provider that will help you establish mature development processes and integrate your distributed and on-site teams.