Staff Augmentation vs. Outsourcing: Which Model to Choose?
Updated 14 Oct 2021
9 Min
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Hiring qualified developers is often very time-consuming. Many companies choose to outsource development or attract remote specialists for two reasons — vast talent pool and cost reduction.
By outsourcing software development services, companies get an opportunity to focus on their business goals and increase operational efficiency instead of spending time on recruiting.
Quick stats:
- The global outsourcing market is expected to become $405.6 billion by 2027.
- 65% of businesses that outsource application hosting will increase their outsourcing efforts in the future.
- Ukraine has the most number of IT professionals in Central and Eastern Europe and is popular for IT outsourcing.
There are various outsourcing models, like staff augmentation, project outsourcing, extended team, or hire dedicated team. All these options offer you cooperation with skilled and experienced developers that can build your project, meeting deadlines. However, there are some significant differences between these models that you should be aware of.
Let’s dive into the pros and cons of staff augmentation and outsourcing — the two most wide-spread models.
Diving Into the Terms: Staff Augmentation vs. Outsourcing
Staff augmentation and project outsourcing may seem quite similar. So, which model should you follow?
Staff augmentation vs. project outsourcing
Staff Augmentation
Staff augmentation is perfect for companies with an in-house development team. This model lets them attract people with specific knowledge (industry expertise, technologies) or just extend it with more developers. Companies hire these specialists for a certain time to do the necessary scope of work like releasing a side project or working on a specific feature.
Let’s assume you have a successful digital product that brings your profit. To gain more users, you want to add more exciting features. But your in-house team lacks developers or expertise. Instead of looking for candidates and interviewing a bunch of them, you contact an outsourcing company. The vendor offers you several qualified developers to meet your goals. Then you or your company’s CTO or CEO interview the candidate and sign a contract (if everything works for both parties).
Note! The staff augmentation model does not offer a project manager to manage the development flow. You need a CTO or tech lead with enough experience to control the development on your side.
Project Outsourcing
Let’s finish with the staff augmentation model. Outsourcing means hiring the whole development team from an IT outsourcing company. This approach allows cooperating with all the required specialists, including designers, quality assurance engineers, developers, and project managers.
Here’s an example of a full project team:
- Business analyst
- UI/UX designer
- QA engineer
- 1-2 iOS developers
- 1-2 Android developers
- Back-end developers
- DevOps
The number and roles depend on your project. The outsourcing vendor tends to pick specialists according to your requirements.
How does project outsourcing work?
To offer you the developers with the required skills and knowledge, the vendor must analyze project requirements and single out the ways for further development.
At Cleveroad, we have the discovery phase for that. It consists of the following stages:
- Requirements gathering. Our Business Analyst conducts several meetings with clients to determine all project details. We pay attention to app features, business goals, target audience, and monetization strategy.
- Specification. It’s a detailed document that consists of feature descriptions, required technologies, and their dependencies from each other.
- Wireframes. They stand for a schematic representation of a user interface and a user flow. Designers schematically arrange elements on each screen to later transform them into the final UI.
- Quality assurance. QA engineers need to approve the specification and wireframes. It allows for avoiding logical mistakes and guideline violations.
- Detailed estimate. This document tells about the final time and price of the project development.
Which outsourcing model works best for you? We’ve talked about each type and outlined their pros and cons.
Specification
Choosing Staff Augmentation Model: Benefits and Drawbacks
To help you choose the appropriate model—staff augmentation vs. outsourcing—let’s single out the pros and cons of the staff augmentation model.
Benefits of Staff Augmentation
Full control
Since you manage developers on your side, you have complete control over the development process. You or your tech lead can control every detail of the project. It’s possible to choose the project management tool to track time. As a result, you don’t need to worry about the security of your product.
Flexibility
It’s easy to scale up or down the augmented team. You can hire more specialists to develop the project faster or reduce the number of developers once you’re running out of tasks.
Smooth integration
Since you hire developers with the required skills and knowledge, it’s easier to integrate them into the company’s workflow.
Cost reduction
Choosing a staff augmentation model, you can reduce expenses compared to hiring in-house developers. Depending on the region, you can get lower hourly rates. According to PayScale, developers in the USA get $8,700 per month. On the contrary, software engineers from Eastern Europe get $3,700/month.
Here’s a guide to in-house vs. outsourcing. It tells about the pros and cons of each approach and can help you choose the right one.
Why choose staff augmentation
Drawbacks of Staff Augmentation
Training
Regardless of the developers’ experience and knowledge, they should still spend some time finding out the company’s workflows. The adaptation period can vary, depending on the workflow’s complexity and onboarding process.
Additional load for C-level management
The logic is simple: the more staff is in the company, the more responsibilities the C-level managers have. They need to manage more specialists and provide them with a comfortable working environment.
Staff augmentation drawbacks
Choosing Project Outsourcing: Benefits and Drawbacks
Comparing staff augmentation and outsourcing, it’s time to single out the advantages and disadvantages of project outsourcing.
Benefits of Project Outsourcing
Less training
Since you outsource the whole development process, there’s no need for developers to study your company’s internal processes. They can start to develop the project, knowing your project requirements, and having a specification.
Easy to scale the team
Outsourcing allows for easy scaling of the development team. What does it mean? You can enlarge your team if you need to speed up the development process or decrease the number of specialists if there are no tasks for them to tackle.
Effortless management
Your vendor is fully responsible for managing the team and ensuring that the product will be finished on time. The team has a Project Manager who’s responsible for managing the development process.
Lower cost
The outsourcing region can affect the price. Companies from North America charge the highest rates. On the contrary, Asian software development companies have the lowest rates, but their customer service is often questionable.
| Specialist/Region | North America | Australia | Western Europe | Eastern Europe | Asia | South America |
Front-end developers | $130-$150 | $100-$110 | $61-$80 | $50-$60 | $35-$55 | $45-$80 |
Back-end developers | $130-$150 | $100-$110 | $61-$80 | $50-$60 | $35-$55 | $45-$80 |
iOS developers | $130-$250 | $80-$150 | $120-$175 | $50-$80 | $30-$75 | $80-$120 |
Android developers | $150-$170 | $110 | $120-$175 | $45-$75 | $30-$75 | $80-$120 |
UI/UX designers | $50-$150 | $50-$150 | $50-$100 | $25-$50 | $20-$49 | $50-$150 |
QA engineers | $150-$150 | $50-$150 | $50-$99 | $25-$50 | $20-$49 | $50-$99 |
DevOps engineers | $100-$149 | $100-$149 | $100-$149 | $25-$49 | $25 | $50-$99 |
Why choose outsourcing
Drawbacks of Project Outsourcing
Security risks
Outsourcing usually suffers from a lack of face-to-face communication. As a result, you can’t control the whole development process and may not feel well-protected. How to protect your project idea? You need to sign an NDA agreement with a vendor before discussing your idea. The NDA agreement covers such development aspects as the procedure of data collection, transfer, access, and more. Also, software development companies should follow the EU General Data Protection Regulation (GDPR).
Note! Cleveroad has already developed the system to comply with GDPR and CCPA.
Slower communication
outsourcing can bring you worries about the language barrier and communication problems. Also, if you and your team are on different continents, you’ll face different time zones. To make communication easy and comfortable, you should schedule meetings beforehand. There are a bunch of cool communication tools like Skype, Slack, and Gmail that’d let you keep in touch with the team.
Outsourcing requires a well-thought strategy. There are some problems you may face managing offshore development teams.
Disadvantages of outsourcing
Staff Augmentation vs. Outsourcing: Which Model to Follow?
Both staff augmentation and outsourcing have their advantages and disadvantages. So, the question arises — when to pick the staff augmentation model over outsourcing?
Staff augmentation is the right choice if you:
- Have an in-house team
- Have a CTO, PM, or are tech-savvy yourself
- Don’t have time to spend on hiring and training
- Want to communicate directly with the team
What about project outsourcing?
You should choose project outsourcing if you:
- Want to develop the project from A to Z
- Don’t have time or specialist to manage the team
- Want to have a high-quality product at low cost
- Need tech expertise in a specific area
Why Hire Outsourcing Team at Cleveroad
There are several reasons to cooperate with Cleveroad:
- Dynamic change of plans.
- No recruiting, administrative, and training expenses.
- Extensive experience in outsourcing software development for startups and enterprises.
- Flexible and adaptive way of communication that meets your requirements.
Take a look at our work samples on our portfolio. Or check Clutch, GoodFirms, and Upwork pages to find out what our customers think.
Ready to hire a development team?
Contact us to know more about our specialists and ask your questions.
Outsourcing means hiring the whole development team from an IT outsourcing company. This approach allows cooperating with all the required specialists, including designers, quality assurance engineers, developers, and project managers.
Here’s an example of a full project team:
- Business analyst
- UI/UX designer
- QA engineer
- 1-2 iOS developers
- 1-2 Android developers
- Back-end developers
- DevOps
The number and roles depend on your project. The outsourcing vendor tends to pick specialists according to your requirements.
Staff augmentation is perfect for companies with an in-house development team. This model lets them attract people with specific knowledge (industry expertise, technologies) or just extend it with more developers. Companies hire these specialists for a certain time to do the necessary scope of work like releasing a side project or working on a specific feature.
Staff augmentation means hiring developers with specific knowledge (industry experience, technologies) or just extending the existing team. Companies hire these specialists for a certain time to do the necessary scope of work like releasing a side project or working on a specific feature.
Outsourcing means hiring the whole development team from an IT outsourcing company. This approach allows cooperating with all the required specialists, including designers, quality assurance engineers, developers, and project managers.
Advantages of staff augmentation:
- Full control since you follow every development change.
- Smooth integration. It’s easy to integrate the team into the workflow.
- Flexibility. You can scale a team up and down, depending on your needs.
Disadvantages of staff augmentation:
- Training. The development team needs time to know the internal company’s processes.
- Additional load to C-level managers since more staff means more responsibilities.
Advantages of outsourcing:
- Less training since you outsource the whole development team.
- Ease to enlarge the team if you want to release the app faster.
- Effortless management since a Project Manager manages the development process.
- Lower cost since the outsourcing region affects the price.
Disadvantages of outsourcing:
- Security risks. To avoid this pitfall, you should sign an NDA.
- Slower communication. It’s better to schedule meetings with the development team.
Evgeniy Altynpara is a CTO and member of the Forbes Councils’ community of tech professionals. He is an expert in software development and technological entrepreneurship and has 10+years of experience in digital transformation consulting in Healthcare, FinTech, Supply Chain and Logistics
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Comments
5 commentsSuch an interesting and useful post. Never understood the difference between staff augmentation and project outsourcing. But your text explained everything perfectly. Thanks a lot)
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