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Staff
Augmentation

IT staff augmentation allows a company to add staff to their teams based on the additional skills required to support their initiatives. Resources are employed by the staff augmentation firm.

Pros

Control over staff

When there is a need to closely manage resources, staff augmentation is ideal. Integration with internal processes: Companies can find it more effective to integrate staff augmentation resources with existing business processes than to align those processes with external project teams. After all, an individual can adapt more quickly to the processes of an organization than two separate organizations can align with each other.

Leverages existing resources

By adding new skill sets to the team, a company can take advantage of both external and internal resources for the completion of their IT projects.
Specialist expertise: When project team gaps mainly consist of specialized skills, staff augmentation can efficiently fill those gaps.

Rapidly changing staffing needs

Companies with staffing needs in constant flux can meet those needs through staff augmentation. It’s relatively easy to add or subtract resources to match demand.

Reduce cost of acquiring skills

Avoids the cost of investing in internal skill development.

Reduce employer burdens

Avoids costs and liabilities of direct employees.

Meet aggressive project timelines

When an active project has a need for more resources in order to be completed on time, staff augmentation is typically the best option, and is often the only option.

Internal acceptance

Existing employees often embrace a staff augmentation model more than a project outsourcing model. Existing employees are less likely to feel threatened by augmenting staff with a few individuals than by outsourcing entire projects.

Ease of adoption

It’s easier to adopt a staff augmentation model than a project outsourcing model. Companies are already used to hiring employees. Staff augmentation is just a small shift from what companies already do.

Cons

Can still be training intensive

Although companies avoid the cost of training staff augmentation resources in the skills they are bringing to the table, there may still be training involved in bringing resources up to speed with the company processes, tools, and general domain knowledge.

Reliance on internal processes

If there are flaws in internal processes, staff augmentation resources will be affected negatively by these just as internal employees. Companies with process flaws are typically not going to enjoy the benefits of implementing industry best practices through staff augmentation.

Lack of economies of scale

As a company’s need for more resources grow, the cost structure doesn’t typically improve in a significant fashion, since resources are added incrementally and rates are typically negotiated on a per resources basis.

Management overhead

Adding resources through staff augmentation will increase management overhead due to the increased need to supervise the growing number of staff augmentation resources.

Resource centric model

Ultimately the goal of staff augmentation is to deliver results. While using a quality staff augmentation firm will aid in the delivery of those results, the responsibility for the results stays within the company when using a staff augmentation model. Companies are purchasing resources, ideally high quality resources, but not results. Companies remain responsible for planning and managing the project, tasks, resources and deliverables.

Employee vs. contractor distinction

Companies shoulder the burden of ensuring that their staff augmentation resources cannot be construed as employees.

Outsourcing

IT project outsourcing allows a company to execute entire projects using the resources of another firm. In some cases, this can also take the form of “out tasking”, where specific tasks of a project might be outsourced to a sub team which is staffed and managed by the outsourcer.

Pros

Reduce training costs

Training and skill development is the responsibility of the outsourcer.

Best practices

Taking advantage of industry best practices can be accomplished simply by using an outsourcer who follows best practices. Outsourcers shoulder the responsibility of investing in the adoption, maintenance and improvement of best practices.

Scalability

Just as it is easy to add or subtract staff augmentation resources, it is also easy to ramp up and down with project outsourcing.

Economies of scale

There is significant leverage when negotiating large contracts with outsourcers. Outsourcers also take advantage of their own internal economies of scale for project work within their core competencies.

Reduce management overhead

Management is the responsibility of the outsourcer.

Results centric mode

The responsibility for delivering results lies with the outsourcer. Companies are buying agreed upon results. Outsourcers are sharing in the risk and rewards of the IT project.

Keeps the focus on the core business

Because the responsibility for delivering results lies with the outsourcer, companies can stay focused on the results and their core business.

Employee vs. Contractor

Project outsourcing avoids navigating the legal landscape of employee vs. contractor issues.

Overcomes a lack of internal capabilities

Companies that lack the internal capability to complete certain projects will typically find it more cost effective to outsource their project needs as opposed to developing those capabilities internally. This is especially true for one time and intermittent needs and companies with no IT department or no development staff.

Variable cost structure

Shifts fixed costs (employees) to variable costs (project costs) which change in proportion to the current level of project activity. This improves operating leverage.

Opportunity for legal redress

When a project is performed internally, any project failures or liabilities which arise are the company’s responsibility. When a project is outsourced, contracts are typically structured such that the outsourcer takes on that risk.

Cons

Lack of control

Control of everything from high level processes down to individual resources rests with the outsourcer.

Internal resistance

Some within a company may feel threatened by a project outsourcing model. Although most project outsourcing serves the purpose of overcoming a lack of internal capabilities, some internal employees may be concerned that this model will lead to cutting back internal staff in favor of project outsourcing.

Finding a quality outsourcer

When a company looks to meet a need which is beyond the scope of their core competencies, it may be difficult for them to assess the quality of potential outsourcing firms.

Smaller projects

Smaller projects may be less cost effective under a project outsourcing model than a staff augmentation model. Some outsourcers may be reluctant to take on small projects and may charge a premium to take on such work.

Integration with internal processes

Integration with complex and unique internal processes may be more difficult under a project outsourcing model, which increases demand on Business-IT alignment.

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Contact

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Park 7, Vinhome Central Park
208 Nguyen Huu Canh Street
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HCMC, Vietnam
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