What Is The Difference Between Staff Augmentation And Project Outsourcing?

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When it comes to innovations, contemporary times
have an abundance. Companies are coming up with
products that ease human life. For product
development, businesses sometimes take the help
of outsourcing engagement models. Through these
models, businesses intend to eliminate personnel
costs, speed up a project timeline, or seek
expertise beyond the scope of what their already
existing resources possess and offer. The major
two outsourcing models are Staff Augmentation and
Project Outsourcing. While the former involves
hiring professionals, the latter means hiring a
company or third-party vendor to work on a
particular project.
Staff Augmentation Businesses augment staff
temporarily to fill specific expertise and skill
gaps in the company. Through staff augmentation,
the outsourcer adds a third-party team or
specialists to the in-house team. These
specialists work on the premises of the buyer for
the complete duration of the project. Workers
employed under staff augmentation are employees
of the company till the completion of the project.
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Staff Augmentation service allows businesses to
reduce employment costs and enhance operational
efficiencies. It assists you with finding the
right specialist to progress with your project
or complete it effectively.
Benefits of Staff Augmentation

• More control
• With the physical presence of hired specialists
  on-premises, businesses have direct oversight
  over the working of a specialist and the progress
  of the project. Furthermore, companies have the
  liberty of involving the augmented staff in
  multiple projects, according to the business
  requirements.
• Scaling flexibility
• Through the staff augmentation model, businesses
  enjoy the flexibility of scaling up or scaling
  down their staff/teams. In case a project expands
  or contracts over time, or timelines change, a
  business doesnt need to worry about hiring or
  firing additional
• employees. You simply pick the most suitable
  outsourced people for your project and scale
• according to business needs.
• Reduced hiring costs and retaining efforts
• Since administrative duties are looked after by
  IT staff augmentation providers, a business is
  not saddled with recruiting, hiring, retaining,
  and then incurring expenses on a full-time
  employee. Furthermore, the time and effort put
  into employee retention are saved through staff
  augmentation.

• Expertise
• With staff augmentation, a business does not hire
  a skilled and experienced candidate but chooses
  someone who matches up to or exceeds their
  expectations. This is ensured since with
  outsourced staff, businesses skip that
  trial-and-error stage that might come with
  lower-level in-house hires.
• Better internal integration
• The staff augmentation model enables the smooth
  integration of external hires into an internal
  team for a project, as opposed to working with a
  third-party vendor team. In the latter case,
  there might arise some compatibility issues
  rooted in cultural and technological differences
  between the parties.

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• Drawbacks of Staff Augmentation
• Infrastructure and resource arrangements
• Sometimes under the staff augmentation model, the
  company needs to make necessary infrastructure
  and managerial changes/additions. Businesses need
  to hire or reallocate project managers to manage
  the temporary hires and even provide additional
  office space according to the size of the
  augmented staff.
• Initial training on company workflows
• Although you get the most skilled and proficient
  hires, some resources still need to be devoted
  to training, as well as educating them about your
  company culture, operations, and work ethics.
  This might sometimes slow productivity down, in
  the initial period, until the outsourced staff
  gets a hang of your internal business workflows
  and protocols.
• Complete responsibility and risk
• Through staff augmentation service, businesses
  just get the required resources for a third-
  vendor company. Therefore, the complete
  development process, quality control, and hitting
  the deadlines, are to be looked after by
  businesses opting for augmented staff services.
• Project Outsourcing
• Under project outsourcing, a business takes the
  help of an external firm to complete its
  projects using the latters resources. Sometimes
  only specific aspects of the project may be
  outsourced to an external team while other times,
  the full product development cycle may be
  outsourced. In project outsourcing, the team is
  staffed and handled by the outsourcing service
  provider.
• For companies whose IT teams already have a lot
  on their plate and want to distribute some
  workload, or those businesses that lack a longer
  time window for a project or want minimum
  internal management, IT project outsourcing
  should be the preferred choice.
• Project Outsourcing benefits
• 1. Effective project management

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• outsourcing company to effectively complete your
  project would most likely be little or none at
  all.
• CIO magazine research stated that CIOs find data
  science and analytics positions most challenging
  IT jobs to fill.
• The outsourced project is carried out more
  effectively as outsourcing companies may
  leverage their internal economies of scale within
  their key competencies for a project, giving
  optimal results.
• Reduced costs
• As per the project outsourcing model, the
  responsibility of putting together, training, and
  handling a remote team falls on the vendor.
  Furthermore, the vendor also looks after
  delivery of the final product and meeting the
  quality standards. Therefore, there is no
  additional management overhead for additional
  employees with project outsourcing.
• In fact, in a survey by Statistics Brain
  Institute, 44 of American companies that
  participated said reducing expenses was the key
  reason for choosing the project outsourcing
  model.
• Less turnaround times
• Under project outsourcing, the velocity of teams
  collectively is comparatively higher, and
  therefore, project turnaround time is relatively
  less. While deadlines are often more flexible
  and negotiable with in-house/internal teams, an
  outsourcing companys success is decided by its
  timely deliveries.
• Focus on core business functions
• When a business outsources the product
  development cycle, they have a window to focus
  on more crucial, core aspects of the business.
  Project managers have the room to free up time
  for in-house employees by outsourcing some
  development tasks.
• By distributing the workload of in-house teams,
  the utilization of onsite employees becomes more
  flexible. This way they can be redeployed to work
  on high-priority projects, or projects that are
  focused on or around the companys area of
  expertise.

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If a project grows over time or if additional
resources are required, its easy to scale using
the project outsourcing model. 6. Risk
sharing Usually, under the project outsourcing
model, any project delays, failures, or
liabilities that may arise are the project
outsourcer companys risk.

• Project Outsource drawbacks
• Less project controls
• Since the control of the project lies with the
  outsourced party, businesses lose direct
  managerial control over the project. Outsourcing
  IT projects means leaving the project goals
  execution, workflows, and delivery deadlines, all
  up to the outsourcing company. In case of
  communication gaps, this would turn the whole
  project and experience around.
• More difficult to integrate with internal systems
• It can be more difficult to integrate outsourced
  projects with internal systems. This is because
  it requires the business to align with the
  outsourced IT team.
• Because you give up direct oversight with this
  model, you may run into some quality issues with
  the final product, which can harm productivity,
  as well as general team morale as employees,
  managers, and outsourcing vendors try to figure
  out who is responsible for these issues. Coding
  errors that fall short of your firms rigorous
  development standards, undisclosed technical
  debt, or other technical problems originating
  from an outsourced development team can be
  time-consuming and difficult to resolve.
• Difficulty in finding the right partner and
  kicking off the project
• Companies often experience a hard time looking
  for the right and most suitable outsourcing
  companies. It is important to invest time in
  finding the same and be in constant touch or
  engaged all along the development process to get
  optimal results.
• Furthermore, all aspects and components of the
  outsourced project need to be finalized during
  the planning stage, and legalities and
  documentation must be done and dusted, all
  before the project kicks off.

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Staff Augmentation vs Project Outsourcing A
comparative analysis
Parameters Staff Augmentation Outsourcing
Costs involved The cost of hiring and domain training the augmented staff is incurred by the service provider. Additional Infrastructure and managerial costs are taken care of by the business in case of onsite staff augmentation. Comparatively a lesser costly option, on a per hourly basis. All fixed as well as variable costs involving hired workers are incurred by outsourcing the vendor. Infrastructural equipment and project resources are arranged by the vendor. Relatively costlier option, on a per hourly basis.
Suitability Suitable for small, and short notice projects. Most appropriate to fill specific expertise or skill gaps or put together a temporary team. Suitable for projects that need end-to- end expertise, or are huge in scope. Small projects are less-cost effective under this model. Both short-term and long-term objectives can be fulfilled through this model.
Project management Project management is with the business. No need for constant communication. Project management is with the third- party vendor. Continuous communication is vital for this model.
Onboarding Onboarding is a quick process client gets easy and on-demand access to required resources and skills. Projects take time to take off since both parties have to agree on the idea,
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Which is the best model for your project? Staff
augmentation should be opted for in projects that
only need certain expertise and skill gaps to be
filled or for projects that are not very crucial.
Small projects are catered well by staff
augmentation services as they fulfill the
staffing needs for the duration of a whole
project, certain stages, or for a final software
review. With direct managerial control,
augmented staff resources are able to integrate
well with the internal teams and businesses are
able to scale those resources easily. While
project outsourcing model should be chosen when a
project is large in scope and needs handholding
by experts all through the product development
cycle. In this case, a business should be
comfortable with giving up direct control of the
project. Furthermore, with project risk shared
with the outsourcing vendor, businesses save
hiring, training, and managerial costs, get
higher domain and industry expertise and
experience for their project, and free up the
in-house employees for other crucial business
tasks. While both models, Staff Augmentation and
Project Outsourcing, help businesses to complete
their projects effectively, there are significant
differences in the nature and extent of
engagement under both these models. Their
suitability entirely depends upon the scope and
expertise required for your project as well as
the budget allocated for the project. BigOhTech
provides both, dedicated developers or teams and
also outsourced product development services. We
ensure that client project is completed within
the decided time, meeting the quality standards
and the final product aligns with business
goals. Read more Difference Between Staff
Augmentation And Project Outsourcing