Certain elements of a company’s IT operations, like system monitoring, data backups, and network management, tend to remain constant. However, new or unforeseen IT projects can suddenly create a surge in workload. Faced with this scenario, businesses often weigh the options of either outsourcing the IT project or employing staff augmentation to handle the increased demands.
Differences Between IT Project Outsourcing and Staff Augmentation
Outsourcing an IT project means delegating the entire project or specific parts of it to an external provider. On the other hand, staff augmentation involves bringing additional personnel into your existing IT team to manage the increased workload.
The primary distinction between IT project outsourcing and IT staffing services lies in project management responsibility and accountability for outcomes. With IT project outsourcing, the external company takes on the project management and is accountable for the results. In contrast, using staff augmentation means your in-house team manages the project, with your company maintaining accountability for the outcomes.
Deciding Between IT Project Outsourcing and Staff Augmentation
Choosing between staff augmentation and IT project outsourcing hinges on your existing team’s capacity and your project’s objectives. If you have a robust internal IT team with reliable and efficient management, staff augmentation could be a beneficial approach. This option is often favored by companies seeking to retain control over their projects. Conversely, for organizations whose IT teams are already at capacity and require a project to be completed swiftly with minimal internal oversight, outsourcing the IT project might be the preferable choice.
The advantages and disadvantages of IT project outsourcing versus staff augmentation vary based on each company’s specific IT needs and project objectives. Below is a comparison of the pros and cons of each option.
Advantages of IT Project Outsourcing
IT project outsourcing is particularly beneficial for companies facing tight deadlines while needing to sustain their core business IT operations.
- Outsourced project management. A significant advantage of outsourcing IT projects is the management aspect, which is taken care of by the outsourcing company.
- Minimal training required. If your company doesn’t use unique legacy or proprietary systems, training for the outsourced team is typically minimal or unnecessary.
- More reliable in meeting deadlines. Outsourcing companies are often more stringent with deadlines compared to internal teams, where timelines can be more flexible.
- No disruption to core business operations. Outsourcing allows your in-house team to focus on primary business IT tasks, as project responsibilities are external.
- Easier to scale. Scaling the project scope or resources can be more straightforward with an outsourcing company than with staff augmentation.
- Less affected by turnover. Outsourcing agreements focus on project delivery, not specific team members, ensuring quick replacements in case of staff turnover.
- Addresses gaps in internal expertise. When your team lacks certain skills necessary for a project, outsourcing can be more cost-effective than training.
- Reduced management overhead. Outsourced IT projects don’t add to your management burden, as the outsourcing company handles their team.
Disadvantages of IT Project Outsourcing
The main drawbacks of outsourcing include reduced control over the project and potential challenges in integrating with internal systems.
- Limited control. When you outsource an IT project, you relinquish a degree of control, with the outsourcing company handling the execution after goals and deliverables are set.
- Integration challenges. Integrating outsourced projects with internal systems can be complicated, requiring alignment between your business and the outsourced IT team.
- Smaller projects may be less appealing. Outsourcing companies may be less interested in smaller projects, or they might charge more for such engagements.
Advantages of Staff Augmentation
What is the IT staff augmentation benefit? Staff augmentation can be a valuable strategy for IT projects, offering improved control over the project and easier integration with existing internal systems.
- Enhanced control over the project. A key reason for choosing staff augmentation is the increased internal oversight it offers over project development.
- Adaptable deadlines. Staff augmentation can more readily accommodate sudden changes in project timelines, unlike an external outsourced team.
- Seamless integration with internal operations. Leveraging your in-house team through staff augmentation simplifies the incorporation of the IT project into existing processes.
Disadvantages of Staff Augmentation
However, staff augmentation also has its drawbacks, mainly related to its reliance on internal resources, potentially raising project costs and management efforts, and diverting attention from core business activities.
- Increased management overhead. With staff augmentation, project management remains an internal responsibility, often leading to higher management costs due to the expanded scope of the project.
- Potential distraction from primary business tasks. Merging internal and virtual staff members through staff augmentation can divert your IT team from their primary responsibilities unless new hires are made.
- Higher training demands. Although technical training might not be necessary for virtual staff, acquainting them with your company’s specific processes, tools, and systems could entail additional training costs.
- Challenges in scaling. Adjusting the scope or resources for a project can be more complex when relying on staff augmentation, especially in finding or reallocating the necessary resources.