Staff Augmentation x Project Outsourcing: Choosing the Best Fit for Your Business

An important factor for a successful outsourcing strategy is to establish the best working model for your context and needs. In this post, we'll explore the differences between staff augmentation and project outsourcing, and list some reasons and characteristics to help you decide which model fits better for your organization.

Clarifying Augmentation vs. Outsourcing

Staff augmentation bolsters your project team with temporary, skilled individuals or teams, complementing your existing workforce. Here are some key characteristics of this approach:

• You own the master work plan. You (or your designated project manager) are responsible for assigning tasks, establishing deadlines, and generally overseeing the work, just like your staff development team. Staff augmentation resources work on the tasks you assign them.
• Staff augmentation typically uses an hourly billing model and is considered a "best-effort" approach. There is no firm price-to-deliverable commitment. You make the assignment, and the contract programmer begins working on the code. Be mindful of cost overruns by monitoring whether the actual time spent on a task exceeds your estimates. Staff augmentation agreements rarely, if ever, place responsibility on the contractor to control time and cost overruns. Almost without exception, staff augmentation uses "time and materials" based pricing.

Why Would You Choose Staff Augmentation Over Software Outsourcing?

Need a quick talent boost without the hassle of lengthy hiring? Staff augmentation seamlessly integrates specialists into your existing team. It's perfect for filling skill gaps and accelerating projects.

Benefits of Staff Augmentation:

• Plug in Specialized Talent: Access in-demand talent in niche areas like emerging technologies or specific skill sets.
• Empower Your Team: Upskill your junior developers through on-the-job learning from seasoned professionals.
• Maintain Control & Security: Keep development processes and data access under your control, ensuring compliance with any regulations (think HIPAA or ISO).
• Cultivate Your Culture: Integrating outsourced teams can sometimes disrupt your company culture. Staff augmentation allows for closer collaboration, fostering a unified team environment where everyone works towards shared goals.
• Flexible Scaling: Easily adjust your team size up or down as project demands fluctuate.
• Fast & Easy Onboarding: Get started quickly with minimal setup – identify the skills you need, agree on a rate, and hit the ground running.

Project outsourcing offers a distinct approach compared to integrating temporary talent. In this scenario, you assign an entire development project, or parts of a larger program, to an outsourcing firm for management.

With software development outsourcing, you hand off the development of an entire solution or a major component to an outsourced team. By contrast, project outsourcing is usually priced in one of two ways:

1. Blended Hourly Rate: In blended rates, technicians with different skill sets work on the project at a common ("blended") hourly rate. Rates can be blended by experience level (Junior, Mid-Level, Senior), roles (Analyst, Architect, Web Developer, Database Developer), or a combination of both.
2. Fixed Price, Milestone-based Pricing: In this type of fee structure, invoicing is triggered when certain key milestones are met, such as the sign-off of a deliverable. In short-duration, strategy-type engagements, your outsourced team may charge a fixed price based on a time sequence, for example, 50% upfront and 50% upon completion and sign-off. Change control is crucial in large fixed-price projects to manage alterations in scope or schedule, which typically result in a change in fees.

Why Would You Choose Project Outsourcing Over Staff Augmentation?

Project outsourcing isn't just for companies whose internal staff can't handle a project. Sometimes, it's a matter of shouldn't. Maybe your team is already swamped with other priorities. Outsourcing lets them stay focused while a partner team tackles your new system.

Benefits of Project Outsourcing:

• Reduced Management Burden: When you outsource a project, you're essentially hiring a partner team. They handle the work plan, budget, and staffing, freeing you up to focus on other things.
• Learn Best Practices: Outsourcing can be a great way to adopt industry best practices. Many companies have learned about agile or DevOps development by outsourcing projects that use these methods.
• Cost Efficiency: Project outsourcing allows you to benefit from economies of scale. Vendor teams can leverage their resources to deliver your project quickly and efficiently.
• Clearer Lines of Authority: Project outsourcing often creates a clearer distinction between staff-led and contractor-led projects. This can be helpful for companies with internal bureaucracy that can slow down staff-led projects.
• Shared Risk: With project outsourcing, the vendor typically takes on more risk for the project's success. The contract will usually outline assumptions and recourse to protect your company.

Novatics unlocks your potential by augmenting your teams with top-tier design and engineering talent. We provide both staff augmentation and project outsourcing models to ensure a perfect fit for your specific context and project needs.?

Your Path to Successful Projects with Novatics

We're the perfect partner to help you achieve your project goals, whether with staff augmentation or project outsourcing, we are ready to support you from conception to launch. Our process supports and guides the entire project life cycle, facilitating interactions between all participants and setting a high standard of quality for all deliveries.

Ready to get started?

Understanding Your Needs & Strategic Planning: Before we get started, we'll work together to understand your desired business outcomes and user expectations, then identify the ideal service (staff augmentation or outsourcing) that aligns perfectly with your goals and project requirements.

Building Your Perfect Team: We'll connect you with the perfect software developers for your project, combining technical expertise and strong soft skills.

Seamless Onboarding: Our onboarding process ensures a smooth integration of your new team members, setting them up for success from day one.

Clear Communication & On-going Support: We prioritize clear communication and regular check-ins throughout your project, ensuring your team delivers the results you expect.

Benefits of Partnering with Novatics:

• Respond quickly to market demands with our adaptable engagement models;
• Access a global pool of pre-vetted, highly skilled professionals;
• Reduce overhead costs associated with talent acquisition and management;
• Focus on your core business while Novatics handles the technical complexities.
• Get your projects launched quicker with efficient team assembly.

For nearly 10 years, Novatics has been collaborating with fast-moving companies, delivering tech consulting with an emphasis on designing and developing software experiences. Our journey has allowed us to collaborate and learn from various companies and leadership styles, revealing how critical the choice to outsource software development can be. I've been sharing some thoughts and learnings in a series of articles, such as cost benchmarking, hiring criteria, risk management, and others. You can check out the guide here .

Contact us today to discuss your project needs!