The difference between Staff Augmentation and Outsourcing a Dedicated Team
With a dynamic business development, IT services are flourishing on a wide scale. Majority of the businesses outsource IT services to save time, costs, and resources, and yield quality results in a short span.
Outsourcing generally refers to the hiring of a third party outside the company to handle the operations of the business more effectively. It is performed to include the global talent pool, access expert solutions, manage time effectively, etc.
As the Outsourcing trend is prevalent in the business world, various enterprises and MNCs are taking benefit of the Staff Augmentation services on a large platform.
Staff Augmentation is a type of outsourcing service, where a software company hires a temporary staff to augment your existing business. It is the inclusion of the top tech talent in your team, who can bring business growth to the next level of success with an expert command over the technological tools.
With a high demand for Staff Augmentation services in the market, it is highly competing with Outsourcing a Dedicated Team. It is collaborating with a remote software company and delegating the tasks associated with the project to its group of programmers.
So, it becomes a little confusing for a majority of businesses which strategy they should adopt to streamline their services. It becomes difficult for them to decide whether should they go for Staff Augmentation or Outsource their dedicated team. Both strategies have their unique advantages and disadvantages. Therefore, businesses need to choose the best approach as per their specific requirements and the needs of the consumer.
In this blog, we will take into account the major differences between Staff Augmentation and Outsourcing a Dedicated Team.
Report by Statista
- In 2024, revenue in the IT Outsourcing industry is anticipated to reach US$512.50bn.
- By 2028, revenue is anticipated to show an annual growth rate (CAGR) 2024–28 of 10.99%, leading to a market volume of US$777.70bn.
- In 2024, the nominal spend on each employee in the IT Outsourcing industry is anticipated to reach US$146.10.
- In global contrast, the majority of revenue shall be produced in the United States (US$185.50bn) in 2024.
Report by GrandView Research
- The global IT outsourcing industry size is anticipated to develop at a compound annual growth rate (CAGR) of 8.0% from 2023–30.
- The developing technology services area is anticipated to grow at a rapid compound annual growth rate of 10.3% during the forecast period.
Staff Augmentation Services
Staff Augmentation is a kind of outsourcing strategy, where a software company offers their engineers in the form of external hire, normally on the grounds of time and materials contract.
In regulation, the in-house development group of the outsourcer is elongated by (or specifically consists of) third-party experts operating on the premises of the purchaser for the time of the project.
Staff Augmentation helps companies minimize costs associated with hiring, payroll processes, and execution of the project. This model is flexible- it is not difficult to finish this type of partnership as compared to finishing the contract of employment, so it is feasible to instantly minimize (or increase) full-time equivalents in case required.
This whole shift of liability helps to minimize formalities with human resources and employment and assists the outsourcer in concentrating more on the primary business operations.
What is a Dedicated Team?
Outsourcing a dedicated team means partnering with a remote software hub and transferring the project to its team of dedicated employees.
Usually, it is a wider partnership than just staff augmentation, because it also involves a large number of services related to software, for eg,-
- Analysis and creativity
- Experience innovation
- Quality adherence
- Project handling, or
- Assistance and maintenance
Due to the heavy engagement of the retailer, the will to achieve success is much larger as compared to the staff augmentation.
It is important with a team that a company can easily access the extra skills, like-
- Data Outcomes
- User Experience
- Software Development
- Cloud Advisory, and
- Security
Comparing Dedicated In-House Teams and Staff Augmentation
Both models provide similar benefits, but it is necessary to compare both models. It will help you to choose the best strategy as per your specific project requirements.
Let’s take a glimpse of a small comparison of the advantages and disadvantages of both strategies.
Liabilities and Costs
In both strategies, the service provider is liable for the hiring and employment of engineers.
Although, in the case, of outsourcing a dedicated team, the retailer also includes the costs of office premises, software authentications, hardware and resources, employee training, and their advantages. They also look for the complete adaptability of the software developers.
There are numerous constituents of cost, which determines the Overall Cost of Ownership for this type of project which the software hub has to handle. After this also, when performed well, this effort leads to high employee commitment and less attenuation rate.
This is for the comfort of the outsourcer, who derives advantages from a contented, inspired, and talented group.
Operational and Organizational Environment
There is also a primary distinction in the context of operational and organizational culture in both strategies.
Working in the same office helps the developers in an outsourcing group to develop a positive culture of information exchange and cooperative attitude. Strong networks of friendships, overall environment, and team bonding cannot be compared to the ones in the staff augmentation strategy.
In addition, the software hub looks for their work convenience, systematic growth of their skills, and guidance, offers all the essential tools and empowers the environment which helps in developing the core of the business.
On the same spot, employees working in the staff augmentation model may not identify themselves with any of the parties, as they know that sooner or later, they shall be operating another project, for a different company. This may act as a negative factor and can be a warning for changing the company.
Project Administration
Project management is generally performed internally by the outsourcer in the staff augmentation strategy, instead of developing the project by external employees.
On the opposite of it, hiring a dedicated team means also recruiting a project administrator. The project manager reduces the project administration liabilities on the purchaser’s part. It is with complete administration responsibility of the project is being taken over by the retailer. There is generally a sole point of contact mandated for the comfort of the purchaser.
The administrative system of the software provider is also an additional feature of project management.
An expert software hub has operated the most effective way of managing IT projects in advance. It also has numerous identical partnerships in the profile database, and normally understands better the way of completing things.
There are numerous other factors also which can be considered in differentiating between Staff Augmentation and Outsourcing a Dedicated Team.
But these are some of the primary factors, which can become the grounds for deciding which strategy to choose amongst the two for your business.
Conclusion
Invedus provides top staff augmentation solutions and the best strategies to outsource a dedicated team. Our outsourcing experts have a lot of experience in managing business functions at a reasonable price. They are also expert in managing time effectively and delivering quality results within deadlines.
You can trust us to avail staff augmentation services or outsource a dedicated team for your business. We provide unique support to businesses to help them grow in the market and make regular progress on a wide scale.
