To be able to manage all internal processes and remain focussed on providing top high-quality services, companies are now hiring professionals to provide software development services and businesses.
Software outsourcing allows companies to improve their business service expenses and reduce the daily tasks to improve efficiency in business. In essence, there are two main types of outsourcing options that companies are able to choose from: i.e. staff augmentation and project outsourcing.
Both staff augmentation and project outsourcing offer advantages and drawbacks However, which is the better option to select. In this article the advantages and disadvantages of the two and which one is best for your company.
What is Staff Augmentation?
Staff augmentation can be described as a method of contracting to employ and staff additional employees. This allows you to keep your core team while adding flexible employees. The Wall Street Journal looked at the increasing popularity of flexible contract workers who are outsourced is becoming integrated into workplaces. Connect with staff augmentation and contractors that can provide the highly skilled and equipped worker(s) that you require. Let's say you're working on an idea that requires someone who has specific experience working with specific software, or a developer, designer you're already working with a team who is able to handle the remainder of the load. Instead of hiring an employee on a contract for full-time and paying for their costs, staff augmentation grants you the option of contracting the person you require for that project and at that length of time.
Staff Augmentation - The Pros:
- Staff augmentation companies have an extensive database of highly skilled employees who are fully prepared to be integrated into your team's dynamic internal processes.
- This means that you'll be able to remain in control of your workforce and workflow instead of relying on a company or freelancer who isn't involved in your work. This is especially beneficial when you're certain of your goals and objectives and require a little assistance.
- It is possible to identify the specific capabilities that aren't available to your staff and fill them up with specialists from staff augmentation and vendors, companies. This will also allow you to lower the cost of learning the skills you require, since you won't have to spend in internal development of skills and training.
Staff Augmentation - The Cons:
- You'll have to think about whether your internal processes work in order to meet the requirements of your future plans and objectives. If your infrastructure is not up to scratch specialists will be unable to accomplish their duties and keep to your schedule.
- It is important to determine if you're in a position to manage higher costs given your current circumstances as you'll be accountable for an increased number of employees as well as the integration of temporary employees.
- You are still responsible for the organization, planning of projects, tasks, and plans of your business and staff augmenting is a means of delivering results and resources over a specified time frame, however the final product remains your sole responsibility.
What is Project Outsourcing?
Like the title suggests that, in this case, businesses outsource the entire job to be accomplished. This can include whole projects, or a portion of ongoing projects that have to be completed.
In this scenario, companies end up paying for only the services needed. They don't have to build the infrastructure required if employees are employed on a full-time basis.
In the case of project outsourcing agencies, they must employ, train, and manage the team in order to get the task completed. Companies need to pay no any attention to the infrastructure or the equipment required for work of development and the service they require. There are three ways of outsourcing available:
In-House: the cooperating businesses are from the same country.
Nearshore outsourcing: workers from an area that is in close distance to the client
Offshoring: Collaboration between two companies that are located across a vast geographical area typically on another continent or time zone
Due to the rapid advancement of new technologies with the rapid development of new technologies, technology is constantly evolving, and the IT skills shortage is continuing to increase. For instance, as per Solutions to the UK Skills Shortage, over 70 percent of UK technology firms are facing an IT skills shortage. Additionally, The European Commission reports that the current IT skills shortage is about 600,000 vacant jobs. The issue extends to United States, where The Bureau of Labour Statistics predicts for there will be an IT deficit in U.S. will exceed 1.2 million in 2026.
What can be done to resolve this issue? The most sought-after methods is outsourcing, which can assist:
- Reduce costs
- immediately seek out the help from experts with experience,
- Stop wasting time on recruiting,
- produce satisfactory results within the shortest time frame,
- and many and more.
# Pros of Project Outsourcing
- Overcoming Shortage of In-House Capabilities
Services, software and processes could be required when your company's needs increase however, your employees might not have the expertise and abilities required to use these products. Outsourcing web app development can be a viable alternative to directly hiring qualified personnel to finish a specific project and is especially appropriate for temporary and irregular needs of companies that have no Department of IT, or Development team.
- Access to Global Technical Expertise
No matter where your business has its headquarters, it might not be able to find the right experts locally. One of the greatest advantages outsourcing is that no matter the kind of professionals you require for your work needs, you're almost certain to locate them among the top talent across the globe.
- Increased Business Efficiency and Productivity
Outsourcing projects enable businesses to focus on their primary responsibilities, while also improving their efficiency. It could open up new possibilities regarding improvements to internal processes and automation and assist you in making more efficient use of your internal resources by providing your employees with the chance to focus on other crucial tasks.
#Cons of Project Outsourcing
- Less Control
In this type of engagement, it is not possible to oversee the team who are working on the project, or monitor their activities in a close manner. Instead, you're informed about progress in regular meetings with the service vendor.
- Delivery Time and Quality
Delivery delays in solutions can be the fault of the vendor due to unusual circumstances. Additionally, you run the chance that you will pick a shoddy or unexperienced IT service provider who provides inadequate services. If you work with a reliable firm and ensure that you constantly monitor the outsourcing project's progress, then you are sure to benefit from the advantages outsourcing.
- Intellectual Property and Privacy Concerns
Take extra care to consider privacy and intellectual property concerns when outsourcing project work. These are areas that could cause business risk as you may employ professionals from a different country who aren't abided by the laws in your country.
Staff Augmentation Vs. Project Outsourcing: Comparison Between the Two
We have now looked at what these two terms mean, let's examine the relationship between them on different aspects:
Hiring and Infrastructure Costs
In both models, the hiring of qualified employees falls to the agency external to the organization. The business does not have to be concerned about recruitment or on-boarding of employees.
The benefit of outsourcing a project is that the company doesn't have to think about people's costs of hiring to run the project. Infrastructure costs like offices, systems and the tools needed are as well saved.
It's not the case for the augmentation of staff. In this case, the company would require the management to ignore the process of planning and the progress. The company will also require the infrastructure needed for the staff members who are added to the roster.
Systems, office space and the tools needed are some of the items that are essential for the company to be able to provide.
Training
In both models, the outsourcing companies are responsible for the selection of qualified and highly skilled experts.
After an organization has outsourced the task to an external agency, they don't need to be concerned about the tools used to help develop or make employees more accustomed to the culture of the company.
For staff growth, new hires require an orientation to become familiar with the culture of the organization and work methods. They may not be familiar with the methods of development that employed by the company.
Training employees to meet your needs is an overhead when staff increases are included.
Project Management
Management of projects involves governing how the project progresses.
With an increase in staff and even if the highly skilled personnel are hired from an IT staffing company, they'll have to employ an executive manager for the project. The manager will be accountable for the development of the project, while also overseeing the performance that the group. The team members would have to be accustomed to the manager, and the reverse is true. But, it's simpler to oversee the projects and not be concerned about development of the project in this manner.
When outsourcing projects the outsourcing company has not be concerned about the management of the project or having an administrator. The agency that is outsourced has a team of experts that manages the teams and has knowledgeable managers. These managers have the expertise and knowledge required to manage their teams. They are also adept at the people that they manage, as well as the strengths of their employees.
These agencies have managers and teams who have already identified the most effective method to run the project. As they have likely had similar projects before and have probably an understanding of the best way to approach an individual project to cut down on the time needed to finish the project in time.
Changing Requirements
Project outsourcing demands that the specifications for the project be defined and agreed upon prior to the beginning of the actual project. Small changes or additions may have little effect but any significant change could cause a change in the costing or terms, as well as duration of the project.
As staff numbers increase and changes in the requirements could mean that you have to direct the team in an entirely different direction. The process of explaining the new requirements and then implementing it does not affect the agreement with the IT agency for staffing.
The process is simpler and manageable opposed to outsourcing project management.
Working and Organizational Culture
The place and the people with whom the people you work with can make a difference in the way you work. It's more relaxing to work in a established environment and with people you know close to you.
When outsourcing projects, the staff of the agency is accustomed to the work environment they are in. Even when the projects are different however, they're working together with the same group of employees. This creates more meaningful relationships and understanding among co-workers. They are also familiar with the equipment they must use, thereby reducing the amount of time needed to master the working environment.
An environment that is healthy to work in can lead to higher productivity and a better overall work environment.
With the increase in staff as well as working in a different setting with different individuals requires to be adjusted to in the beginning.
Every company may use different software and may have a different working culture and work environment. Making sense of these elements could result in a lower productivity for the first couple of days.
The employees may not be as enthusiastic about the project or in the team since they are aware that they'll need to be working on another project with a different organization in the near future. This can be demotivating and result in employees not giving100%.
Relationship to The Vendor
It is the relationship that exists between the vendor and the business has an impact on the overall success of the company.
When outsourcing projects the project is more directly involvement of both participants in the project. It is essential to have a close relationship to be able to comprehend the demands of the project better. It is also important to know the limitations of the agency and the agency's limitations to ensure that the arrangement is carried out.
There is greater interaction and collaboration between both participants throughout the course of the project. Both parties are equally concerned with the final outcome and achievement of the project.
The only relationship between both parties is the quantity of staff required and the length of time the business requires them.
These partnerships usually end with the completion of the project. The agency that is providing the necessary personnel isn't as involved in the project's success or demise.
The Key Takeaway
The two methods are attractive;however, they don't reduce the importance of employees in-house. Both models have advantages and disadvantages. One model could be suitable for certain software development company, but may not be suitable for others. It is dependent on the needs and resources available for the particular organization as well as on the specific project.
