Staff augmentation vs outsourcing a dedicated team: pros and cons

The two main ways in which software development companies provide their services are through staff augmentation, or outsourcing a dedicated team. Both options are valid, but one tends to be more preferable than the other in specific circumstances. In this article, we’ll look at the pros and cons of each approach, how they differ, and how to choose the best one for your project.

What is staff augmentation?

Simply put, staff augmentation gives you the benefits of a cohesive team without all the hassle of recruitment. You sign a contract with a software development company, and they will provide you with experts that will fill out the skill gaps in your team.

Usually, at the beginning of the cooperation, you should receive the bios of the developers whose experience matches your requirements. Based on these, you can determine whether they will fit your project. Another good practice is to open a channel of communication between your team and each developer that will extend it. You don’t want to constantly go through intermediaries when you want to get something done.

Overall, team extension is a great way to gain access to top development talent quickly. It’s cost-efficient, as you don’t need to spend a lot of resources on recruitment, and often flexible – when your requirements change, your partner will usually be able to supply you with additional experts.

Pros:

• Direct contact among team members ensures knowledge sharing and high engagement,
• It’s a very cost effective solution,
• Due to everyday communication among team members, everyone remains fully informed about the project’s progress and needs.

Cons:

• Team extension requires high involvement from the client’s side in project management efforts,
• Gathering people with the right skills to form the internal team remains the client’s responsibility.

What does outsourcing a dedicated team mean?

A dedicated development team usually consists of developers and a project manager. Sometimes, they will be joined by a designer and/or QA expert. Such a team, provided by a technology partner, will have their own highly effective tools and processes, honed over months and years of cooperation with clients. This can be seen as their main advantage.

When you decide to entrust your project to such a dedicated team, you put a lot of responsibility onto their shoulders. While somebody from your organization might need to communicate with them regularly as the product owner, the team will generally manage themselves according to their best practices, and use their experience to your company’s benefit.

Your relationship with them will be more along the lines of client-providers, rather than employer-employees. Although most software houses will equip you with direct communication channels for all team members, the project manager is likely to take on the role of main organizer and problem solver when it comes to maintaining project momentum. This can be greatly beneficial, particularly when your team doesn’t have much experience in building successful software products.

Pros:

• Much of the responsibility for the project’s success rests on the team – it’s in their interest to be proactive and offer useful advice,
• An outsourced team largely manages itself, allowing the client to focus on core business processes,
• A team sharing the same history and company culture usually cooperates effectively, which speeds up work and allows for a more creative approach.

Cons:

• Because the team is external to the client’s company, they can’t take full ownership of the project,
• A full outsourced team, with a project manager and other additional experts, may be a more expensive option than team augmentation.

What to consider when choosing the cooperation model for your project

While both of the models of cooperation described above are absolutely viable, circumstances may make one more beneficial than the other. IT project outsourcing works well for startups that haven’t yet managed to gather enough internal resources, while development team augmentation can be great for filling in small expertise gaps in an otherwise functional, effectively managed team. To determine which option is best for you, consider the following questions.

What are your short- and long-term project goals?

For example, if you need to build a proof of concept app quickly, you may not have time to gather a team from scratch. In this case, outsourcing will serve you well. But if you’re not in a rush and would rather slowly collect internal expertise, staff augmentation can be the right investment.

What is your current team’s capacity?

If the resources at your disposal are almost enough to reach your goals, there is probably no need to outsource the entire project. Though this question seems straightforward, it isn’t always. It’s important that you carefully consider the costs associated with each option. Dedicated teams can usually hit the ground running and bring results quickly, which may turn out to be less expensive than waiting for an internal team to settle into their roles.

What level of control over the project do you want to have?

As mentioned above, team augmentation gives you almost full control over each team member and their work. On the other hand, if you know you will be busy with a number of projects and processes, a self-managed external team that will proactively seek answers to their questions may be the better option.

Are you bound by strict deadlines?

A big benefit of outsourced teams is that they are responsible for meeting any deadlines they agree to at the beginning of the cooperation. This means that they are uniquely incentivized to work quickly. Additionally, due to the nature of their work, they are very likely to have an arsenal of tools that will help them achieve this goal.

Do you have other important goals to focus on?

Staff augmentation requires effort not only from the people managing the project, but also from the rest of the team and other departments. If your current business situation requires you to focus on other things, it might be better to redirect your team members to these goals, while an external team takes charge of the project.

Do you expect to scale the project up at short notice?

Scaling an internal team means recruitment, which can be costly. An outsourced team, on the other hand, is part of a company that likely already has the expertise you need. They can add new developers to the project quickly, or even recruit new people for your project. In either case, the cost of recruitment won’t affect you. Scaling down is similarly easier through outsourcing, as you won’t need to let people go.

Does your project involve unique internal systems?

If your software project handles legacy code or has unique dependencies, the cost of training an entire external team may not be worth it. Knowledge sharing happens more naturally in the team extension model, which can be very beneficial when you need to handle unusual system integrations.

What is the scope of your project?

If what you need to get done requires only one active software developer, outsourcing an entire team may be a waste of money. Smaller projects require less management, too, so team extension can be a very efficient option in such a scenario.

Do you expect a lot of shifting deadlines?

We’ve already mentioned that outsourced teams work according to an established project calendar. While they can respond to changes, they still need some stability to achieve top efficiency. Augmented internal teams, on the other hand, handle changing deadlines and requirements much better. Crucially, there’s usually no need to amend any contracts.

To what extent does your project affect internal business processes?

An external team working on an app is always going to have a more difficult time communicating with the rest of your company. If you’re building a tool for your team, it may be best to have team members working on it. This way, people who truly understand your company’s challenges and culture will be able to push the project in the right direction. And once the work is done, some team members will still be there to help with training and maintenance.

Choosing the right software development partner

Whether you choose the staff augmentation or the outsourced development team cooperation model, it’s important that your technology partner and provider supports your decision. Many software development companies, DEVTALENTS included, use both of the cooperation models interchangeably. Your partner should be happy to not only focus on your project’s needs, but also advise you on which model will work best, based on their experience.

If you’re interested in consulting your case with software development experts, let’s get in touch. DEVTALENTS have been supporting clients for over a decade. We pride ourselves on always prioritizing business goals and needs, and we have been recognized as Clutch 1000 leaders in 2021.