IT Staff Augmentation vs Outsourcing — Which is Best for Your Business?

Competenza Innovare
5 min readFeb 16, 2023

Through IT staff augmentation and outsourcing, an organization can access the skills and expertise they need to support their IT operations. There are a few fascinating global statistics that are related to both models:

  • As per the official data of Statista.com, the global revenue of IT outsourcing is forecasted to reach US$430.50 Billion by the year 2023.
  • As per the RioTimes, the market of IT Staff Augmentation will reach the value of $81.87 Billion by the year 2025.

After an official global comparison, the United States will be the top country for generating revenue from IT outsourcing. It is forecasted that the United States will generate a revenue of $ 156.20 Billion by the year 2023 in the IT outsourcing segment.

Comparison between IT Staff Augmentation vs Outsourcing

Which one is best for your business?

Here are some key points to consider when comparing IT staff augmentation vs outsourcing:

IT Staff Augmentation

  • It focuses on bringing-in additional employees to work alongside a company’s existing staff
  • You can hire a dedicated remote team on short-term bases and contract bases.
  • IT professionals are managed by both: the company that is giving the contract as well as the company which is taking the contract for hiring autonomous IT teams.
  • It is more flexible in terms of the skills and expertise needed.

Outsourcing services

  • It involves transferring certain IT functions or processes to an external vendor.
  • Companies are required to assign a complete project to the agencies rather than hiring the on a contract base.
  • The vendor is responsible for managing and providing the resources needed to perform those functions.
  • It is completely in the hands of the vendor to appoint employees with specific skills or expertise to handle the project.

IT Staff Augmentation VS IT Project Outsourcing

Both models incorporate specific key differences and it is important to conduct a comparison before making a judgment about any IT working models. The below discussion will incorporate a brief discussion about the suitability of both models by evaluating 5 diverse elements:

#1: Degree of control over the operations

IT Augmentation

  • If you choose to hire on-demand IT resources then you can interact or communicate with their team members.
  • You can even take the INTERVIEW of the candidates before assigning them a contract. IT Staff augmentation companies offer you the opportunity to check the candidature or suitability of the workforce.
  • There is a high degree of control in this model.

Outsourcing

  • In most cases, you cannot interact with the team members of the vendors.
  • You cannot take the interview of the candidates. It completely depends upon the vendor which type of candidates they find suitable for completing your project.
  • So, there is no degree of control over the operations during outsourcing.

#2: Market Trends

IT Augmentation

  • It will grow at a CAGR of 3.53% during the five-year forecasted period from 2021 to 2025.
  • The average salary in the staff augmentation company is more than $50,000 (till December 2022) in the United States.

Outsourcing

  • It is forecasted that the outsourcing model will grow at a CAGR of 8.07% during the time period of 2023 to 2027.
  • The average salary for an outsourcing employee is $77,254 p.a in the United States.

#3: Benefits of both models

IT Augmentation Model

  • IT staff augmentation allows for a more flexible workforce, as you can scale up or down your IT team as needed.
  • It allows businesses to bring in highly skilled professionals on a project-by-project basis, which can save money in the long run.
  • Access to a larger pool of skilled professionals who can bring a variety of skills and experiences to your organization.
  • Businesses to test out new technologies and processes without committing to long-term investments.
  • This mode can increase efficiency and productivity, helping your organization to achieve its goals faster.

Autonomous Outsourcing Team Model

  • Outsourcing can bring a diverse range of perspectives, ideas, and approaches to a business, which can lead to new and innovative solutions.
  • Outsourcing companies also strive to retain talented and skilled employees so that they can assist their clients in achieving their business goals.
  • Outsourcing certain functions can help businesses manage risk by transferring certain functions to specialized third-party vendors who can handle them more effectively.
  • The vendor takes complete liability for completing the project.
  • It can make the business more flexible and agile methodology.

#4: Associated disadvantages

IT Augmentation Model

  • Communication can be a challenge when working with an external contractor, as they may not be familiar with your organization’s processes and culture.
  • With different remote companies that are working on different aspects of a project — it can be difficult to maintain consistency in the final product or service.
  • It can distract your focus from your primary business functionalities.
  • This approach is costly as compared to the outsourcing model. However, this approach is cost-effective when compared to hiring in-house team members.
  • Only assign the contract to the trusted staff augmentation company because unreliable companies increase the probability of causing data breaches.

Autonomous Outsourcing Team Model

  • Your business may become dependent on outsourcing, which can arise a challenge if the vendor leaves.
  • The vendor’s employee may not be committed to showcasing the utmost dedication towards your project as compared to your in-house employees.
  • If the vendors eliminate the expenses by not investing in the training & development of the employees then it can adversely impact your project.
  • Small projects may not be cost-effective.
  • Lack of adequate IT resources then it can be difficult to run projects delivered by the vendor.

#5: When to choose — evaluating the perfect time to use specific models

IT Augmentation

  • IT Staff Augmentation is usually chosen when a company needs to temporarily increase the IT workforce to handle specific projects.
  • As a result, companies can maintain knowledge of their systems while maintaining greater control over their development process.

Outsourcing

  • When a company wants to utilize a third-party provider to manage and maintain a company’s IT systems and processes.
  • It is suitable when a company is looking for long-term IT solutions.

The Final Words

Outsourcing teams can be more cost-effective and provide access to a wider range of skills and expertise. However, outsourcing carries the risk of losing control over the quality of work and the security of data.

Staff augmentation allows companies to maintain control over their IT operations and ensure that work must be done through in-house team members. So, both approaches incorporate their own benefits and drawbacks.

Ultimately, the decision of whether to use staff augmentation or outsourcing will depend on the specific needs and circumstances of each company. For IT staff augmentation services, you can connect with Competenza Innovare Pvt Ltd.

Source: Post originally published here.

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Competenza Innovare

Remote IT Staffing, Custom ASP .NET solutions, Android & iOS app development are our specialties. We provide insightful articles on various tech topics.