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What are the Differences between Outsourcing and Staff Augmentation?
Outsourcing and staff augmentation have region-specific roots traced to pre-industrialization times. Both techniques aim to achieve one goal alone – to save cost and enhance and enhance productivity. Over the years, there have been striking differences between both methods and depending on business suitability, a company can choose to opt for one or the other. This article spells out the differences in staff augmentation and outsourcing below. But before that, it is essential to consider the meaning of both concepts.
Knowledge Reserve: All you need to know about Outsourcing and Staff Augmentation
Outsourcing is a business practice where a company hires a third party to provide their services for projects or partnerships. The third party is not an employee of the company but a professional contractor in a sense. Staff augmentation involves employing one or more highly qualified staff to perform a particular task temporarily. In simpler terms, when a company needs more specific skills during the project, such a company appoints a team to take care of the gap. A company may opt for any one of both processes depending on the project and objectives. Nevertheless, it is essential to know both concepts to determine the one best suited at a particular time.
What are the Differences between Outsourcing and Staff Augmentation?
There are certainly subtle differences that a company may want to watch out for. These differences may be pronounced in the type of business model, liability of the employer, expenses, project management techniques, and advantages vs. disadvantages of both methods, as analyzed below.
1
Business Model
As expected, a company must consider its business model when opting for either outsourcing or staff augmentation. Staff augmenting involves using developers unfamiliar with the company’s internal processes . Also, they are only present temporarily until the project is completed. On the other hand, outsourcing involves more permanent employment with a team that has often worked together and is better positioned to learn about the company's needs and affairs over time.
2
Expenses
An employer of an outsourced team may be required to bear the expenses of the utilities and assets the team needs to function effectively. It may also require some costs in training and licenses. Of course, with staff augmentation, there are lower costs and professionalism for a shorter period. Unfortunately, if a company underestimates the length period required for the project, it can incur higher charges in retaining augmented staff.
3
Project Management Techniques
Another difference between outsourcing and staff augmentation is the project management technique involved. For one, staff augmentation requires highly skilled specialists to serve as additional workers where there is a dire need to get the project moving. In outsourcing, the company initially handpicks the team or outsourced company to work on a project or task. Although uncommon, an outsourced team can become augmented where several skills gaps can be filled by employing new hands.
4
Advantages vs. Disadvantages
Staff augmentation is famous for its cost reduction despite having the best professional hands on the project. It also breaks geographic limitations; geo-differences do not restrict a company. As expected, all of these add up to an effective team of experts. Conversely, unlike outsourcing, augmentation can be expensive if the projects drag on for a while. A company may also be required to do extra to eliminate friction from the team.
Conclusion
Outsourcing and staff augmentation are both indispensable techniques for projects and businesses. This article has considered the meaning of staff augmentation and outsourcing. We have also examined their key differences- with no method superior to the other. As such, a company should be able to make adequate decisions regarding the execution of its projects using any of both approaches.
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