IT Project Outsourcing vs. Staff Augmentation: Pros & Cons
While some aspects of a company’s IT needs to stay relatively steady such as monitoring systems, data backup, and network management, new or unexpected IT projects can bring a bulk of work all at once. When this happens, many companies have to decide whether they want to outsource the IT project or use staff augmentation to complete the project.
IT Project Outsourcing vs. Staff Augmentation
IT project outsourcing is outsourcing the full project or aspects of the project to an external company while staff augmentation adds virtual resources to the in-house IT team to help manage the workload.
The main difference between IT project outsourcing vs. staff augmentation is who is responsible for project management and who is held accountable for results. In IT project outsourcing, the outsourcing company will manage the project and be accountable for results. In contrast, staff augmentation requires in-house project management and leaves your company accountable for results.
Should I Choose IT Project Outsourcing or Staff Augmentation?
Determining whether to augment your staff or outsource your IT project depends on your current team’s capacity as well as your goals for your project. For companies that have a strong internal IT team and who have reliable, dependable management, staff augmentation may be a good option. Companies often choose this solution when they need to maintain a certain level of control over the project. However, for companies whose IT team already manages a full load and who need a project done quickly and with reduced internal management, IT project outsourcing may be the best bet.
The pros and cons of IT project outsourcing vs. staff augmentation depend on a company’s unique IT situation and project goals. Below, we compare the pros and cons of each.
Pros of IT Project Outsourcing
Companies that have a tight deadline and need to maintain day-to-day core business IT management during the completion of the project may benefit from IT project outsourcing.
– Outsourced project manager. One of the benefits of outsourcing IT projects is that project management is handled by the outsourcing company.
– Requires less training. Unless your company has legacy or proprietary systems, there most likely will be little or no training required for an outsourcing company to complete your project.
– More likely to hit deadlines. With an internal team, deadlines are often more negotiable. However, an outsourcing company’s success depends on reliably hitting deadlines.
– Does not distract focus from core business needs. Since you will not be detracting team members from in-house needs to work on the project, core business IT needs continue to be fulfilled as usual.
– Scales more easily. In times when a project evolves or if more resources are needed than anticipated, it’s often easier to scale using an outsourcing company than staff augmentation.
– Turnover rarely impacts the project. An outsourcing company’s agreement is centered on production, not on which team members are executing the project. This means in the case of turnover an outsourcing company is motivated to fill the position with an internal or external team member as quickly as possible.
– Overcomes lack of internal capabilities. If part of your team does not have the capabilities necessary to fulfill a project, it can often be more cost-efficient to outsource the project than train new skills.
– Decreased management costs. Employees for outsourced IT projects mean no additional management overhead for additional employees.
Cons of IT Project Outsourcing
The main detriments of project outsourcing are that it removes control over the project and often makes it more difficult to integrate with internal systems.
– Less control over the project. Outsourcing IT projects means you have less control over the project. This is because after goals, deliverables, and deadlines are established, the actual execution of the project is up to the outsourcing company.
– More difficult to integrate with internal systems. It can be more difficult to integrate outsourced projects with internal systems. This is because it requires the business to align with the outsourced IT team.
– Smaller projects can be less cost-effective. Outsourcing companies are sometimes less inclined to take on smaller projects or may charge a premium for them.
Pros of Staff Augmentation
Using staff augmentation to fulfill an IT project can be beneficial to a company because it improves control over the project as well as making integration with internal systems easier.
– More control over the project. One reason companies choose staff augmentation over IT project outsourcing is that staff augmentation allows more internal control over the project.
– Flexible deadlines. If your project timeline needs to be accelerated without notice, it is often easier to accommodate this with an internal team than with an outsourced team.
– Better integration with internal processes. Since staff augmentation utilizes your internal team, it becomes much simpler to integrate the new IT project with internal processes.
Cons of Staff Augmentation
One of the main cons of staff augmentation is that it relies in part on internal resources to complete the project. This can increase project costs, management workloads, and can detract focus from your core business needs.
– Higher management costs. Staff augmentation for an IT project means managing the project remains internal. With expanded project needs, this often means increased management costs.
– Can detract focus from core business needs. Staff augmentation blends internal staff members with virtual staff members. Without making additional hires, this usually means your IT team is being pulled away from core business projects.
– Greater training costs. While companies will not have to train virtual staff in technical capabilities when using staff augmentation, there still may be training required to get the employee up to speed with internal processes, tools, and other knowledge.
– Can be more difficult to scale. If there is a change to the scope of the project, it is often more complicated to find or change resources when using staff augmentation.
How Can We Help?
Not sure whether staff augmentation or IT project management is right for your company? Reach out! We are happy to help discuss which option might be the right for you.