06 Oct Staff Augmentation v Outsourcing: Which is Right for You?
Improving speed to market, driving operational efficiencies and cutting costs. These elements all make up the price of admission if you want to be competitive today. To accomplish this, it typically means meeting a growing number of IT needs that can determine an organization’s ability to deliver projects on time, within budget and to client specifications.
Quickly finding the right resources to both handle your specific IT needs and integrate well within the organization can be a time-consuming and almost impossible task. To that end, more and more project managers, and CIOs are turning to IT project outsourcing and staff augmentation to get the job done right the first time, better allocate their workforce, control costs and mitigate risk.
IT outsourcing and IT staff augmentation can both be cost-effective solutions for providing the manpower to get the job done. While both options can reduce a onetime capital expense by turning it into an operational expense, there are key differences between the models.
To get a better understanding and to help determine which may fit best into your hiring and retention plan, let’s take a closer look at each. Or as
Shakespeare might say, “To augment or to outsource, that is the question.”
IT Staff Augmentation
IT staff augmentation enables a company to add staff to their existing teams where required and based on the skills needed to support their initiatives and business objectives. Essentially a contractor, an “employee” resourced through staff augmentation functions as a member of the organization, takes direction from department managers or other personnel and is paid through the staff augmentation firm.
Staff augmentation allows a company to scale resources to meet changing requirements without the cost and the liabilities of hiring full-time employees. Companies get the help they need when they need it and can terminate the “employee” assignment on short notice and without cause.
Five Key Benefits to Augmentation
1. Cost Effective—You pay for the work you need, when you need it and the right skills at the right times. Plus, by not paying full-time wages and benefits, you cut costs in both the short and long term.
2. Flexibility—With the technology world ever evolving, adjusting internal processes and adapting to unexpected change is more necessary than ever. Staff augmentation keeps you ahead of the curve and allows you to ramp up the intensity of your staff’s workload as needed.
3. Control—IT staff augmentation gives you control over who is doing what work—who is doing the important work, who is delegated minor tasks and who has control over important and/or time sensitive projects.
4. Access to Skilled Manpower—Augmenting your existing staff with skilled and trained IT professionals, allows you to keep things in-house and completely under your jurisdiction.
5. Counteracting Attrition—As the economy continues to improve, studies show that employed IT professionals are likely to change employers. As attrition becomes a side effect of an improving economy, IT staff augmentation can solidify staffing needs.
IT Project Outsourcing
IT project outsourcing allows a company to execute entire projects using the services of an IT outsourcing services provider—allowing a company to concentrate their existing resources on their core competencies.
Outsourcing tends to focus on services and processes rather than individuals. Detailed management and direction are typically provided by the outsourcing services provider and measurement is typically not of individual tasks, but rather of compliance with service level agreements (SLAs).
Five Key Benefits to Outsourcing
1. Increase Efficiency—IT outsourcing providers allow you to make the most efficient use of your time and can give you a competitive advantage with cost structure and economy of scale. Typically a provider can deliver a staff of skilled IT professionals with varied expertise for the cost of one in-house employee.
2. Reduce Labor Costs—IT outsourcing providers are responsible for providing the right people for a project and keeping them up to speed on the latest technology, saving you the time and expense of hiring and training IT staff.
3. Start New Projects Quickly—Internal IT projects can take months to get off the ground. IT outsourcing providers have the knowledge, experience and resources to start new projects immediately.
4. Focus on Your Core Business—When it comes to time and staff, companies have limited resources and those resources are better spent focusing on the core competencies that produce revenue. Outsourcing IT allows you to focus on long-term objectives and serving your clients’ day-to-day needs.
5. Reduce Risk—With technology changing what seems every minute, unless technology is your organization’s area of expertise, IT outsourcing providers are more qualified and equipped to adapt to these changes and assume and manage the risks associated with them.
Choosing the right approach can be a complex process. When in doubt it may be helpful to speak with an IT consulting firm. And remember for most companies there is not a one-size fits all and a hybrid approach—leveraging both outsourcing and augmentation—may work best to deliver the desired results.