Choosing Between Staff Augmentation and Managed Software Projects

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 It today’s high-tech market, we are experiencing rapid changes in both business objectives and technology. Traditionally, companies look to build in-house software development teams but are now facing higher costs while taking more time and effort. The hiring process takes up a huge portion of the timeframe when trying to complete a project and launch it into the market.

On a positive, as the IT industry matures, so do the hiring models. Staff augmentation, or augmented staff) is a hiring model that offers flexibility and high scalability for all areas of the software development project. Between outsourcing and internal recruitment, staff augmentation allows companies to quickly fill vacancies in order to bring about their project and/or digital transformation needs.

In this article, we are going to take an in-depth look at this particular model. We will look at the benefits of scaling your team while avoiding overheads and not increasing attrition or churn rates.

What is Staff Augmentation?

Staff augmentation is an outsourcing strategy, which is used when a company needs additional staff with specific skill sets in order to complete the business objectives. Staff is usually found offshores and hired as overseas development extensions of the already existing development team. Terms and conditions are either fixed or flexible.

Basically, it requires you to continuously look at your in-house team and identify the technical skill gaps throughout each stage of the project. Once you have identified the additional skills you require, you can proceed with hiring short-term (or in some cases long-term) staff to collaborate on the project.

This model is becoming increasingly popular because of the expanding specifics of the IT industry. There is often a shortage of talent and high rates for developers locally. HR issues must be addressed quickly and flexibly in order to hire the right developer.

So, staff augmentation is when certain tasks are outsourced to software experts with both hard and soft skills, and experience so that a business can complete its software project. This is not a replacement method for the existing team, rather just additional expertise from offshore or nearshore software developers.

Short-term Staff Augmentation

This is often necessary when companies are experiencing peak seasons. A project has reached a stage where the in-house team is not sufficient to carry out the tasks. It is also possible to use short-term staff augmentation when in-house specialists are on holiday or sick leave.

Long-term Staff Augmentation

If your project uses an uncommon tech stack or it is more complex, you may need someone long-term. If you don’t have the means to hire an in-house specialist, you can use long-term staff augmentation.

The Benefits of Staff Augmentation

Reducing the skills gap and hiring time

When you are outsourcing, your talent pool has gone from local to international., greatly increasing your chances of finding a developer to match your needs. Typical destinations are those with a large talent pool yet lower demand for developers in that country. This reduces the hiring time.

Because technology develops so fast, look at AI, ML, blockchain, and Fintech, there hasn’t been enough time for the industry to produce sufficient specialists in these areas, resulting in a huge shortage of talent. The longer your company takes to hire an expert the more money you are likely to lose. Quick hiring allows you to get going for your project as soon as possible.

Reducing payroll costs

Once you begin looking at offshore developer rates, you will find that they are generally much lower than rates you will find locally. This can greatly reduce software development costs.

Reducing staff turnover

If you hire an in-house expert developer, you are going to have to make sure they have a continuous flow of tasks to meet their skill sets. In many cases, this is not possible. Your developer will become bored want to move on. When you hire a developer for just the project needs, they will move on when their part of the project is complete, as this was the agreement.

Reducing operating costs

There are a lot of costs associated with hiring in-house, generally more than with external staff. While a staff augmentation provider will charge a fee, the prices are still lower. Paying lower developer rates and a fee is still less than hiring, renting an office, equipment, bills, etc.

Increased flexibility

When you choose this model, you only have to hire developers when you need them. It doesn’t have to be just at peak seasons. You may need a developer to work on your website during the Christmas season.

Reducing paperwork and legal procedures

To hire a development team, you will need an admin, legal department, and payroll and accounting. All of this is going to add up financially.

A staff augmentation provider will do all of this for you, saving you time that can be dedicated to more crucial areas of your business.

How Does Staff Augmentation Work?

It’s a straightforward process involving three main steps, each of which is flexible depending on the needs of your business.

Identifying the skills gap

You need to understand the skills that you are missing in order to complete your project. An internal HR or external agent can then find a developer with the right skill set to hire.

Onboarding of hired employees

Similarly to an in-house hire, the new developer will take go through an adaptation process, meet the other team members, understand the technical concepts of the project and learn more about the company vision and the working environment.

Developing your developer

This process is a continuous one. It requires ongoing training of your developer and nurturing them so that together with the internal team, your project is guaranteed the best outcome possible.

Staff Augmentation vs. Managed Project Services

If you have reached the point where your software team is not meeting the standards, it is time to outsource. From here, you need to choose one of the appropriate engagement models that will lead to the project’s success.

The main difference in staff augmentation and managed project services comes down to accountability. A managed project means that you hire an outsourced team that comes with a project manager. This engagement model lays the full responsibility on the outsourced team, specifically the project manager.

Staff augmentation relies on your in-house project manager to control the project and the outsourced team. Your own project manager is responsible for the progress and completion of the project.

Managed Services Provider

An MSP will take control of the execution of the project and assumes and manages all risks. The provider manages tools, processes, and operational assets. Payment is based on SLAs and results and all developers are fully documented and trained.

Staff Augmentation

The supplied resources are managed by the client and it’s the client who assumes the risk. Internal tools and processes are used. Training will vary and payment is based on time and materials.

What are the Advantages of a Managed Project Model?

Project manager’s availability

You do not need to concern yourself with the management of the offshore team, as your dedicated project manager will do this. This frees up a lot of your time so you are able to pay more attention to the actual running of the business. The PM is responsible for maintaining the budget, meeting set deadlines, and ensuring quality.

Results-based collaboration

Managed IT services can be charged for by the hour. Outsourcing service providers may insist that a developer is hired full time for the necessary duration. With a managed services provider, you can select the number of hours or days per week.

What are the disadvantages of a Managed Project Model?

A lack of control

Most intermediate decisions will be made by the project manager. This not only implies a lack of transparency, but it is difficult for those who like to be in charge of every detail.

Reliability

As you are going to be handing over the control of your project, it is essential that you choose a managed services provider with an excellent reputation, with suitable expertise in your type of project. They must be skilled at working to a budget and a deadline without sacrificing the quality.

Challenges with integration

The part of your project that is being taken care of externally will still need to be integrated into the work being done by your internal team.