A year after the pandemic forced nearly every industry to go virtual, companies are increasingly investing in digital capabilities to support remote and hybrid work and provide critical continuity. According to Gartner, IT spending is poised to rise 6% this year to reach nearly $4 trillion worldwide.
For many IT leaders, these trends beg the question: “Who’s going to do all this work?”
The accelerating pace of digital can make it tough to maintain in-house capabilities to support every project. Many organizations are also putting a freeze on IT hiring: Only 33% of businesses say they’re using IT budgets for employee growth in 2021, compared with 47% in 2020. With tech demands growing faster than internal resources, businesses are looking outside their four walls to external partners who can help them innovate faster.
When engaging an IT partner, companies typically use one of two models: staff augmentation or project outsourcing. Understanding the distinction between these approaches, along with the potential benefits and drawbacks, can help your business select the best fit based on your own resources and goals.
What it is: Staff augmentation for IT projects involves hiring individuals on a temporary basis to fill a specific need. This delivery model lets you boost capacity and expand skill sets quickly to complete a new project or accelerate the timeline of an existing one.
Under the staff augmentation model, your IT partner provides the talent, while you provide management and oversight of the project. This approach lets you retain control of the project, without the need to hire permanent employees to get it done. The benefits of staff augmentation include:
- Flexibility. Staff augmentation lets you pay for the support you need when you need it. It’s less expensive than fully outsourcing a project, and can also offer savings compared with hiring employees, since there’s no administrative overhead.
- Speed. Recruiting an employee can take time, especially with more companies competing for top-tier talent to complete their IT priorities. A staffing company can provide quicker access to a full lineup of staff with a range of specialized skills. That turnkey access becomes even more important if you need to fill multiple positions.
- Control. If you already have the vision and processes in place, staff augmentation can help you get things done without giving up project control. Many businesses that use staff augmentation have a long-term plan to grow their IT department and just need support in the meantime.
Best for: If you want talent that can quickly integrate into a project or provide support during a specific phase, this approach is for you. Businesses also use staff augmentation for mission-critical projects where handing over control to an outside partner is too risky.
What it is: For businesses that need more holistic support, project outsourcing can be an attractive solution. Under this model, you hire a partner to take an IT project from start to finish.
For businesses that don’t have dedicated in-house capabilities or have too many projects to handle, project outsourcing can help lighten the load. Your partner is responsible for delivering a specific outcome, providing both the oversight and talent to produce the best possible solution for your business. The benefits of project outsourcing include:
- Freeing up internal resources. Outsourcing relieves both your management and development staff from the responsibilities of a particular project. Since your partner manages the project independently, your in-house team has the freedom to focus on other pressing tasks.
- Access to expertise. An IT expert can bring innovative ideas and methods you wouldn’t have considered on your own, resulting in a better overall project. This is especially important if you’re working on an initiative outside your core capabilities, like a mobile customer portal or custom CRM system.
Best for: Project outsourcing is ideal if your business doesn’t have the resources or expertise in-house for a large or specialized project. This approach can also work well for businesses with multiple IT needs, allowing your in-house team to focus on a few key priorities while entrusting others to a reliable partner.
Is staff augmentation vs. project outsourcing right for me?
The right approach for digital initiatives can differ from company to company, and even project to project. When making the call, a few factors to consider include your budget, deadlines, project complexity and priority, required skill sets, related security issues, and current and future staffing structure. An experienced partner can help you weigh the pros and cons to select the best model for your project.
No matter which route you go, communication and transparency are key. Set clear expectations with your partner about schedules, technical requirements and desired outcomes from the start. By ensuring both teams are on the same page, both staff augmentation and project outsourcing can help your team deliver faster on the digital initiatives your business needs to succeed.
Susco Solutions offers both staff augmentation and project outsourcing services to help our clients achieve their digital goals. To discuss which model works best for your next project, reach out to our team.