Staff augmentation vs outsourcing: Which one is the best option for startup companies

June 18, 2021

As a startup or small company, you should be focusing on making the most of your resources, without spending every penny you have. So, when thinking about getting a software solution, a question comes in mind: Which one is better? Staff augmentation or project outsourcing?

If you don’t know what staff augmentation is, we recommend you put this blog on hold and head over to our previous one in which we talk about what staff augmentation is and compare it to project outsourcing. You can check that out, here.

Now that you’re back from reading that, let’s take a look at these two types of software outsourcing, compare them, and see which one is better for a startup company.

Staff augmentation vs project outsourcing

In case you didn’t know, these concepts are two different types of software outsourcing, the only difference is that one focuses on expanding the current team you have, and the other is based on the idea of outsourcing the entirety of a project.

Through staff augmentation you pull together a team and evaluate their knowledge, capacities and abilities to perform a software development project in order to set which skills are missing and fill in the gap by recruiting a new member (or members)

On the other hand, through project outsourcing, you contract either an offshore or nearshore company that will handle the entirety of the project throughout their own team and resources.

Let’s take a deeper look into the benefits of each one.

Benefits of staff augmentation

Staff augmentation allows you, as a company, to make the most out of your current team and resources, letting you take full control of the software solution you’re developing.

Through staff augmentation you get to add valuable knowledge to your team by making them work with an added member. However, the resources, time and money, come directly from your company.

Amongst the benefits of staff augmentation for startups companies are:

  1. You get a better control of your software development processes: As the responsible for the whole project, you get entire control over your team, the software development method of your choice, deadlines, technologies, everything.

    This is considered as a benefit, specially for such small companies who aren’t familiar with the outsourcing process working with an offshore or nearshore company usually means.

  2. Cut cotting: Since you will be working with your existing staff, and will be contracting an specific member, cost are significantly lower compared to hiring an entire nearshore company.

Of course, this benefit is only really present in small projects with minimal workforce required, otherwise, the cost of hiring individual software engineers or programmers could be much higher.

  1. Enhance your workforce: Last, but not least, staff augmentation gives you the opportunity to add that extra member to your company, making them oficial part of your workforce.

This is a great thing to think about for small companies who are still in the lookout for experts software developers and would rather keep on evolving through time.

When is it a good idea to go for staff augmentation

Again, staff augmentation isn’t for any type of company or every type of project. Actually, choosing staff augmentation over project outsourcing for big, complex projects could be counterproductive. Big, complex software development projects require the use of heavy hardware equipment, software premises and the knowledge of experters engineers, developers, programmers and QA’s.

If your company is barely starting, taking on such a huge project with a limited staff and new members could result in great losses of time, money and resources. We truly recommend going for this option only when talking about a small project.

Project outsourcing

Project outsourcing allows companies to outsource the entirety of their software development process to an offshore or nearshore company for them to take on the project and create software solution.

We have talked many times about the difference betweens offshore and nearshore solutions which you can check out here if you want to. However, we’re not going to discuss those differences today.

Instead we will focus on the benefits project outsourcing as a whole can bring to a startup company:

  1. Cost effective: Hiring a team of professional developers who will come back with an excellent software solution for your company isn’t cheap, but rather cost effective.

It’s better to invest on a solution that will ultimately profit your company and benefit from that, than lose time and money hiring new staff members who don’t have the required knowledge or experience.

  1. You get to outsource the whole project: Startup companies usually don’t have the space, knowledge or team to take on software development processes, but nearshore companies do.

This way you get to outsource the whole project without having to invest time or precious resources. It is still your requirements, but someone else is doing the heavy work for you.

  1. Maintain total control throughout the process: Being involved in a nearshore solution doesn’t mean you lose control of the project. Actually, for this type of working relationship to work you have to be involved in every step of the way.

When is it a good idea to go for project outsourcing

If you’re a startup company who needs a complex software solution, you best option is to outsource the entirety of the project and work with a nearshore company.

This way you get to work with expert software engineers and developers, have access to their knowledge and work team, and won’t have to put your actual time and effort into a complicated process.

Although staff augmentation might work for medium and big companies who already have the team and knowledge to start off, it won’t be as great for smaller companies like yours.

Yes, project outsourcing means investing more money, but it also means getting faster and better results, which your company needs. So don’t doubt about it, and contact us if you’re looking for a nearshore company to help you out!