Staff Augmentation vs. Professional Services for Software Outsourcing
Which model works best?
When it’s time to build out a new software product for your company and you don’t have enough in-house talent to allocate for it, the natural solution is to look at outsourcing. But there’s more than one way to go from that decision.
Which kind of outsourcing should you consider: staff augmentation or professional services?
Once you determine a need to outsource a project, the next thing you have to decide is whether going with staff augmentation or professional services will result in a product most aligned with your goals.
So what’s the difference between staff augmentation and professional services?
Staff augmentation is generally defined as IT employees who support projects, build products, or service regular IT needs. Nearshore staff augmentation means you build distributed teams in other countries located within a few hours and in similar time zones. These workers may be offsite, but they are overseen by (and accountable to) existing department management within your company.
Professional services is usually a packaged contract, with a distributed team of experienced IT professionals who are hired for a discrete task, and managed externally by the main contractor.
Each of these outsourcing methods has its different benefits. The main factors you have to consider are
Budget: Professional services costs more because of the external management.
Oversight: Where do you need direct accountability from your team for goals and timelines, etc?
User Impacts: If debugging, updates or other fixes are needed, will the team still be accessible once the ramp-up phase is finished?
Deliverables: How many increments, and in what form do you need them?
What are Professional Services?
Professional services are generally used to solve a specific business challenge. They can be especially helpful if your company does not yet have the skill set or infrastructure in-house.
Professional services typically provide defined deliverables at the end of the contract, such as:
Major IT implementation, such as an ERP system
Merger / Acquisition
Migrating the entire company to a new version of Windows
Performing a review of systems architecture, pointing out where the company is at risk
Professional services are typically more expensive than staff augmentation because you receive a more comprehensive form of services. They provide you with the whole product and help oversee its implementation. Professional services can be used for short-term or long-term projects, depending on need.
What is Staff Augmentation?
The times you may prefer staff augmentation are when you have a special need for a new product or a business spike.
The individuals you hire to augment your staff can jump in and get to work right away without needing to be onboarded or walked through your team processes.
Staff augmentation is helpful when:
You have a talent shortage but already have management in place that can provide project oversight.
You need limited manpower, i.e., an individual or a small group rather than a large team
You want to be able to insert them into your existing structure.
A good interim solution if you’re not sure: If you are considering increasing your team but are not certain you have a long-term need, staff augmentation can be an excellent way to test a larger staff before making a direct hire.
Staff augmentation can help you tackle specific projects, but may not be ideal for a discrete strategic deliverable such as a report.
Using staff augmentation can be more expensive than professional services, but costs less than hiring in-house employees, and you keep a lot more control over the workflow. The problem for most North American companies is high turnover rates among programmers. The constant overhead costs of onboarding and offboarding employees makes staff augmentation an attractive alternative.
Jobsity is a good example of the staff augmentation model. Jobsity’s assigned team members report to the client’s CTO or CIO. And we have very low turnover, so you get an even more stable team than if you hired in-house. Because of our chill working environment combined with a strong work ethic, our retention rate for programmers is 1.5 - 2X higher than in most North American firms.
We generally work on a fixed monthly rate, starting with a risk-free trial in the form of a 30-day satisfaction guarantee, where you can back out of the contract with no obligation.