In the previous years, outsourcing or hiring a remote team was taboo to many businesses due to its drawbacks and issues. However, due to the rising demand for adequate services and lack of skilled professions, companies have dramatically become reliant on outsourcing workers across the globe.
These days, companies are turning to outsource to reduce operating costs while maintaining the same production level. As a business owner, it is imperative to know when a company should outsource and your choices if you ever decide to do so.
In this article, we will be looking through the difference between dedicated teams and augmentation staff in terms of definition, scope, and pros and cons.
What is Staff Augmentation?
What is considered Staff Augmentation?
To start off, Staff Augmentation is a type of Outsourcing strategy that hires outside personnel to cover for a specific job in your business. Typically, companies hire an augmented staff when there is a spike in demand, and they need an additional hand to complete a project.
How does Staff Augmentation work?
In practice, staff augmentation works well with companies with an already existing team that handles the project. Unlike the typical outsourcing dynamics, an augmented staff is directly managed by your company, like any other employee. Essentially, they are like part of your own staff. You have complete control and are accountable for your performance and workload. They may also require training and additional guidance on some best staff augmentation practices to operate and fit your company perfectly.
However, the key differences are that it costs less. The liabilities associated with hiring an employee are handled by the agency or outsourcing company.
What are the pros and cons of Staff Augmentation?
Due to its flexibility and worry-free hiring, Staff Augmentation is being adapted by more companies. It is excellent for companies with a current team in place but just needed a different hand. Staff augmentation is a creative solution for increasing resources for a short-term capacity. It fills in gaps without worrying over long-term employment commitments. However, every outsourcing model has its own intangible benefits and drawbacks. Below are some pros and cons to dwell on before deciding on hiring an augmented staff:
Pros of staff augmentation
- Easy staff integration with the current internal process
- Specialist expertise
- Low cost and reduced employer burdens
- Flexible for changing needs
- Fast onboarding and reliable
Cons of staff augmentation
- It can be training intensive due to adapting to internal process
- Cost may increase due to demand for tools and service
- Staff may rely too much on internal processes
- Staff issues due to employee vs. contractor distinction
What is a Dedicated Team?
What is considered a Dedicated Team?
On the other hand, Dedicated Team is an outsourcing model that allows companies to hire a team of remote professionals to be integrated into their company. A dedicated team is similar to an in-house team. They are also fully allocated and function the same. The only difference is the unit is located in a different country or state than your full-time employees.
The dedicated team model is great for business owners who need to create a team for a project or new services but do not want to worry about the administrative minutiae that comes with the hiring process. In this model, the dedicated team provider will take care of all of these legalities for you.
The dedicated team is likewise suited for companies with existing projects or tasks out of their current scope of expertise. In IT Outsourcing, a dedicated team typically includes Developers, QA engineers, marketing managers, content creators, and designers.
How does Dedicated Team Model work?
As mentioned before, hiring a dedicated team is similar to hiring a managed service. It is similar to recruiting an entire in-house team without having to stress about the administrative trifles. The dedicated team is usually assembled by the provider from the ground to tailor the client’s project. This team of specialists is chosen according to the needs of the client for their experiences and skill sets.
All the client has to do is scale and strategize the day-to-day tasks and the management of the dedicated staff. The client can choose to handle all the training, job assigning, and managing the whole team or assign the service provider’s project manager to orchestrate everything.
What are the pros and cons of the Dedicated Team Model?
As aforementioned, there are tons of reasons why companies outsource today. Many companies use different models when outsourcing to feed their needs. However, it is essential to first know the pros and cons before using these models.
Although hiring a development team has advantages that the traditional method does not have, not all outsourcing methods are perfect. The development team also comes with its own drawbacks. As such, here are some positive and negative aspects of a dedicated team:
Advantages of the Dedicated Team model
- Cost-effective, with all the recruitment and administrative needs, is done by the vendor
- Unstrict defined Scope and Flexible. Changes can be requested at any time
- Complete control over the management of the team
- Dedicated team members that are focused on your project and follow one business goals
- Continuous communication online and accessible team collaboration
Disadvantages of the Dedicated Team model
- Creating and hiring a crew can take time
- Inefficient for short term projects
- More expensive than another outsourcing model
- It may take too much of your time when dedicating tasks and thinking of ideas
Staff Augmentation vs Dedicated Team: Key Differences and Distinctions
Although both of these IT outsourcing can benefit and support small businesses, it has significant similarities and distinctions. Let’s take a look at the comparison below:
Responsibilities And Costs
In both outsourcing models, both service providers cover the recruitment spends and legalities. However, the dedicated team is purely remote and outsourced from another country. The vendor covers costs of all infrastructures such as office spaces, software licenses, utilities, training, and benefits. On the other hand, you need to integrate the contracted personnel with staff augmentation to your internal employees and office.
Teamwork and Culture
When it comes to collaboration, understanding and having the same organizational culture is necessary. Hiring a dedicated team already comes with the tight friendship, bonds, and spirit needed for collaboration. They are already comfortable working together. The dedicated manager usually handles all the issues that may arise between the team. On the other hand, augmented staff still needs to adapt and integrate with your in-house team. They might find it hard to enter already concrete bonds, and these can cause demotivation to them.
Management and Control
In the staff augmentation model, management, control, and training are usually done by the outsourcer. A dedicated team and assigned project manager can help you plan out and assign tasks. It minimizes your management responsibility and time spent directing the team. In addition, dedicated team members are usually well experienced and efficient in ways of handling projects. The unit can run on its own, even with minimal intervention from you.
Relationship With The Vendor
A solid business relationship is key to a successful business transaction. A close partnership is always formed when outsourcing a dedicated team of professionals due to daily task alignment and collaboration. A dedicated team is usually hired for a longer-term than staff augmentation. On the other hand, staff augmentation services are only availed to sustain a need for an additional hand. Relationships developed are usually temporary and shallow.
Continuity and retention
Knowledge continuity on a project is usually an issue with staff augmentation. Since you only hired the staff for a certain period, your current staff may not be knowledgeable enough to continue what the augmented team started. For example, suppose you hired a software developer via staff augmentation. In that case, the core businesses of the software development may not be familiar to your remaining staff when your augmented team leaves.
You may need to hire a new employee to fill this in, costing you more than what you budgeted for.
Insights And Knowledge
Another disadvantage of staff augmentation is the lack of their long-term vision for the project and your company’s future. Therefore, you can expect them to be proactive and innovative like regular employees would be. On the contrary, a dedicated team usually creates a close relationship with their client. The vendor usually tries to personalize the team’s tasks to something that helps your company reach its goals.
Final Thought – Staff Augmentation vs Dedicated Team: Choosing the Right Method
There are tons of outsourcing methodologies available worldwide; staff augmentation and dedicated team are only two. To put it simply, you need to weigh their differences and choose the right one for your needs.
If you are looking for short-term hiring to fill in a gap in your company, then staff augmentation is for you. It is excellent for companies that do not want to be bothered with long-term relationships and commitment.
On the other hand, hire a dedicated team if you need people to do a long-term project or develop a product for you. You will get an entire group of experts who need little training and assistance when making your product.
Roque Pospos is a digital content specialist for Flexisource IT, a team of Agile experts and certified professionals committed to improving traditional outsourcing practices based in Melbourne, Australia.