We have been talking about software outsourcing for quite some time now, touching subjects such as why you should outsource, benefits of a nearshore solution, and the top outsourcing destinations.
However, there still seems to be a lot of confusion about how outsourcing can be done whenever a company needs a new IT software solution, since most companies thing the only to do this, is to outsource the whole project, and that’s not true.
You see, there are two main methods to get an IT software solution for your company, both of which are a type of software outsourcing itself: One, staff augmentation, and two, project outsourcing.
A quick view into software outsourcing
Software outsourcing is defined as a type of business activity in which a company hires an offshore or nearshore company to perform certain task involved in the process of software development.
To put it in simple words, through software outsourcing companies that need an IT software solution can work directly with software development companies that will carry on their projects and deliver a software solution within the specified due date.
Companies of all kinds and sizes can outsource their software development process for various reasons: One, they don’t have the team or physical resources to carry on such a heavy project; two, they don’t have the knowledge to create such solution, and three, they are looking to cut costs and save up time.
Now, when it comes to software outsourcing, companies can decided whether they want to work with an offshore or nearshore company, depending on what they want or what they are looking for.
We have a blog in which we compare offshore vs nearshore companies, and determine which one is the best option for your company, you can check it out, here.
However, before deciding if you want to work with an offshore or nearshore company, you have to decide which type of software outsourcing method you will be implementing: Staff augmentation or project outsourcing.
What is project outsourcing
Let’s start with the most common method, project outsourcing. Now, this type of software outsourcing is the most common one, in which a company (in this case, the client) contacts a software development company and outsources the whole scope of the project to them.
This means the software development company takes control of the project and puts their own team, hardware and resources in order to deliver the required software solution within the specific time.
For example, we are a nearshore company that specializes on project outsourcing. As a nearshore company, we take care of our client’s projects, develop the required software solution, and deliver a great product for them to use and benefit from.
If you would like to know how a nearshore company works and how we handle different projects with different clients, you can read our blog about it here, in which we give you an insight on how these software development projects are carried on.
Benefits of software outsourcing
Again, we have talked about the multiple benefits of software outsourcing before and how it can benefit your company, however, today we will focus on the benefits of project outsourcing.
Like we said before, project outsourcing allows companies to benefit from the teams, expertise, hardware, equipment and resources of expert software development companies.
Not only that, outsourcing an entire software development project allows the company to cut costs, save precious time and focus on core business’ processes that otherwise would have been left behind.
In total, the benefits of project outsourcing can be defined into three main points:
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Cost cutting: Although software development isn’t cheap, it is accessible and a great idea to save money that otherwise would be lost on recruiting new employees, training them and even purchasing new equipment. Not to mention, outsourcing a software project allows you to get a custom software solution that adjust to your own needs and requirements.
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Saves time: By outsourcing your software development projects you can save valious time that could be directed into other core business’ processes that need attention from your team.
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Access to better technology: By working with a software development company, you get access to their resources, team and technologies, all of which will be used to create and develop your software solution.
What is staff augmentation
Now that you know what project outsourcing is, it is time to talk about the second type of software outsourcing: Staff augmentation, a type not many companies are actually familiar with.
You see, staff augmentation refers to the process of evaluating your team’s knowledge and capacities to perform a software development project, determine the skills that are missing, and expanding this team by recruiting outside help to fill in the gap.
Through staff augmentation, companies are able to put together their own team and fill in any specific roles or skills required by adding new staff members that will complement the whole team and bring needed knowledge to the project.
Now, staff augmentation is different from regular recruiting because companies are not looking to add a permanent member to their workforce, but rather find people with an specific set of skill and knowledge to bring that into an specific project.
How is staff augmentation done? You might be asking. You see, while project outsourcing only requires the company to set up the scope and requirements of the project and then hand those to the nearshore company for them to take over, with staff augmentation is different.
First, the company should define the project and its objectives, put together a team composed of their ow staff members, evaluate such team, determine what is missing, and then look for an specific person to fill in that gap.
This type of software outsourcing manages to merge the resources and team from the company (or client) and the knowledge and skills of an external person, creating the perfect software development team.
Benefits of staff augmentation
Staff augmentation is a great software outsourcing option because it allows companies to manage a project in house while still having certain access to other company’s knowledge and resources.
This type of software outsourcing opens up a door for companies to still manage their software development processes, while accepting external help with specific process they can’t or aren’t able to handle.
The main benefits of staff augmentation could be narrowed down into the three following points:
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Better control over staff: Although we have mentioned how working with a nearshore company still allows YOU to handle your projects perfectly, for companies that are looking to have a tighter control of the whole situation, staff augmentation allows this to happen, letting project managers to have more control over their staff and resources.
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Faster integration: It is easier to integrate a new person into your current staff than aligning two company's interests over a common project, which of course, directly results in a faster integration between your staff, the new member(s) and the internal processes of your organization.
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Access to new skills: Similar to project outsourcing, staff augmentation allows your team to benefit from the new skills, technologies and knowledge of a different company, which can be used to develop your project.
So, which one is better for my company?
Sadly, we can’t tell you which one of these two options is the very best for you, since it depends on the type of project you’re thinking to develop, your budget, and your goals.
However, for companies that don’t have the time or resources and are looking for a way to save costs, project outsourcing remains as the best option, specially for small and medium companies that simply can’t afford to add an extra staff member to their workforce.
Working with an offshore or nearshore company allows you to get a custom software development service that adapts to your budget, your schedule, and most importantly, your needs.
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