Differences Between Software Staff Augmentation and Software Project Outsourcing

Outsourcing is not a new concept in the business and software development industry. For many years, companies have analyzed how to improve their time to market. The buzzwords in the Software Services market are either Software Staff Augmentation or Project Outsourcing. Due to the challenges of finding highly-skilled engineers, the general trend of consulting with outside experts is only growing and an approach that every company should be evaluating.

While both options can provide you with skilled engineers to assist your development team on a deadline-focused project, there are distinctions between these approaches that we will discuss in this article.


Software Staff Augmentation

An augmentation engagement temporarily boosts your software team with skilled staff throughout a project or during specific phases. Software staff augmentation is one of the best ways to keep your costs low while maintaining access to top-tier engineering talent.


Software Staff Augmentation Benefits

  • Software Staff Augmentation offers a business the flexibility when it comes to scaling up or scaling down their teams — minus the hassle of recruiting, hiring, and then dealing with the expenses of full-time employees. Vendors provide the business with a talented software engineer for a set of specific tasks that you define.
  • The outside software engineering team works directly with your in-house team, as managers oversee how they cooperate with your employees. Your full-time staff will not worry about job security or be threatened by the additional talent coming in from staffing firms, as these newest team members are only working on a project on a short-term basis.
  • Outsourcing an entire vendor’s team can come with some technological and process differences – that can make it hard to align with your company’s goals and create compatibility issues and challenges. Staff augmentation makes it easy to integrate contracted engineers into the internal team.
  • You can quickly fill in-house skill gaps with outside talent. The augmentation model saves you money by reducing general overhead costs and the associated expenditures that come with hiring and training new employees.


Software Staff Augmentation Drawbacks

  • You will need to ensure that your management team has the capacity to work with an influx of engineers. The time commitment required can scale exponentially as more engineers join the project.
  • Your software staffing agency will provide you with the most skilled candidates on their team and what your budget might allow. However, you will likely need to devote time to onboarding so they understand your process; following an Agile process will help, but in nearly all cases, you will need time to integrate with your team. This can slow productivity down, at least in the beginning, until your augmented staff learns your internal business processes and protocols.

Software Project Outsourcing

Project outsourcing is different from staff augmentation in several ways and has positives and negatives. The main difference with software staff augmentation is you are engaging with engineering talent while maintaining direct control over your team and they follow your internal process. This also means that you are responsible for the associated risks of a possible negative outcome.

In the project outsourcing model, you are paying for a results-centric outcome. In other words, you are sharing the burden of risk with the vendor to complete the project, although at the same time giving up direct control over certain aspects of the project and the team working on them.


Software Project Outsourcing Benefits

  • Costs – Like with Software staff Augmentation, cost reduction is one of the key benefits of Project Outsourcing. Research done by Tech Behemoths showed that 38.5% of the companies surveyed strongly agree that outsourcing was a positive experience during the pandemic.
  • Management falls to the vendor – Once the contract is signed, the burden of setting up, training, and managing a remote team falls to the vendor. You are paying for their expertise, so they are held accountable to ensure their team delivers a high level of quality and delivers the final product.
  • Top Talent – Gaining access to a wide variety of roles such as Product Manager, Engineering Architect, Mobile, Cloud, and Data Engineers is nearly impossible for one organization to take on. And even if they could, it’s impossible to find a team that gels and works together. Finding talent with specialties and much sought-after technical skills is a huge plus when it comes to project outsourcing. An experienced project outsourcing firm will bring the right talent to your project, even if they are not available locally. A survey from CIO Magazine reported that when it comes to finding the best talent to complete their project, “42% of respondents share that staffing shortages are a major concern.”
  • Focus – When working in a project outsourcing engagement model, managers can delegate more operational development tasks to outsourced team members. This allows them to utilize full-time employees to work on mission-critical projects or initiatives that fall within their employee’s areas of expertise.


Software Project Outsourcing Drawbacks

  • In a project outsourcing model, your hand off direct managerial control to the outsourced vendor and the offsite team they bring to the project. That can lead to frustration with communication protocols with people in different time zones. If you work with a team overseas, you might encounter language and culture barriers as you try to communicate your development goals. Note: at Lab651 we always work to put our team in your time and speak your native language.
  • In giving up direct oversight with this model, you have the potential of working with employees, managers, and outsourcing vendors to try to figure out who is responsible for what components of the project. Coding standards that fall short of your rigorous development standards or undisclosed technical debt from an outsourced development team can be time-consuming and difficult to resolve.


Which is Right for You?

Choosing the right technology partner is a complex process. There are variables such as your specific skillset needs, projected growth (or contraction), project deadlines, and many other factors specific to your business.

If you are interested in flexible staffing that lets you bring in outside technical expertise and will quickly integrate with your existing team and development processes, then staff augmentation is the best option for you.

If you lack the technical software design processes, have little technical experience on staff to guide and manage a team consisting of product owners, software architects, UI/UX experts, and mobile and cloud engineers, then project outsourcing would be the best engagement model for your company. While we have identified some of the drawbacks with product outsourcing, an external development team will be less expensive in the long run, while giving your team more time to prioritize their most important development tasks.



Every business is different, and depending on your requirement, you might end up selecting software staff augmentation, software project outsourcing, or a little of both. The good news is that as your company continues to grow, you can always alter these engagement models as needed.

The best thing you can do today is work with an experienced vendor that can help meet your present engineering talent challenges and continuously consult with you to implement a product outsourcing model to make your company run as efficiently as possible. Ultimately, your vendor should be making your business more competitive and helping you bring you to accelerate the pace at which your products are to market.