Team Augmentation vs Outsourcing: Understanding the Key Differences

In today's dynamic and tech-driven business environment, organizations are continually seeking optimal strategies for expanding capabilities, improving efficiency, and achieving cost savings. Two popular methods employed to achieve these goals include team augmentation and outsourcing. Both these strategies have their unique strengths and weaknesses, and the decision to opt for one over the other often hinges upon
a company's specific needs, circumstances, and long-term objectives.
But what is the difference between these two strategies, and how can you determine which approach is best for you? Let's break it down.

What is Team Augmentation?

Team augmentation is a strategy that involves adding skilled, external professionals to
an existing in-house team on a temporary or project basis. This approach is often used to bridge skills or manpower gaps without disturbing the existing team structure. The extra staff essentially becomes part of the existing team, embracing its culture, following its established procedures, and working towards the same objectives. They bring in their unique skills and experiences, allowing the organization to enhance its capabilities rapidly, and providing flexibility to scale up or down as required. Thanks to the deep integration, team augmentation can be a good solution, also on core activities. 

What is Outsourcing?

Outsourcing involves delegating certain tasks, operations, or projects to an external company or independent professionals. This entity typically handles all aspects of the task, including planning, management, and execution. Outsourcing can help businesses access skills or technology that they do not possess in-house, and it can often be a cost-effective solution for non-core activities. Unlike team augmentation, in outsourcing, the external partner is responsible for the deliverables, and they work independently to achieve the set goals, within the agreed-upon parameters and deadlines.

Team Augmentation vs. Outsourcing: The Key Difference

• Control and Oversight
  In team augmentation, the control over the project remains within the organization, as
  the external members are integrated into the existing team. The company can directly oversee the project progress, making adjustments and providing feedback in real-time. 
  On the other hand, with outsourcing, the external provider takes over project management. The level of control over the project by the hiring company is significantly less, and feedback is typically provided upon the delivery of milestones or project completion.
• Skills Integration and Knowledge Retention
  With team augmentation, the newly integrated professionals can exchange knowledge with the in-house team, leading to upskilling of the existing members. This strategy also helps in better knowledge retention, as the internal team remains involved throughout
  the project. In outsourcing, the external provider is expected to possess the necessary skills and knowledge, so there is less exchange of competencies. However, there can be a risk of knowledge loss after project completion since the external provider takes away their expertise when they leave.
• Flexibility and Scalability
  Both team augmentation and outsourcing provide flexibility. Team augmentation allows companies to scale their team up or down, depending on the project requirements.
  It offers the flexibility to get professionals with specific skill sets for a specific period. Outsourcing also offers flexibility, primarily in terms of cost and time. Companies can outsource specific tasks, which can be more cost-effective than maintaining an in-house team. It can also save time by enabling the company to focus on its core activities while the outsourced firm handles the delegated tasks.

Which One to Choose?

The decision between team augmentation and outsourcing depends on several factors, including the project's nature, the organization's control level, skill requirements, and
the importance of knowledge retention. Team augmentation could be the best choice when you want to maintain control over the project, want to enhance your existing team's skills, or need support on core activities.
On the other hand, outsourcing could be the best solution if the task is not a core business function, or if it's more cost-effective and efficient to delegate the task to an external provider.
In the end, the decision to opt for team augmentation or outsourcing is not a one-size-fits-all.
It is a strategic choice that should align with the organization's overall business goals, resources, and future plans.

If you would like to find out more about team augmentation and get some insights feel free
to reach out to us!