Have you ever wondered which option to choose for the development of your project? Whether it’s best to go with staff augmentation or better choose the services model?
In this blog post, you’ll read about the main pros and cons of each of these models and the most important factors to consider before choosing one of them.
Let’s first start with a brief overview of what each model is.
What Is a Staff Augmentation vs. Services Model?
Staff augmentation is when a company sells anything as a person doing an hour of work, whereas the services model is priced based on the value or outcome it provides.
In a staff augmentation model, you as a client are paying for the specific technical skill set of a person working a specific set of hours, days, or months. In this model, you already have a team of your own that you’re looking to expand with some additional help or a specific skill set.
On the other hand, the services model can be defined by the outputs it generates and the impact it has. In this case, you’ll pay for the whole package of subject matter expertise, and whatever that is worth for you, no matter how many hours of work are put into it.
What Are Some Pros and Cons of the Staff Augmentation Model?
The staff augmentation model is a good option to pursue when looking to fill gaps in your team, and it makes it possible for the new staff to become an extension of your team. It also allows you to expand your team with members who have the particular skill set you need. This model also enables you to frame part of the team yourself. Thus, your team members will control the work done and be responsible for the process you want them to follow and the tools you want them to use. In this case, the staff augmentation company provides the muscle to do that work, i.e., the team members who will work the way you do at your organization.
Another benefit of the staff augmentation model is that it gives you the longest working relationship with a particular group of people. If you are looking to staff a team that will work for multiple years, to get the most long-term value from the relationship with this team you should probably use the staff augmentation model. That’s especially true when it comes to product development. The benefit that you get from this model is that as these team members climb the learning curve, they become increasingly expert at doing that work with fewer directions, as they have already come to understand your business needs.
The staff augmentation approach will allow you as a client to also maintain knowledge within the team that protects intellectual property. In other words, you can expect that if and when you’re no longer working with the staff augmentation team, you’ll still have team members of your own that understand what was built. This will put you in a good position to retain the knowledge and skills needed to maintain and improve the product going forward.
Once the project has ended, or the product has been developed, you may need to return to “normal” staffing levels. The staff augmentation model is more flexible than hiring permanent staff or committing to a services agreement, and it eliminates the need for uncomfortable conversations about what your employees will do once a project has ended.
A drawback of the staff augmentation model is that there is less ownership. For example, a staffing company can find a person who can do the work for you. However, it doesn’t take responsibility for the work done (in terms of a signed statement), and that hired consultant doesn’t own the results of the work. In this scenario, you as a client own the risk and responsibility associated with deliverables.
What Are Some Pros and Cons of the Services Model?
One of the main pros of the services model is that the service company owns the deliverables, thus it has more responsibility for the outcome of your project. This will make the service company align with your business interest and do the work that it needs to do to ensure that they get the highest possible compensation. In this scenario, there are incentives built into the agreement, such as bonuses and penalties, to share in both the upsides and downsides of achieving the desired business outcome. This is not a fixed bid case, where exactly the opposite would be true. In that case, the incentive for the consultant would be to hide the amount of the actual work and deliver the minimum possible scope of work, which is rarely in your business interest.
Another important benefit of the services model is the very deep expertise you will get from professionals. That’s a strong advantage when you don’t have the expertise you need in-house. Still, you need a PM, BA, design, technology development, and even services that prescribe the best options for what methodology to use, what technologies and platforms, etc. The services company will be able to make those decisions subject to your approval. You will get the full benefit of all the different kinds of skills that the service company can provide. They can bring the right amount of expertise from each team to deliver the solution you’re looking for.
The services model will also provide you with a much more seamless staffing process. From a timeline standpoint, it’ll be easier for you to engage with the services model because the services company controls the staffing.
The challenge with the services model is that when the work is done and the project team disperses, you won’t have anyone left at your company who built that solution. You may feel left alone to maintain the solution, because it’s very difficult to get a new group of engineers to learn by reverse-engineering how a product was built so that they can begin to extend the product’s features.
Following that argument, another potentially confusing aspect of the services model is that you as a client will have all these different team members come and go. As a result, there is a higher risk of knowledge loss because of the higher turnover within the team. One way to prevent this from happening could be to require that they document the work they do.
Depending on what you’re looking for, another drawback of the services model is that you will have less ownership and responsibility for the final result with this approach. In this model, the services company takes on the responsibility and owns the outcome, and you will have less control over the process. That will be a disadvantage if your goal is to control or participate in how the deliverables are accomplished.
How to Choose the Best Option for Your Business
When deciding which model to choose for one particular project, there are a couple of factors to consider. It will depend on different components such as budget, available staffing resources, timeline, etc.
In terms of budget, it’s essential to know that in the staff augmentation model you’re paying for a person with a particular skill set to work for you for a defined amount of hours a day. In other words, you’re paying for technically skilled labor at a cost per hour. That is very different from a services model where you’re paying for an outcome, i.e., you’re paying for the deliverables, the total expertise of the team that will provide those deliverables, and the services that come with that. Thus, staff augmentation is based on effort, while the services model is based on deliverables.
The decision will also be based on the available staffing resources. For example, let’s say you are a startup company with no team of your own, you have a business problem you need to solve, and you’re looking to get some sort of proof of concept for the market. You have the business and market expertise, but you lack the engineering organization. In this case, the services model will serve you best. Alternately, staff augmentation will be most useful if you have an internal team but you need additional staff with a particular skill set to blend in with your team and make it stronger.
Speed or timeline is another important factor to consider. With the staff augmentation model, the timeline can be extended because you’ll need to choose the team members for the project yourself. The staffing company will provide you with the CVs of different candidates to go through. Then, you’ll need to do some interviews and, in some cases, even coding tests. In the services model, you save that time, because the services company owns the staffing and commits to a specific kickoff date and a fixed deadline.
It’s important to mention that you can have both delivery models for different purposes as a client. For example, you can choose the staff augmentation model to develop a mobile app by having several mobile developers. You can also engage successfully with the services model for another project for which you need UX/UI design services, because you don’t have internal team members who can do that. You just need to consider all the different factors and aspects of your business needs and choose which model will fulfill these needs best.
What Value Can We at MentorMate provide?
One of the best ways to get value out of MentorMate is with the full-services model, because then you can get our full subject matter expertise and not just one kind of technical skill set to use in your organization. For example, if you’re trying to make a change or modernize by teaching your current team members a new platform or skill, you might find it difficult to convince them to climb that learning curve because it’s risky. In this case, the best you can do is bring in MentorMate’s team that already has that skill and have them work directly with your team members to help them learn those new technical skills.
Our best value in terms of staff augmentation is that the way we hire people at MentorMate creates consistency and reliability for you as a client. Although there might be 10 people on a dedicated team, we know all these people have been hired with the same set of standards. We’ve hired these people as employees, and we know them, so when we assign them to a project, we can guarantee their level of expertise.
In conclusion, some of MentorMate’s services include design, continuation engineering, consulting around enterprise architecture, and business strategy (creating a proposal with a set of deliverables at a certain cost). We also provide hourly personnel for solution QA and development.
Our value proposition is strong, because we get frequent positive feedback from our clients. We are good at making sure that when we say we can do something, it happens. We are good at delivering on time, on budget, and on quality, at an extremely high success rate. We have a strong software development team; we create partnerships, and we take on and share the risk by owning the results. And our trump card is the subject matter expertise that we bring to the table in various software areas. Thus, working with MentorMate brings reliability and predictability of success to you as a client.