Staff Augmentation vs Dedicated Team: Which Engagement Model Fits Your Project?

Staff augmentation and dedicated teams represent different management philosophies and delivery models. In staff augmentation services, your managers/leads direct the work of the personnel provided. On the other hand, in a dedicated team model, a service provider is responsible for end-to-end delivery management. You, as the customer, retain control over product and business strategy.

It's more important to understand the concepts behind the differences in each staffing model than to worry about how many staff members, how flexibly the model allows you to staff, or where the staff members are physically located. For US-based founders and CTOs, the relevant question is this: Do you need more people to manage the growing responsibilities of your job, or do you need to bring on a team that manages more of your engineering work?

What Is Staff Augmentation?

Staff augmentation is a form of contracting in which employees are placed in your existing development environment. They will rely on your code repositories, project management systems, communication channels, and development processes.

Let’s say your US product company has an engineering manager and a team of developers in-house. You want to add a senior member to that team to help build a new product, but you don’t want to put the rest of the company through the time and process burden of a formal, full-time hiring process.

You contract in that senior developer for the duration that your team needs him or her to build that product. Your engineering manager is still able to decide which items the developer works on, which sprints the developer participates in, and reviews the developer’s code. The manager also retains control over the developer’s overall product priorities and how the developer engages the rest of the team.

Your engineering manager still decides:

• Which tickets the developer handles

• Which sprint they join

• What coding standards they follow

• When work is ready for review

• How priorities change

• How the developer works with the rest of the team

That makes staff augmentation particularly useful when the bottleneck is people, rather than engineering management.

Because the engineering management and process systems are in place, staff augmentation helps fill staffing needs.

What Is a Dedicated Team?

A dedicated team is made up of personnel, including engineers, QA personnel, project and delivery managers, and other professionals, as needed, that a service provider puts together to work on your product or project. The service provider controls the day-to-day management of the team, while you define and maintain oversight of the product’s direction and prioritization.

The focus should be on what you are purchasing. With traditional outsourcing you purchase individual engineers and are responsible for creating and managing the overall delivery framework.

Imagine you want to build and enhance a software product's services over a period of time. The first release is built based on your product vision, however; the detailed requirements and product use cases are defined and evolved as the product is used by end customers. It is inevitable that the product will evolve based on customer feedback and usage.

Managing the evolution of the product and delivering product enhancements require management bandwidth, which you may not have within your organization. The most efficient way to address the management challenge is to engage a dedicated team to manage the overall product enhancement and deliver product release.

Once the product management team defines the features and enhancements, the work is further refined into user stories and product backlog. The product management team is responsible for setting prioritization of backlog items. The service provider is responsible for managing the delivery of product backlog items and ensuring the backlog is continually refined.

What Is the Difference Between Staff Augmentation and a Dedicated Team?

Staff augmentation and dedicated teams differ in the ownership of product and service delivery. Staff augmentation provides additional individual workers within a team that is managed by you. On the other hand, a dedicated team gives you a solution where the team is managed by the service provider. This has certain downstream implications on your engineering organization.

With staff augmentation, your management responsibility increases. For example, your engineering managers would manage the daily work of the staff-augmented engineers, for example, help resolve staff blockers, assign work, and review design and code changes.

With a dedicated development team, your management responsibility is lesser and more at a strategic level. For example, your management would focus on setting the strategic direction of the team and reviewing the team's work to ensure progress toward the goal.

With the above in mind, who would you expect to unblock an engineer?

With staff augmentation, the engineer’s manager would be responsible for unblocking.

With a dedicated development team, blocking would be managed by the service provider.

Dedicated development teams vs. staff augmentation should not be looked at to compare the number of staff. Two situations may have similar staff numbers but differing management burdens on your organization. Staff augmentation gives you an opportunity to quickly increase your engineering capacity while still managing them within your processes and framework.

Xcentric Services is one company that offers staff augmentation. The developers it places merge into a client organization’s development teams and processes. Xcentric staffs and staffs out developers and, as needed, QA personnel.

Who Manages the Work and Who Owns Delivery Risk?

The staffing and managing of the team is the responsibility of the service provider. The client product management team retains responsibility for defining the product and managing product features and enhancements. The client fully owns the product and the service provider has no responsibility for product ownership.

'Hands-off' development is a misnomer for a dedicated team. A product owner must still participate to answer business questions. Product owners taking a long leave also creates a blockage for the provider, as they cannot manufacture business direction.

How Much Does Staff Augmentation and Dedicated Team Cost?

Staff augmentation is charged per role and engineer, and a dedicated team is charged per the team's capacity and delivery structure. Pricing varies per agreement, seniority, and contract.

Staff augmentation charges are based on the number of personnel each client engages. Each engineer is billed separately. Pricing for a dedicated team is based on the capacity of the team. Changes in team size and composition are charged in the same manner as scope changes in a staff augmentation engagement. Redirecting a team or changing a team’s backlog prioritization is included in the monthly fee for a dedicated team.

The cost for staff augmentation is generally more internally managed than a dedicated team. The trade-off for an engineered solution is the potential for more internal management. A team managed by the service provider is less flexible for changing the scope of work and managing the team. A service provider is better suited for a larger scope of work.

The total cost of staff augmentation may be less than the total cost of a managed team, depending on how flexibly the staff needs to be managed. Pricing for a dedicated team is often easier to predict and less subject to market fluctuation.

For a dedicated team pricing model, a monthly structure is common because the client is paying for continuing team capacity rather than a fixed list of deliverables. The monthly amount can change if team composition changes.

How Each Model Affects Team Structure

With staff augmentation, your requested specialists are added to existing teams and structures. A dedicated team, on the other hand, creates a new, independent team. Consider examples with product development teams:

Scenario 1: Staff Augmentation

Let’s say your organization has an engineering manager and engineers at different experience levels. Your team develops a product and, for this next version, your organization needs the expertise of a more experienced developer for a workshop that will take about six months.

You engage a more experienced developer.

The staff manager for this new developer is your engineering manager. This structure works well for staff augmentation.

Scenario 2: Dedicated Teams

Your organization wants to launch a new product, but your team does not have the engineering management capacity. Further, your organization wants to develop a SaaS product and is lacking engineers in different specializations (front-end, back-end, QA, etc.) to help build and support the product.

In this case, your best option may be to engage a dedicated team of engineers to help your product team develop and manage the product backlog.

In the cases above, it’s likely your organization needs similar engineering talent for both staff augmentation and dedicated team engagement. However, the management of your organization and the product is likely very different.

How Long Does Each Take to Reach Productive Output?

Out of the two, staff augmentation can help your organization achieve productive output in a more timely fashion. A dedicated team, however, can help provide product output in a more definite and structured manner. Several elements of the two models are undoubtedly different. For example, the type of talent each model employs is different.

Staff Augmentation

Firms use a variety of strategies to select staffing talent. They can take an ‘individual role’ approach, meaning they select a single individual based on their judgement, or they can take a ‘multiple roles’ approach, meaning they build a larger team based on their judgement.

Dedicated Team

The process through which a staffing firm places an individual is different from the process through which a client integrates that individual into the organization’s processes and culture. Depending on the situation, the staffing firm’s onboarding process may include giving the individual access to the client’s tools, and aligning and integrating the client’s processes and the staffing firm’s processes, including the firm’s methodology for Agile development.

The goal of staffing firm’s onboarding process is to help the individual integrate with the client and, ultimately, the client’s development team.

When to Use Staff Augmentation

A client organization may opt to utilize staff augmentation when the engineering leadership exists to manage and integrate the staffing firm’s development resources.

Examples are appointments such as:

• A front end engineer for the launch of a new product

• A DevOps Engineer for a cloud migration

• A QA Engineer for a release testing cycle

• A mobile engineer in the absence of in house skills

• Temporary help for your team during a development cycle

The model boils down to answering:

• Who will supervise them?

• What will be their responsibilities?

• Who will assess their work?

If you have the answers inside your company, staff augmentation gives you added flexibility without adding an additional layer of management. Xcentric positions its service for exactly this type of extension, offering software development talent across web, mobile, cloud, AI and other technical areas.

When to Use a Dedicated Team

A dedicated team model is appropriate when the product being developed is substantial enough to warrant a product roadmap, but your organization isn't interested in managing the software development service process at that level of detail.

This model applies if:

• The product being developed requires the work of multiple engineers

• There is potential for the product to be changed and augmented after the first release

• It is also appropriate if the product needs to be developed and released in an iterative, time-boxed fashion

• Knowledge of product development is of critical importance

It is best if the service provider has a delivery and/or engineering management function. The product roadmap states the desired end; it is up to the organization to decide how that end is to be achieved.

Staff Augmentation is one of Xcentric's core strengths, and they seem to imply that their other dedicated development support services are offshoots of staff augmentation. This requires further verification.

Failure of Staff Augmentation and Dedicated Teams

Staff Augmentation failures happen due to inadequate client management capacity to lead additional engineers, and failure of dedicated teams happens due to inadequate product ownership and direct first-line management of engineers. These are the areas of difference between staff augmentation and dedicated teams that are underscored in practice.

Staff Augmentation

You hire three developers because your roadmap is behind schedule, but your only engineering manager is already overloaded.

The additional developers arrive, but nobody has enough time to refine requirements, review pull requests, resolve architecture questions or remove blockers.

You have increased headcount without increasing effective delivery capacity. The problem is not necessarily the engineers. The engagement model placed delivery management with a person who did not have enough capacity to provide it.

Dedicated Teams

Client isn't able to define product ownership and direct first-line management of the engineers. Now, the client is able to manage product ownership, but engages in direct first-line management of engineers.

The management work that is to be absorbed by the dedicated teams is done by the client, making the engagement contrary to the purpose.

A true dedicated team relies on a productive product owner. Unless the service provider manages the delivery, e.g. in the case of poor product ownership, the service provider has no control over the determination of which client problem to solve.

The key question is not which model is the best. The key question is which model does the least to infringe on the client’s management of the project. Staff augmentation is not outsourcing or professional services. The main difference between the three is who retains management responsibility.

Staff augmentation vs professional services

The main difference between the two is what is purchased. Staff augmentation is the purchase of people who will work within your organization and be managed by your staff.

Professional services, on the other hand, means buying in a service to be performed by the firm, such as building or designing something, doing a study or assessment, or providing implementation or training services. It's also possible to outsource various professional services and not add any staff.

Conclusion: Staff Augmentation vs Dedicated Team: Which Engagement Model Fits Your Project

The difference between the two is who retains management and responsibility for the work. Xcentric services comparison describes staff augmentation as a situation in which management of the work is retained by the client, while outsourcing means transferring management of the work to the service provider.

The decision between using a dedicated team or staff augmentation boils down to the specific operational dilemma of who should be in charge of managing the engineering activities daily. If the internal organization you are part of or you are managing possesses such capabilities, though, and you would just like to supplement your resources with additional engineering capabilities, then you should go for the staff augmentation model.

If you would like to have a constant delivery team and do not mind letting your provider be responsible for managing the engineering delivery process, then a dedicated team should be your choice.

Notably, both engagement models pertain to the same geographical location. The above-mentioned decision relates to the management issues, responsibility for delivery, alignment of team structure, project pricing, and provision of particular engineering capabilities.

In the view of CTOs and company founders in the US, the next advisable step is to measure the capabilities of the existing team against the upcoming needs so as to select the required type of engagement model. Having assessed the management capacity, the presence of missing roles, time period of carrying out the task and the amount of responsibility for performance, one will be able.