Staff augmentation falls in the middle: you bring in developers and keep the management in-house. The main advantage is speed — a matching profile can join in weeks rather than months — and the commitment ends when the work does.
Three questions generally decide the matter. First: is what you are building a core competitive asset, or internal plumbing? Next: over what horizon will the work last — months or years? Last: who owns it once the vendor leaves?
In practice, these models are combined. A common pattern holds architecture, product decisions and core domain code in-house, while an outside vendor covers peaks, well-defined modules or platform work.
Third-party integrations tend to be another reliable source of cost. A form that saves data is easy to estimate; the same screen wired into a payment provider and a CRM is not.
In practice, companies blend them. A common pattern keeps architecture, product decisions and core domain code with permanent staff, while an external team covers discrete features, migrations or mobile clients.
The mix of people behind the number matters. A day rate says very little on its own: one senior developer at a premium rate can be less expensive in the end than a pair of junior developers who require heavy code review.
Three simple questions usually settle it. First: is what you are building central to how you make money, or internal plumbing? Second: over what horizon will the work last — one project or a permanent roadmap?
Define what is included as user stories or scenarios: what the user does and what the system does in response. Just as important, state explicitly what you are not building.