IT companies from around the world are often struggling with a lack of proper manpower. Either they don’t have enough staff in their own company, or they are not able to find the right talent. They suffer especially when crucial projects come in. The solutions to these problems would be staff augmentation, freelancing and outsourcing. In this article, we examine the first two - staff augmentation and freelancing, and why you should consider the former over the latter.
Staff Augmentation (SA) is an outsourcing strategy where you would be provided with professionals from a specialized service provider. The new team would complement your own in-house staff and work to meet the organizational and business objectives of IT companies. The new team can come in either for short term or long-term requirements and would add to the technical skills your team may not be able to provide at the moment. One of the main benefits of staff augmentation is that it opens the doors to deep pools of talent, but minus the liabilities of having full time hires. It is the vendor who provides the talent, so you don’t have to go through any hassles. Remote developers work only for one project at a time, so there is a full focus, and no distractions.
The staff that you hire through augmentation services are temporary in nature and hence flexible. They can be tailored to suit your needs and then put away. You not only get highly skilled and technically adept people, but you are also relieved of the hassles of keeping a permanent employee, including giving them a good work environment, salaries and benefits. The precision and efficiency levels of the workforce are often commendable when you hire from a reliable vendor because you can easily adapt them to the needs of the project, however crucial it may be.
High Productivity Level - When new people come into the team, they may be already skilled, but you still need to train them to work on your project with the already existing team. This could take a bit of time, but once they cross the initial weaning phase, they will plunge into the project, and this increases productivity levels. Once they get a handle on your internal business processes and goals, there is no stopping them. However, choosing the right team is very important or it could lead to a productivity slump. But it could be far better than hiring inexperienced staff on your own and training them for months. That’s an utter waste of resources and could delay the project by months.
Flexibility - Flexibility is another great feature with SA because you can step up the talent by hiring more people when you need them. By integrating proven professionals in the project, you can speed up the timelines and ensure quicker project delivery. You can scale the team up or down depending on the requirements of the project. This would be a great boon if you are looking forward to a hybrid working model because you can always have an immense talent pool of developers with intensive skills in your team.
Cost Efficiency - Cost efficiency happens because you don’t have to spend resources on hiring new staff or training them. You only need to pay for the staff for the time they spend on doing the project, depending on their technical aptitude and skill set. This helps the administration focus on the business goals and the quality of the project.
Complete Control Over the Project - SA allows you to have control over the project and thus shape the project according to the demands of the client. The vendor that provides the team does not have any say in the management and execution of the project, because they are only operating according to the desires of the parent company. You have a stronghold over who does what in the project, who controls the steering wheel of the project, and who handles the smaller tasks. This feature is the main advantage over project outsourcing because in outsourcing, you get only controlled management.
Access to Specific Skills - Specific projects require specific skills, and with becoming a staff augmentation company, you are open to a whole powerhouse of special skills. You can pick and choose your team with only people from specific skill backgrounds. There is absolutely no wastage of people or resources. This would be another big boon in the wake of developers jumping from camp to camp. The growing demand for IT services forces people with talent to move to a different employer, and when this happens in the course of a project, it could be a major setback. With SA, you don’t have to worry at all, because you don’t have to stress about retaining your staff post project.
Customer Control on the Selection Process for IT Staff Augmentation - Since the teams are selected for specific projects, and for specific clients, they have control over the kind of skills and knowledge that the developers should possess. This helps them to get a team with the proper expertise, and as the customers have full management control, they have their say when it comes to recruiting. This ensures greater levels of flexibility, efficiency and transparency in work as well. Not only, so they can keep track of the dedicated development team, but also to track the working process and monitor progress.
The next outsourcing model that’s popular among companies is the Project Outsourcing (PO) model. It is so markedly different from SA in several key ways. With staff augmentation, you have control over the team while hiring developers and engineering resources for the project. That way, you are also answerable for the risks that come with it. With project outsourcing, you ask the vendor for a specific outcome for the project, and the vendor supplies you with the people to do it. The risk would be partly with the vendor if something goes wrong. It is also the responsibility of the IT outsourcing agency to recruit, manage and train all the people required for a particular project. They work as an external team, and would not be directly involved with your internal team.
The major difference between staff augmentation and project outsourcing is that with the former, you are more aware of the outcome of the project because there is transparency. With staff augmentation, you have control over the team, but you also have to find a way to manage the risks that come with it. As for the risk factor in project outsourcing, you are sharing the burden with the vendor because they are responsible for the team. The vendor agency is responsible for selecting, training and managing the team for your project. They do not work with the internal team, and will not be a part of any internal development activities of your company.
The main difference between project outsourcing and staff augmentation is that with staff augmentation, you are purchasing engineering resources while maintaining direct control over your team (along with the associated risks of a possible negative outcome), while with outsourcing, you are paying for a specific, prearranged outcome, and sharing the burden of risk with the outsourcing vendor, although giving up direct control over certain aspects of your business operations.
An IT outsourcing agency will recruit, train and manage a team of skilled professionals to handle the development tasks you’ve set out for them. This external team will work separately from your firm, and won’t be directly involved with the rest of your internal development activities, or any other in-house programming work
Now, let us look at how staff augmentation is better than freelancing or project outsourcing.
There is a great deal of transparency in a well-managed staff augmentation scenario. So you can take into account the reliability and trust factors as well. There is evidence of their progress of work throughout the course of the project through transparency, making it easier to plan project delivery. There will be no surprises at the end.
A freelancing agency might not be very keen on signing the terms and conditions, but an agency that gives you staff to add to your team would definitely have a formal contract that you can sign.
Scaling up and down offers a great deal of flexibility, and you are spared from the hassle of recruiting, hiring and managing new members and dealing with the expenses entailed in managing full-time employees. You can also adjust the team size, add or subtract resources depending on demand. So once you sign an engagement contract with the vendor, you can define the roles and responsibilities, chart out the work details, define milestones and deliverables, and decide working hours. There would be regular scrum meetings, so there is transparency in project progress.
They work only for short term projects or only for a particular project, so they don’t feel threatened when new talent comes in. This scenario also suits your in-house team because they also won’t feel threatened. The augmented staff arrive at the office only for that particular project, and they would go back to a new project elsewhere once the current one is up and running.
With the outsourcing team, you have to worry about their cultural nuances and technological differences. With staff augmentation, that worry isn’t there. Cultural challenges are a major problem with IT project outsourcing. The world has changed a bit, but not at the rate you would want it to. Cultural differences do exist, and they can hinder the project progress, especially with the usage of certain words, phrases, actions, colors or symbols. Each team has to be aware of the lifestyle and approach of the other people in the team, and in the company. Whether that would be a feasible option, only time will tell. Technological differences can come in various forms, ranging from lack of desired skills in a particular member of the team to the actual project technicalities, including design elements of the system, IT infrastructure problems and the like.
When working with an augmented team, you have managerial control over the team; this way you can enhance the quality of your work. Contrary to outsourcing your work, staff augmentation lets you have complete control of the project. This is unheard of in project outsourcing. The project takes place in-house, so there is complete integration with the internal team. You have control over the quality and outcome of the project. SA would also be a good choice when you need a team for long-term projects. In project outsourcing, the company has to depend a lot on the vendor for providing a skilled team. It would be better to go for a valued and experienced vendor who can provide a team that integrates seamlessly with the company culture.
Service Level Agreements are contracts between the vendor and the company with reference to the service provided by the vendor agency, so there is nothing onerous or omitted. The vendors strive to meet the requirements mentioned in the SLA, so every established staff augmentation service must have a clearly charted one. There are rules and regulations regarding the proper charting of an SLA, and what can be done in the case of failure to follow. Freelancers and outsourcing agencies do not have such a procedure.
Depending on project requirements and your company’s goals, you can opt to go for either staff augmentation or freelancing/project outsourcing. Some people like to combine the two, and then make a hybrid model.
Staff augmentation would be a good option for large, multinationals because they can easily react to changes, and there will be variables in the firm’s IT and personnel budgets, and staffing requirements might change from projected business growth. Staff augmentation can relate to all that if there is a technical team from outside who can integrate well with the existing team. On the other hand, if you don’t mind not having managerial control over the project, and don’t have the resources to manage a team from outside, project outsourcing would be a better option.
Staff augmentation is more suitable for companies seeking flexibility, and the IT managers can work directly with them to reassign tasks, or to assign a new task. There will be no cultural differences or communication issues when you choose to go the staff augmentation way.
Have a project that needs resources? Cabot's IT staff augmentation services is the one for you.
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