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Businesses often have difficulty meeting project objectives due to a lack of technical talent. The process of hiring permanent staff can take a while, which can lead to delays in delivery. It is possible to overcome the problem by hiring temporary/project-based experienced staff. This is referred to as IT staff augmentation. It is similar to hiring an expert from a project outsourcing agency.
The software market has grown at an incredible rate in recent years. Statista.
- The software market is expected to generate revenue of US$650.70 trillion by 2023.
- Enterprise software is the largest market segment, with a projected value of US$263.80 trillion in 2023.
- Revenue is expected to grow at a compound annual growth rate of 5.72% (CAGR 2023-2027), resulting in a market value of $812.90 trillion by 2027.
- The United States will generate the most global revenue (US$321.60 trillion in 2023).
A growing software market means a higher demand for skilled staff and diverse skill sets. This chart shows how revenue is expected to rise in the software market. Augmenting IT staff is becoming increasingly important because of the increasing demand for qualified staff. This guide will help you get started.
What Exactly is IT Staff Augmentation?
Staff augmentation is a broad term that refers to the temporary use of staff from other organizations to complete a project. This practice is employed to meet the requirements of a product development initiative. IT staff augmentation is now a common term in the vocabulary of every tech company. Outsourcing means entrusting the entire project to a third party. However, in staff augmentation, you select skilled personnel from outsourcing companies to complete a project on which your in-house team is currently working.
To achieve project objectives, software development necessitates extensive research. Tech teams may be lacking the required skills and expertise. It is possible that there is a skilled worker shortage in the area, that they require highly trained and specialized skills, or that the industry has a high attrition rate. IT staff augmentation enables quicker scaling. Developers, architects, test engineers, business analysts, project managers, and other specialists are easier to find. You can hire "highly skilled" developers who are experts in the technology stack with which you work.
Staff augmentation services enable you to take advantage of the best of both worlds. Your squad consists of your team and professionals from outside agencies with whom you have contracted. Remote work is becoming more common, and IT staff augmentation trends are rising. It enables organizations to hire people from all over the world.
Management Services vs Staff Augmentation
Investigating the possibility of converting managed services staff augmentation engagements is worthwhile. Managed Services is a third-party service provider to a business with agreed-upon measurable outcomes. By giving the supplier more control over the process, Managed Services promise greater cost savings and efficiency.
Staff augmentation offers many benefits, including flexibility and quick access to staff who has expert knowledge. Do organizations need to abandon staff augmentation? This is the practice of "augmenting" or filling in gaps with external resources. Which model has the best and worst? Which approach is best?
Brick red Systems believes that managed service models and staff augmentation are not mutually exclusive. In a dynamic environment, staff augmentation is always necessary. Organizations that balance staff augmentation with Managed Services will be able to concentrate on their core competencies.
Personal Augmentation
Staff augmentation was born from the need to meet resource constraints, short-term budgetary pressures, and headcount limits. This was good practice for organizations that required skills for short-term and immediate engagements. Operation managers and IT staff used external resources to fill in the gaps within their internal resources. This was done without having to hire people for fixed-term positions.
The manager would have no more budget for the external resource once the project is completed. This worked until staff augmentation was considered a long-term solution. The projects were finished, but the contract of the external resources was not terminated.
The external resource became invaluable, if not indispensable, as one gained knowledge about internal processes, systems, and people. He or she could be redeployed to another project and continue as a contractor for the company for many years after the end of the current project. Many market factors have contributed to the continued exponential growth of staff augmentation, which amounts to billions worldwide.
These include steadily decreasing rates, the seemingly never-ending margin pressure faced by most companies, and corporate policies that restrict hiring. Staff augmentation is only possible when the contract of an external resource is short.
Managed Services
To reap the long-term benefits of a solution partner, managed services clients must look beyond customary outsourcing service criteria and short-term contract staff. It is important to see beyond the initial savings and ask, "what's next?" Traditional Managed Services allows organizations to efficiently manage and outsource operations and delivery processes to lower their total costs.
Managed services can be the extra help you need. Managed services will take away the time-consuming but necessary tasks. Managed services will allow you to concentrate the right resources and people on the right projects.
All your strategic initiatives will be realized while improving productivity and efficiency. This model is a long-term strategic option. Pricing is based on monthly billing based on volume and service levels, not per diem fees for staff augmentation. This ensures that the business's costs remain within budget. This reduces volatility and allows for accurate budgeting.
These are the typical savings for Managed Services:
- Only pay for the actual service used.
- Performance increases.
- Optimized value-add utilization of internal resources.
- CSI-Continuous Service Improvement and efficiency gains over time are built-in.
- Service demand is directly driven by lower risk from business volatility.
- Suppliers have flexibility in staffing and the management and utilization of their resources.
In current market conditions and trends, there are many other reasons that a Managed Services model can be advantageous. The most appealing thing for a company is that the supplier takes on the risk of future operations and transitions based upon a defined, agreed-upon tenure and scope.
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Managed Services Reporting and Service Level Agreements
Every service should be measured and reported continuously, whether managed or staff augmentation. Managed Services reporting has many advantages. It allows for a transparent and relevant end-to-end view of the customer, emphasizing service performance improvement.
The Key Issues in Staff Augmentation Measurement
- The company provides its users with limited and insufficient reporting (mostly on special requests or escalations by the business requirement side).
- Users cannot associate their E2E (end-to-end) experience with the service reporting (which is often simply passed along by an external supplier in the form of KPIs).
- Current reporting does not reflect business impacts accurately.
- Reporting is not a good way to drive the right service debates or stimulate Continuous Service Improvement (CSI).
- Reporting tends not to be business-focused but IT-centric.
Model of Service Performance Indicators
A mature and relevant reporting paradigm is becoming increasingly popular. One that isn't solely concerned with KPIs that aren't measurable or relevant to the end user. Because of the alignment of business incentives within a Managed Service, service reporting is more focused. This increases the value for all parties.
The Managed Services Service Performance Indicator Model is based on what internal customers want (requirements). This results in a shared understanding of the outcomes desired by all parties (supplier IT, internal business customers). The Service Level Agreement (SLA) between the company (buyer) and the supplier (provider) defines the scope of work, pricing model, and key performance indicators (KPIs) to be controlled.
SLAs provide detailed information about the key performance indicators (KPIs) that underpin and drive each SPI (Service Performance Index). The SPI is an indicator of service quality that the customer can relate to and understand. It is the only performance indicator the customer will receive within the agreed-upon reporting intervals.
Comparison of the Models
Transitioning to managed services can be a great option for organizations involved in staff augmentation. This will allow them to enjoy all the benefits and skills access they seek and the disadvantages of staff augmentation.
The key difference between these models is that a managed service model guarantees an "outcome" at a fixed price. Staff augmentation models only offer input. A managed service model is a provider that provides input. This simply refers to carrying out an activity with no guarantee that it will result in the desired outcome. A managed service model is built on preparation. The organization must define the requirements based on service and performance criteria.
Pricing is dependent on the outcome. The associated costs will adjust to the change in service requirements. This allows for the "scalability of demand" that is often desired in staff augmentation models and provides service-related scalability. When linked to managed services, a service commitment is made. The hours worked are the only service obligation under the staff augmentation model. In the managed services model, the provider assumes all risks to meet the service commitment. This adds a lot of value.
The provider assumes the risk of delivery at a fixed price and is thus highly motivated to implement the productivity measures required to meet the service commitment. The provider cannot risk relying on individuals and failing to meet the service commitment. This is evident in the process and tool implementation.
Service providers can also move work easily through global delivery structures with the help of documentation and process rigor.. The service provider can deliver reliable services with fewer, more productive resources using tools, documentation and processes. Managed services are designed to provide an organization with a low-cost, commercially viable service offering.
There are 3 types of Staff Enhancement
Your needs will dictate the type of staff augmentation you choose. There are three main types of staff augmentation: skill-based, highly skilled, and commodity.
Commodity
Staff augmentation via commodity doesn't require specialization. This staff augmentation model is more about urgency than learning certain skills. This type of staff augmentation can include factory work, manual labor, or retail.
Skill-Based
Skill-based staff augmentation is more difficult; it's not surprising. However, this type of staff augmentation does not require a lot of skill. Some examples of skill-based staff augmentation include data entry and typing for clerical work.
Highly-Skilled
Last but not least is staff augmentation. This is the kind of staff augmentation you might need. Outsourced partners who are highly skilled software developers in IT and software development. These professions require experience and training. IT staff augmentation is not an excuse for mistakes in these areas.
How to Successfully Enhance Your Team
There are several steps you must take to successfully augment your team. The IT augmentation process, like the scientific process, should be precise and meticulous.
Identify the Problem
First, identify the problem. You should ask yourself the following questions: "What do I need?" "What am I lacking?" Your permanent employees can also be polled for their thoughts. They are the best people to ask about the successes and failures of your company.
Please Specify Your Needs
Once you have identified your problem, you can describe your needs in many different ways. All of these are important. These are some of the needs that you need to specify:
- Are you looking for staff augmentation that is both short-term and long-term?
- Are you looking for staff augmentation that is skill-based or highly skilled?
- How many people will you need to augment your IT staff?
Research Staff Augmentation Agency
Examine the IT staff augmentation market before deciding on an outsourcing firm. Determine what you're looking for and use that as your starting point for the rest of your search. Don't go for the cheapest option. While the prices should be reasonable, you get what you pay for. Offshore and nearshore outsourcing both have advantages and disadvantages. Before making a decision, weigh the benefits and drawbacks. It will end up being a give-and-take based on your company's needs.
Limit Your Options
Assess your candidates' abilities. You should also ensure that your augmented staff has the soft skills to work well with your team. Make sure you have a good relationship with potential providers. Hiring someone who doesn't get along with others is not a good idea.
Negotiate with Your Chosen Partner
You should negotiate with your IT staff augmentation agency to get all details. People shouldn't manipulate you. You shouldn't be afraid of being honest about your needs, but you should also be rational about your requests.
Sign a Contract
Finally, you can cross your ts and dot your i's. You and your IT staff augmentation partner can sign your John Hancock contract.
When is Staff Augmentation Recommended?
This recommendation for IT staff is for people who want the best of both worlds. Traditional outsourcing involves outsourcing your entire company to an agency that may seem foreign and unfamiliar. On the other hand, staff augmentation allows you to get to know the people you're working with. IT staff augmentation agencies and other highly skilled staff augmentation agencies can assist you in finding a few professionals who will fit in seamlessly with your team.
This flexibility makes it less time-consuming to hire specialists from an IT consulting if you use IT staff augmentation. This can be used to solve ongoing problems or provide a temporary solution.
Checklist: When to choose IT staff Augmentation
If:
- If your in-house development department is weak and you want to increase its strength
- Permanent hiring can be difficult due to a shortage of talent or experience.
- To save money and build a remote culture, you are looking to offshore talent.
- We are looking for developers with experience in disruptive technology that you work on.
Process Flow for IT Staff Augmentation (What We Follow)
To ensure project success, staff augmentation follows the following steps:
Analyze of Requirements: We discuss the business goals and the functional requirements for the project. After thoroughly analyzing the requirements, we meet with the client and developers.
Meeting between Clients and Developers: The client and developers meet to discuss the project specifications and KRAs (key responsibility areas).
Developers Allocation: Following the clarification of the requirements, the developer/s (one or more) are assigned to the project by the client's specifications. This is usually done by the service provider based on their availability, skills, and experience.
Develop: The assigned developers collaborate with the in-house teams to complete tasks within the sprint cycles. The developer/s communicates directly with the client without the involvement of a project manager, a business analyst, or a project manager (unless a PM and BA are also hired).
Continued Support: Throughout the product's life, the developers hired will continue to support and assist. The hiring agency can continue to use the same team for future projects if they are satisfied with their work.
What are the Advantages of hiring additional IT personnel?
IT staff augmentation is the best option when permanent staffing is difficult or prohibitively expensive. These are just a few of the added benefits you should be aware:
Productivity increases: This setup allows you to have an in-house team and professionals from outside organizations working on your project. They will remain focused on the project throughout the process without any interruptions or delays. This has the potential to boost productivity. If you are pleased with their work, you can hire them to work on additional long-term projects. You can also contact them directly with any requests.
Flexibility: Permanent developers will require a long replacement process. It is even more difficult to replace an outsourced team. If an augmented developer is not performing optimally or does not add value, it's easy to replace them.
Cost Savings: The cost-effectiveness of IT staff augmentation is one of the greatest benefits. Assume you need to hire two developers to supplement your existing team. Infrastructure, basic pay, and other benefits are all costs associated with in-house teams. You only need to pay the minimum wage for the two augmented developers and do not need to worry about office space or infrastructure costs. The remainder is handled by the augmented service provider.
Time Savings: A team of developers can be hired from an agency outside the company. This is much faster than hiring permanent staff. When a project is in the discussion, you can save time and avoid the tedious process of training and hiring permanent staff.
Growth and adaptability: The flexible software allows companies to expand their work operations without hiring additional staff. With IT staff augmentation services, businesses have more options than ever before. They can hire people on a per-project basis.
IT Staff Augmentation: Challenges
You must be aware of the issues to make the most of the IT staff augmentation process.
Quality gaps and knowledge
Quality control can be difficult, especially for cost-cutting managers. If the developer's work isn't up to par, it could lead to project cost overruns or poor-quality deliverables.
Cultural barriers
The workflow is influenced by culture and language. Because of differences in culture and ethos, consistency, time zones, language, and attitude to work can be difficult. It can be difficult to control the motivation and accessibility of remote employees.
Security risk
IT staff augmentation can pose a serious security risk. Integration of third-party sources into your workplace environment is a risky business decision. Client and organizational security must be considered. Security audits should be an integral part of the work process to ensure that client data is not jeopardized.
Potential misfits in long-term projects
Sometimes, IT staff augmentation is inappropriate for long-term projects or those requiring continuous inputs. The staff hired could leave during this time, which could cause discontinuity or disruptions to the project.
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Conclusion
Organizational IT Staff Augmentation in the Future. It allows you to hire developers on a project-by-project basis from an outside IT staff augmentation company. Working on a software project requiring experienced extra hands is a great way to fill the team's capacity. You are responsible for ensuring that the option you select improves your value proposition.
