Staff Augmentation Vs Hybrid Approach Vs Project Outsourcing – IT Service Models
It Service Models – Staff Augmentation Vs Hybrid Approach Vs Project Outsourcing
Do you know the secret formula to acing your IT projects? It is product delivery done within time, to the right specifications and well within your budget. Sounds pretty lucid? But it isn’t. Largely, there are three service models available to companies for project execution:
- Staff Augmentation
- Project Outsourcing
- Hybrid Model
And companies have been struggling with permutations and combinations of these three since forever. Result? Every so often, while you are halfway through your project while following one model, you suddenly discover the usability (and better suitability) of another model.
Read below to grasp a clear understanding of the three most popular IT service models (Staff Augmentation Vs Hybrid Approach Vs Project Outsourcing) and then decide for yourself, which one suits your business best.
Staff Augmentation :
Did you ever find yourself short on skilled workers for any particular job? Maybe you have a treasure trove of the best coders in town but your design team could do with some extra helping hand for the recent project you have managed to secure? That’s where Staff Augmentation comes in.
It is the process of hiring people with specific skill set for any particular project for a pre-defined interval of time. While it helps in maintaining a lean workforce at any given interval of time, this model comes with its own set of advantages and disadvantages.
The advantages of the Staff Augmentation model are listed under:
- Cost effective: Staff Augmentation is cost effective in the long run since it helps you put to use the skill set of contractual employees without having any of the liabilities of the permanent workforce. It is based on the times and materials based pricing model. How much time one invests and what materials have been put to use to achieve the final outcome, decides the total cost incurred by the organisation.
- Lean Staffing: Staff Augmentation helps you maintain a lean staff, i.e. just the right number of workers for whom the organisation would be liable and whose skills are indispensable.
- Zero internal resistance: Since most of the hired staff are working in the organisation for a limited time, their resistance to work pressure would be comparatively low. It serves the dual purpose of getting more hands on deck without the extra burden of having to worry about any sort of resistance within the organisation.
- Expert services: You know you are going to hire only the best hands on deck for a particular project when you are opting for Staff Augmentation Model, the greatest advantage of which is that you can tap into expert skills and services! It gives your project outcome the competitive edge which every firm so eagerly pursuits.
- Knowledge transfer becomes a piece of cake: If you are hiring senior professionals on contract, it helps your team learn from the best, albeit, without incurring any extra upskilling cost which might otherwise have had to be incurred by the organisation.
- Managing tasks becomes easier than ever: You do not expect your contract employees to spend time and energy looking for solutions, but yes, the task at hand would be completed in no time. And like they say, every small task leads to a bigger solution in the long run!
Just like every coin has two sides, there are both advantages and disadvantages for the Staff Augmentation model. The disadvantages are as follows:
- Initial training costs burn a hole in your pocket: Whether it be hiring for a long term or for a fixed interval of time, both demand adequate training to fill the role in the organisation. And when you keep on being in the hiring loop, cycling around new talent, your training costs shoot up the roof in almost no time.
- Supervising challenge: It is never enough to just hire fresh talent for a fixed job for a fixed interval of time. There is always a necessity to provide adequate supervisors for a worthwhile outcome. Else you’ll find the overall cost remaining almost the same without any significant improvement in the final outcome.
Plus managing the supervisors also becomes a task; in short, you need a proper and broader management system in place if you are opting for the Staff Augmentation model in your organisation. And, no doubt, this would stretch your budget too!
Project Outsourcing Model:
You must have heard many people stating multiple times that they have been hired for a specific project. Or, heard your friends boast of bagging exclusive offshore projects? That is what the Project Outsourcing Model is.
Also known as Managed Services Model, the Project Outsourcing Model is particularly attractive for its cost-effectiveness and lack of direct management responsibility. Here is a list of advantages you can enjoy with the Project Outsourcing Model:
- Bid your training costs goodbye: You have just outsourced the project, implying, you can just sit back and relax while waiting for the performance sheet to be filled up, without moving a finger.
- No management overhead costs: Since there is no additional hire in your company, you do not need to arrange a supervising team in your organisation.
- Significant leverage in case of large projects: When larger projects are in the pipeline, it is always easier to proceed using the Project Outsourcing Model, since sharing the risk and managing the pain points becomes easier.
- Shared risk: It is not just you putting your neck on the line. Your offshore project partner takes up the maximum risk for your project completion. They have to be smart about their management structuring, delivery timelines and expenditure management.
Listed below are the disadvantages of the Project Outsourcing Model:
- No organisational belongingness: This is always one of the primary side-effects of the Project Outsourcing Model. Since the hands-on-deck are not necessarily employees of the company, the lack of dedication becomes a cause of major concern in the Project Outsourcing Model.
- Conducting quality checks: Since you have outsourced the complete project, keeping a tab on the quality standards of the final product becomes a task.
While Staff Augmentation vs Project Outsourcing might be difficult to choose from, there is another service model available, which weaves together the best of both worlds – the Hybrid Approach.
Some of the industrial issues are best addressed through Staff Augmentation while the others are best catered through Project Outsourcing. Though it might be difficult to choose from either, at times, mingling both these models together could provide you with the ideal solution you were looking for. The best part is you can blend these two models at different stages, thereby giving you the freedom of choice as well as variation. The only thing to be kept in mind is that careful planning is a must in such cases.
Most common in case of software development outsourcing, where strategic costs and an absence of adequate talent pool makes onshore operations difficult, many companies have outsourced their requirements to organisations set continents apart. While a close watch on the structuring and operations is a must, it solves the greater problems quite smoothly. The myriad advantages of the Hybrid Approach are listed below:
- Predictability: Project management itself incurs many on-the-moment kind of expenses, however in this case, you are well aware of your monthly or weekly expenses. This predictability helps you structure your finances as well as scale up or scale down your output accordingly. Certainty certainly brings in ease of business.
- Accessibility to a larger talent pool: You may have been stuck to a limited talent pool in your hometown, but the moment you decide to look outside, you will find yourself surrounded by a vast talent resource waiting to be tapped into. How does this help? This helps you put to use fresh talents and creativity which are in all probability, not available to your competitors. Not only does this give you a competitive edge, it also positions your organisation to avail the best services at a minimal cost.
- No need for organisational structuring: Yes! While the offshore team would be your very own, yet, it would not carry the hassle of having functional structuring to be done by you. That would be your project partner’s headache. Your partner would look after the HR and admin departments, manage store and marketing sections, it would be just you looking at the budgetary expenses. Sounds convenient to have a remote team, right?
- Blended rates: You can choose from a variety of pricing models available in the market. Whether it be paying hourly to your augmented staff or going for milestone-based pricing in the latter stage of your project, the pricing depends on your hands and helps you arrange your budget as such.
While there is never a fixed answer as to which of these models would be the best, it usually depends on the kind of work you have at hand. At times, if it is just a simple process of looking for a good coder, there can be nothing better than a remote augmented staff who would deliver the best services at minimal expenditures. At times, you need to set up a whole offshore project team to address specific long-duration work at hand. If it is designing a new software tool or addressing a major crisis, you need to have your own team who would shoulder all responsibilities. And in many cases, a hybrid approach works best.
You can get the groundwork done through augmented staff and then set up a team to build on it further and on a much larger scale.
The best thing would be to look for expert advice and come up with the best service model, specially tailored to your needs.
Heptagon Technologies in India provides the best IT services when it comes to your specific project requirements. Right from helping build innovative and smart software’s from scratch to coming up with practical solutions for day-to-day problems, Heptagon Technologies has carved a niche for itself in the IT services sector. Here are some of their best achievements for you to have a look through:
Digital Hundi Platform for the Lakshmi Vilas Bank in New Delhi
While the banking staff faced issues with keeping track of donations offered at various gurudwaras across the city, Heptagon technologies came up with a digital kiosk solution to facilitate digital money transfers. Not only did this aid in seamless cash allotment for various gurudwara initiatives, it also helped manage the donation money and donor details smoothly. Nearly 4000 donation transactions with about 3000 registered users were documented.
The Coimbatore City Municipal Corporation Grievance Redressal Platform
Having the distinction of being selected to be one of the forerunners in the smart city initiatives by the Indian government, the CCMC found it difficult to manage the services and infrastructure needs of Coimbatore. Managing the manual records were becoming a pain point in the system. Heptagon Technologies rose to the occasion and came up with a software wherein citizens were made a stakeholder to the problems and they could share their grievances on an app with a valid ID proof. So far, around 11000 grievance cases have been addressed using this app.
Student Engagement Solution in Malaysia
Designed with the aim to make one of Malaysia’s leading university campuses a smart campus, this app was particularly helpful in addressing the slow internet connection in the campus and the pain of scanning different websites for complete event information by the students in the campus.
With different sections devoted to both guests and students separately, the app helped improve the campus experience for students and is rated 4.5 at present. Plus, the architecture is such that the university can rent out the framework to other colleges and capitalise on it as well. Isn’t that fascinating?
You can avail our expert services here.