Outsourcing IT is becoming an increasingly popular way for companies to scale their businesses without hiring full-time staff. According to Statista’s Global Outsourcing Market Size report, outsourcing amounted to $85.6 billion USD worldwide in 2018.
We’ve weighed up the pros and cons of two principal software outsourcing approaches, IT staff augmentationand delivery teams:
What is IT Staff Augmentation?
Staff augmentation is a strategy used by companies to bridge the technology skills gaps in their workforce. Qualified external workers are brought in-house to work alongside existing full-time development staff.
IT Staff Augmentation: The Pros
Increased Control Over Projects. Companies with augmented staff generally have more control over their development project. IT Augmentation enables organizations to train external teams to work in line with existing processes. Having everyone under the same roof ensures complete visibility and lets companies monitor projects in real-time, enabling them to guide workflows effectively.
Reduced Staffing Costs. With staff augmentation, companies can reduce the costs and expenses associated with recruiting full-time staff. Hiring a temporary team is much more cost-effective than hiring full-time developers. There’s no need to commit to full-time salaries, pension contributions, health care, holidays, sick leave and other expenses associated with permanent teams. With a freed-up budget, funds can be channeled into other core areas of the business.
Enhanced Flexibility. Augmentation allows companies to be flexible. For example, a business may need to ramp up its IT support in the summer months due to staff holidays but cut back over winter when resources are more freely available. If a large development project surfaces, companies have immediate access to the skills and expertise they require.
IT Staff Augmentation: The Cons
Internal Skills Gaps Remain. Occasionally, companies can become too reliant on IT staff augmentation. It can become too convenient to lean on skilled external staff as an alternative to training an in-house team. Permanent team members can often feel that their skills aren’t progressing if management gets into the habit of commissioning contractors at every turn.
Projects Can be More Difficult to Manage. The bigger the in-house team, the more challenging a project can be to manage. Augmented staff often aren’t aware of a company’s underlying principles and may be used to different workflow processes. This can make it challenging to monitor quality assurance and individual responsibilities. A largely augmented team can also result in high-cost billable hours, which makes it difficult to determine who is adding value to the project.
What Are IT Delivery Team Services?
A delivery team service is when an outsourced provider takes responsibility for all, or part of a project and makes commitments that augmented providers typically don’t.
Delivery Teams: The Pros
Reduces Project Risk. IT outsourcing partners help reduce risks. A good outsourcing team will ensure that companies are compliant with all relevant regulations. They will identify any potential risks and implement a robust cybersecurity strategy. Microsoft Store’s Small Business Insights Survey revealed that 70% of small businesses would prefer to pay for support in matters of cybersecurity than do it themselves.
More Defined Outcomes. An experienced IT delivery team will work towards defined outcomes. Every project needs to have a clear set of objectives and goals with a robust workflow in place to achieve them.
Project Commitment. Delivery teams are accountable for meeting the service commitment and sharing the risks associated with the project. As such, they’re completely focused on delivering on the goals set by the client.
Delivery Teams: The Cons
Deferred Control. Companies need to relinquish a degree of control over development projects when they choose to outsource to a delivery team provider. Having less control can make it more difficult for clients to retain oversight on progress, which can have a knock-on effect on the success of a project. According to SourceSeek’s 2017 Global Software Services Report, 12% of development projects fail due to a lack of communication.
In saying this, an experienced delivery team will have project management tools and robust processes in place to ensure that the client is provided with regular updates on progress.
Potential Downtime. With delivery teams, downtime is sometimes to be expected. Unlike augmented teams, delivery model providers are less likely to be able to fix an issue or make changes straight away. If external development teams are on different time zones, for example, there can be a delay in making updates or fixing bugs. Periods of downtime are more common when the delivery team is based offshore, although some do offer 24-hour support.