Outsourcing development staff — a guide for team augmentation solutions
As the software development industry reaches all-time highs, flexibility and innovation often become the heartbeat of the process. It becomes vital for businesses around the world to find and leverage the right balance between expertise, effectiveness and cost-efficiency.
Nowadays, companies can gain access to a wide range of expertise in software development. It’s easier than ever to access a wide range of workforce providers that will help you balance out your need for expertise in the most flexible way possible. This, along with many other factors that we define below, drove the popularity of team augmentation through the roof over the past years.
In this staff augmentation guide, we take a deep dive into the pros and cons of team augmentation, cost-optimization practices and project management in the process.
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What are the pros and cons of staff augmentation in software development?
Outsourcing workforce in the IT industry can often make or break a project. Therefore it’s vital for businesses to be fully aware of the pros and cons of staff augmentation, especially when venturing into this for the first time. To help you through, we have outlined below the main benefits and challenges team augmentation can bring:
What are the benefits of Team Augmentation in Software Development?
There is a good reason why staff augmentation practice is trending around the IT world, embraced by companies of all sizes. Below we listed the main benefits of staff augmentation on software development and IT projects.
Flexibility is hands-down one of the main benefits of staff augmentation in IT and software development. Scale up or down on demand through hassle-free team adjustments. Adapt to workload fluctuations easily in the most cost and time-effective manner possible.
On-demand access to development teams
One of the primary benefits of team augmentation is that it allows you to tap into a global pool of talent on demand. This allows for increased flexibility but, most importantly, adds quality to projects by facilitating access to specialized expertise from around the globe (from development to design and beyond).
We assume you know the mighty costs an in-house team can bring. From salaries to benefits and infrastructure, traditional hiring is, bar none, the most expensive option. Therefore, team augmentation is the most cost-effective option since you’ll only have to pay for specific services and worked hours. From an ROI perspective, staff augmentation can do the trick for most software development projects.
Through staff augmentation, you can assemble the perfect team of professionals without the lengthy scoping and hiring process. As speed is crucial for projects with tight deadlines, choosing on-demand development teams is often the wisest option.
Reduced administrative burden
As you know, the scoping, hiring, onboarding and management of new staff can be consuming on all types of resources. Team augmentation allows you to skip over most of these administrative tasks saving valuable time and effort in the process.
Core activities prioritizing
By outsourcing tasks or whole projects to remote staff, you can allow your in-house team to focus on core business functions, improving productivity. Besides, this will help you ensure optimal resource allocation in each phase of your development project.
What are the downsides of Team Augmentation in Software Development?
Like every other practice out there, team augmentation comes with its own set of challenges that have to be mitigated. Below we listed the main downsides of staff augmentation practice, documented from our very own experience.
Based on the part of the world where you choose to outsource your development, remote teams can face communication issues due to language barriers, cultural differences and different time zones. All of those can make remote teams challenging to manage and should be addressed before signing a contract by choosing the right specialists for your specifics.
Complicated team integration
Sometimes, integrating more developers into a project can prove problematic. It’s important to have processes that allow for the seamless integration of new staff into existing teams without impacting the collaboration and existing workflow.
Quality control management
As a reputable company, it’s vital you manage to ensure the consistent quality of what you deliver. Sometimes, when working with on-demand development teams, there may be differences in work standards and practices that will impact the project quality. Again, this can be mitigated by choosing specialists or workforce vendors with proven expertise.
Dependency on external providers
Companies that base their operating model on staff augmentation often create dependency issues. Being dependent on specific expertise that might not be readily available at certain times can cause serious trouble in regard to fulfilling the obligations afferent to the project.
Intellectual property rights
Although this can normally be easily mitigated through robust legal agreements, protecting sensitive information becomes a bit more complex when working with staff extensions. Again, most of the concerns regarding intellectual property and security liabilities can be solved through well-drafted, fool-proof contracts.
Fragmented team dynamics
Often enough, augmented staff might not share the same level of commitment or sense of belonging as in-house employees. This can make managing team cohesion and morale a bit more difficult.
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How can you choose the most cost-efficient staff augmentation option?
We get it. You’re in business. It’s normal for you to look for a better deal. Yet cost-efficiency is not always about the cheapest option. It’s about finding ways that allow you to minimize expenses while maximizing output value. And this guide is here to help you prepare for that. Here are four steps to help you ensure a cost-efficient staff augmentation process.
Step 1Assess your needs and objectives
Clearly define the skills, expertise, and roles you need to augment your team effectively. Determine whether the need for additional staff is short-term or long-term and establish a clear budget.
Step 2Source talent effectively
Efficient talent sourcing is key to cost optimization. Seek talent that precisely matches the skills required for your project, avoiding overqualified or underqualified hires. Leveraged global talent pools to access high-quality, cost-effective expertise.
Step 3Select your vendor carefully
Carefully evaluate potential vendors based on their track record, reputation, and ability to provide the required talent. Negotiate competitive rates and terms with the vendor to ensure cost efficiency.
Step 4Monitor and optimize as you go
Define clear KPIs to control productivity and ROI. Regularly review team performance against project goals and adjust team size as needed. If needed, invest in training for enhanced efficiency to reduce reliance on external expertise.
How do we measure the ROI on augmented staff in software development?
Step 1Define objectives and goals clearly
Always start with SMART(specific, measurable, achievable, relevant, and time-bound) objectives for staff augmentation. Be clear about what you want to achieve through team augmentation.
Step 2Determine all costs associated with staff augmentation
Always do a detailed analysis, breaking down all the costs associated with the staff augmentation process. Include salaries, fees, recruitment costs, onboarding expenses and any additional infrastructure or software costs.
Step 3Identify and measure benefits
Determine all the benefits and value generated by the augmented team. This includes time and cost savings and any quality improvements brought by the team. Make sure your also take into consideration the faster time to market and in-house teams productivity enhancements driven by the staff augmentation.
Step 4Assign monetary value to benefits
You can assess the cost savings by comparing the cost of augmented staff to the cost of hiring full-time employees or calculate the additional revenue generated due to faster time-to-market.
Step 5Calculate the human capital ROI
Use the following formula to calculate the ROI.
ROI = (Net Benefit / Cost of Staff Augmentation) x 100
*Net Benefit = Total Benefits – Total Costs
*Cost of Staff Augmentation = Total Costs
Step 6Adjust as you go
Measuring the ROI can either be done retrospectively or as you go. To ensure you can maximize the output of the project, we recommend the latter. By continuously monitoring the project’s progress and ROI as it develops, you can adjust and optimise at the right time, saving valuable resources in the process.
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FAQ — Staff Augmentation in Software Development
What are the key benefits of staff augmentation in software development?
Staff augmentation, for software development at least, brings a wide array of benefits. Amongst the most mention-worthy ones are the flexibility, cost and time-effectiveness and reduced administrative burden. At the same time, you get access to a global talent pool while focusing your internal resources on other core activities.
What are the main challenges associated with team augmentation?
For all the benefits, staff augmentation can also bring its own challenges. Amongst the most common challenges in software development team augmentation, we have mentioned staff integration, quality control management or communication barriers based on the location you choose to outsource your development.
How do I choose the most cost-efficient staff augmentation option?
Golden advice: don’t rush into it, even if there is time pressure on you. Carefully evaluate the project needs and select your vendors based on proven expertise and reputation rather than cost. In many cases, the cheapest options can prove to be the most expensive ones in the long run. It’s better to do your homework and centralize your options so that you can negotiate more competitive rates.
How can I measure the ROI on augmented staff in software development?
Explore how you can measure the ROI value of augmented staff in this section above. To simplify the process, ensure you have your objectives mapped out correctly and have identified all the costs associated with the staff augmentation process.
What is the significance of defining SMART objectives for staff augmentation?
Especially in team augmentation, having SMART objectives can help you gain a clear framework for outlining what it is you want to achieve. It can offer you a clear idea if team extension is a viable solution for your company or if you choose the right approach or partner company for the job. It will also help you and the developers have clear priorities and a better partnership.
How can I avoid challenges associated with team augmentation?
Most challenges associated with team augmentation can be effectively mitigated when approached in a timely manner. Effective project management, robust legal contracts and choosing the right specialists for your specific needs are all key to ensuring success from start to end.
How often should I review the performance of augmented staff?
Ideally, you need to monitor team performance throughout the project development. Once the project is finished and delivered, a retrospective review can help you gather the data you need in order to optimize any future projects based on remote or on-demand development teams.
Can staff augmentation be a long-term solution for software development projects?
Yes, staff augmentation can serve as both a short and long-term solution, especially in the IT sector. Companies can scale effectively, leveraging the flexibility of team augmentation strategies, ensuring growth as they go.
What skills should I look for when augmenting a software development team?
Can I scale the augmented team up or down based on project needs?
Yes, one of the key advantages of staff augmentation is its flexibility. You can easily scale the team up or down based on project requirements. This scalability ensures that you have the right number of resources at all times, optimizing costs and productivity.
How do I ensure data security when augmenting a team?
Ensuring data security is crucial. When selecting a staff augmentation provider, inquire about their security protocols, such as data encryption, secure communication channels, and adherence to industry standards like GDPR. Additionally, sign robust confidentiality agreements to safeguard sensitive information.
What happens if a team member needs to leave mid-project?
Staff augmentation providers typically have backup plans if a team member needs to leave unexpectedly. This way, a professional can be replaced with minimum effort to minimize disruptions and ensure the project timeline and workflow. However, this question should always be raised and legally covered upon agreeing with a workforce provider.