Businesses now have many options when embarking on new IT projects. Traditionally, it was a simpler case of choosing between two options: in-house, if the existing team has the capability, experience and capacity or outsourcing the project. However now organisations have many options that make decisions tougher: managed service providers, staff augmentation, and freelancers to name a few.
Any one of these may be right, or wrong, for your project. But how can you be sure to make the correct decision, especially considering that every organisation, every project is different. It’s a matter of looking at the pros and cons of all options available, and properly evaluating how it could work in different situations.
Option 1: “One man power”
Simpler and shorter projects often need just one expert to carry out the work, and even at this basic level of sourcing, there are a few choices which need to be considered - such as hiring a freelancer or agency worker. While these may be the cheapest options for a small or simple job, there are many considerations that could lead to big issues. For example, when bringing in a freelancer, what happens when that person is off sick or on holiday? Typically the work is delayed or not done. Then there is the question of liability – does the individual have enough insurance to cover any potential damage they may cause, and trust me, IT people can cause considerable disruption if they are out of their depth. While these may seem remote or even trivial issues, the courts are full of cases because proper due diligence wasn’t undertaken.
Then there is the fact that individuals don’t typically have the wider skill base to problem solve, nor have a network to bring people in who can assist with the unexpected. While there may be a compelling reason to go for the cheapest option, you may be saving money in the short term, but in fact there are other hidden costs that need to be considered. For example, it is often very time consuming to find the right candidate yourself, and if you don’t have the right in-house skills to carry out a proper assessment, you are then taking a chance that this is the right person for the job. Then you also have to manage that person, and evaluate their quality of work. Again this may be hard, especially if any assessment is beyond your in-house team’s capabilities.
So overall, this option is good for small, short and typically ad-hoc jobs where there is a fixed outcome and work can be easily assessed. However it’s not great for longer and more complex projects.
Option 2: Staff Augmentation
Staff augmentation has become a very popular strategy, typically used by larger organisations, to carry out projects using both internal and outsourced resources, usually from offshore locations, in order to respond quickly and competently to business objectives. The technique consists of evaluating the existing staff and then determining which additional skills are required.
Using a Staff Augmentation strategy offers businesses extra support in areas they wouldn’t get if hiring an individual. This comes in the form of holiday and sickness support to keep projects moving, as well as offering a much wider selection of people with varying qualifications, skills and experience. The level of support you will get in the selection process varies from company to company, so it’s worth doing your homework on them. The best companies understand not just the people, but have a strong understanding of technology as well. This means that they can make your job easier by pre-selecting candidates, so the onus is not just on you to select the right people. And if it doesn’t work out, then it’s the supplier’s job to find a solution.
This option offers far more flexibility for both small and larger size businesses, especially for ones where there are many peaks and troughs of varying IT projects. Staff augmentation offers the ability to scale up for larger projects, and then scale down for normal work and smaller jobs. It’s also very effective for running multiple projects at the same time.
A typical staff augmentation project starts with a brief; good suppliers analyse the brief, outline the project management and IT resources required and offer options to scale up and down during projects. It is also important to confirm the resources at your disposal, because the more complex projects become, the more people with different qualifications, experience and levels of competency are required. This allows for changes to personnel as the skill requirements change.
Staff augmentation is good for organisations with limited internal capabilities or capacity, where we see that many in-house teams can’t specialise to get to detail of many projects.
On the other hand, it still requires organisations to spend time actually managing the augmented individuals. That means you’ll still have to carry out the day-to-day management of external specialists and pay for each consultant’s time and the materials.
We see that staff augmentation is the first step for businesses starting to use outsourcing in both strategic and effective ways. While not tying them into long-term contracts, it does demonstrate how to migrate their in-house capabilities with outsourced ones; many businesses move to Managed Service outsourcing strategy after successful use of staff augmentation.
While staff augmentation has been designed to deal with bursts of activities and specific projects, it is a half-way option to Managed Services outsourcing which many businesses prefer.
Option 3: Full service managed services
Without doubt, this is the most sophisticated option to service IT – from projects through to entire global systems.
The first step to introducing a full service managed service is to have a strategy. This clearly sets out what the business wants to achieve, not just in the short term, but a longer term vision as well. The strategy is vital, as this will outline objectives, KPIs, innovation required and a whole range of other measurements which will formulate the approach, binding contract and delivery of the service. This is where success begins.
Of course, this comprehensive service commands a bigger initial outlay, but the longer term returns will be significant to an organisation if done correctly. The right partner will assist you and guide you through this process. Ultimately this option helps businesses focus on their core competency, and pushes responsibility to a specialist third party which can not just keep things ticking over, but inject innovations, continuous cost savings and measurable ROI.
This means the pressure is on the supplier to deliver to the letter of the agreement, and depending on the supplier/vendor, you get value adds which include continuous problem solving, innovations and an overall progression of the technology. Do your homework, as there is a big difference between good and great suppliers. The great ones completely take the burden away, yet you still feel that it is the in-house team delivering. Thus the relationship becomes more of a partnership.
In terms of payment, managed services can either be billed by time spent and materials used, or can be costed according to the service delivery, not the number of people or hours required to do the job. The latter option is beneficial to organisations in a number of ways. For one, it means that IT can be budgeted for – no shock bills and other hidden costs. It also means that the supplier has the motivation to bring in more innovation and automation and which as a result reduces the cost of the service. If chosen wisely, the external providers are able to grow with you and your business. And as it’s a longer term proposition, this means businesses can develop for the future without having to worry about today.
Selecting a vendor is a big decision for any organisation, and with a new set of best practice, it is important to consider all options, but whichever you choose, your supplier needs to be committed, agile and accommodating.
Scalability is essential to businesses operating in today’s markets, so look out for suppliers that can offer both staff augmentation and full project outsourcing services, to meet your business objectives. Whether you require one competent consultant or wish to leave the entire project in the hands of an external service provider, this will allow you to get the best of both worlds and enable you to scale up or scale down according to individual business needs.
In conclusion, it’s quite simple - think long term but commit short term. As the typical IT infrastructure now has a shorter life cycle, make sure your IT grows with your organisation, and preferably ahead of it in order to remain competitive.
Robert Barbus, EMEA Operations Manager, Soitron
Image Credit: SFIO CRACHO / Shutterstock