IT staff provider is legally the employer and solves all recruitment, wage, and personnel registration issues. It also conducts accounting and personnel documentation. The business model of such a company is the recruitment and retention of a quality workforce.
IT staff provider undertakes the payment of wages, the payment of taxes, and the execution of all the labor law rules. Employees of IT staff provider spend all their working hours on projects for your company. And they are directly managed by your managers, which is one of the main differences between IT staff augmentation and outsourcing.
If outsourcing is a cab, then IT staff augmentation is car rent.
IT staff augmentation doesn't require anyone to be on staff and then fire them when the project load has dropped. Everything works through a contract with the IT staff augmentation company.
Let us explain using IT projects as an example. The company needs IT staff augmentation if it requires specific specialists (8 front-end developers at the middle+ level, 3 back-end developers, and 4 AWS DevOps). If the request is for a specific task or the execution of a project, it's about outsourcing.
5 problems with IT outsourcing
Sometimes you can't do without bringing in outside experts to solve a big problem quickly. But IT outsourcing has several drawbacks:
- Unreliable IT outsourcing providers. If inexperienced specialists handle tasks like mobile app debugging, the result can be mediocre. Hence the slowdown in the operation of services, the vulnerability of user data, and various reputational risks. The results of the work of any IT outsourcing company need to be checked carefully.
- Difficulties with metrics. Determining the effectiveness and quality of work is not easy, even with full-time employees. And when tasks are handled entirely by outside teams, tracking metrics becomes even more difficult. Without the right metrics, sometimes it's hard to understand what the outsourcing company does and where the money goes. By the way, there are no difficulties with IT staff augmentation. Everything happens in your office and under the direct supervision of your managers. It is possible to use standard metrics the company uses to track its employees' effectiveness.
- Lack of experience in your own IT department. This is the main thing that can spoil outsourcing. Detailed and correctly drawn-up terms of reference, laid down mechanisms of the work check, clear and detailed conditions, and an understanding of the project's weak points are required. If there is no experience with outsourcing, IT staff augmentation is a safer alternative.
- Difficulties comparing price and quality. Which outsourcing studio is better suited to your tasks? Why does one have twice the price? Processes, experience, technology, reputation, management motivation, and the level of programmers can vary greatly. It is impossible to say which executor will do the job better. You do not see the inner kitchen. Again, you must rely on your IT department or consultants, who can determine the most suitable IT outsourcing company and write a clear requirement specification.
- Negative impact on the quality of your own IT department. Internal teams have no reason to develop if the most complex and technologically advanced projects are outsourced. Over time, employees may lose interest in innovation. It is better when the team solves the tasks, albeit with outsourced specialists' help.
The staff augmentation model became widespread in the US and Japan in the 1970s. Although in the IT world, staff augmentation has become more common due to the mass transition to remote work.
Reasons to choose IT staff augmentation for your company
Development teams are augmented in different domains, including fintech (Monobank, Revolut, Wise plc), retail (Deloitte, Gloria Jeans. Walmart), the oil and gas industry (Chevron, Enbridge, Royal Dutch Shell), and mobile operators (CMHK, Zong, CMLink).
Project size is not a key factor either. IT staff augmentation works well for large projects that need constant support and small tasks that can be solved in a few weeks. In the U.S., IT staff augmentation is regularly ordered by small startups that want key people for project development.
Four other factors are crucial in determining whether such a service would benefit you. Below is the list of cases when you should prefer IT staff augmentation.
Your company has competent project managers of team leaders
Your internal team leaders or project managers will set the tasks and directly supervise the work of the involved developers. But they should be at least middle level to make the work of involved developers effective. Ideally, the department should have web developers in the same stack as the augmented specialists.
You need to hire one if you don't have your own managers. Otherwise, IT staff augmentation doesn't work effectively. For some companies, it is easier to use outsourcing, where they can do everything for you from the beginning to the end. But the results of such a choice can be negative.
Your company needs scaling
It happens that you have a competent internal department but not enough employees to introduce new products quickly enough and eliminate all the bugs. Or there is a new major project that requires hiring 20-50 specialists quickly. Or an understanding that the current tasks require expanding the team.
At the same time, there is a big staff shortage in the IT sphere. If you need a few dozen people, and even with certain skills, the HR department will not cope with such a task even for a month. And if you wait too long, the competitors will intercept the idea, and the project will be stillborn.
IT staff augmentation comes to the rescue here so that months are not lost in the search for suitable employees. MaybeWorks provides you with specialists who are ready to join the fight and strengthen the core team.
This is the best way to scale quickly without losing quality. You choose the right specialists from a number we offer and interview them as in normal hiring. And in just a few days, a whole team of programmers is ready to join the project. When the project is completed, there is no need to fire anyone.
Key experts are required
IT staff augmentation is an opportunity to quickly find experts in rare technologies and special languages. Those who have specific skills can increase the quality of project implementation. You need help finding such specialists on the open market. You can either try to poach them from another company, offering huge bonuses, or take them from an IT staff augmentation provider.
You need to create an internal corporate startup
In-house startups are a ubiquitous practice in the industry to bring new ideas to life with maximum speed and acuity. IBM, Google, Maersk, and Microsoft all create mini-startups free from the shackles of the main company. And then, when the project (or its MVP) is created, they tie it to the main company, strengthening their brand and increasing user loyalty.
IT staff augmentation is an excellent way to hire staff for such corporate startups. Unlike outsourcing, the project is implemented in-house, not by a third-party company. The customer manages all the augmented staff. The in-house IT department is immersed in the project's specifics and can better support it in the future. There is no need to attract and feed external outsourcing studios.
Why is IT staff augmentation better than outsourcing?
Here are 4 reasons why IT staff augmentation is better than outsourcing:
- Correct estimation of the service cost. Evaluating projects by fixed price is like taking a pig in a poke. The variation is too significant. Even if the outsourcing company is ready to fix all the shortcomings, a deadline that is not met can disrupt the whole project. IT staff augmentation removes this headache: control over the execution of the project is completely in your hands, and you pay the hired professionals a regular hourly rate. You see which employees are getting your money and for what. If an employee's performance does not meet your expectations, they can be replaced for free.
- Predictable balance sheet. IT staff augmentation makes the accounting department's job a lot easier. Instead of paying dozens of employees, you pay one company that provides staff. As a result, you know how much each month will cost, and the accounting department can directly control the spending of every penny.
- Improve the quality of the work you do. Augmented programmers do not switch between projects but work for one customer only, as in ordinary employment. They adopt the corporate culture, work schedule, and the client's processes. They do not have to jump from task to task. Their mind is on one project, not two or three, as is often the case with outsourcing. Therefore, the quality of their work is much higher.
- Cost savings. IT staff augmentation allows a more rational use of budget and a more flexible use of resources. There are no arguments in the style of "there was no such point in terms of reference drawn up a year ago, and therefore, we will not do it". You have complete control over the specialist's work and can switch him to the more relevant task now.
IT staff augmentation is a worthy option for companies needing to scale IT projects, launch new products quickly, or get key experts. The next time the need for outsourcing arises, you can remember that there are alternatives.
MaybeWorks - your reliable IT staff augmentation provider
- Node.js (Nest.js/Express)
- AWS/Google Services
- Database management (MongoDB, MySQL, PostgreSQL)
MaybeWorks developers have rich experience in diverse domains. For example, we were hired for various FinTech projects, including custom banking, insurance, trading, and blockchain apps. This experience allows our involved front-end and back-end developers to deliver various innovations to financial services.
We were involved in dozens of IT projects for over 10 years, allowing us to extend any IT team or help with any web development issues. Involved MaybeWorks developers assisted in developing advanced dashboards to control various data as well as custom CRM and ERP systems tailored to the needs of the business. As a result, we now quickly adapt to any development approaches and even can adjust internal (your own team) and external (third-party teams) development processes.
Moreover, we were hired for the development of real estate database software, CRM, ERP systems, and property management applications. This experience makes our developers valuable for development teams in any domain.
Feel free to contact MaybeWorks to augment your IT team in the shortest possible time!