Comparing “Pay-per-Drink” Pricing to Retained IT Services

Choosing options solely based on availability instead of considering their long-term strategic potential can pose difficulties, particularly in the context of partnering with technology providers.

Consider Capability Alongside Skill

When looking for potential candidates, it is crucial to keep in mind the current job openings. Prioritizing the skills of employees over the longevity of those skills can help achieve the desired outcome.

Focusing solely on existing staff members can have negative long-term consequences. For instance, when hiring a UI designer to develop customer-facing applications, there is a possibility that the designs may look appealing, but the user interface might be complex, and there may be no skilled development resources to code the design.

From a technical perspective, it would have been evident that front-end application capabilities were essential, and it could have been implied that a variety of other skills would be required to deliver this integrated capability.

Focusing on skills rather than personalities can lead to better sourcing decisions.

Capacities on Lease with Intelligence

Outsourcing competencies from external providers can often be a more cost-efficient approach. This is especially true if implementing a capability necessitates integrating multiple disciplines. For example, updating an ERP system or creating a virtual reality application typically requires expertise in six distinct skill sets. Unless your organization has enough workload or strategic objectives to justify employing a permanent in-house team, this may not be a feasible option due to high expenses.

If this is not applicable, there are two main ways to acquire skills in the external market:

  1. Pay for expertise as you need it by allocating resources on a time and materials basis.
  2. Invest in a capacity that can be expanded or reduced as per the requirement.

Some companies incorrectly assume that paying for temporary talent can be done solely through the first method. However, there may be instances where having the same team of individuals working for your company for several months is a superior approach to acquiring medium-term staff.

Large-scale projects like system upgrades, mergers, and multinational rollouts can take advantage of a ‘pay-per-use’ model. Working with the same set of experts can result in a well-informed team that specializes in your company and its needs, allowing the task to be completed without incurring the additional cost of employee benefits or training while lowering the possibility of their knowledge becoming obsolete when the project is done.

For customers with diverse or fluctuating demands, purchasing services on a per-use basis can be inefficient and cumbersome. To solve this issue, we suggest designing an app suited for everyday users. Developing a moderately complex software necessitates the involvement of multiple experts, ranging from researchers and product designers to development teams and cybersecurity professionals. It would be a formidable task for a skilled procurement specialist to find and manage all these people, keep track of their availability, and handle the contract and onboarding process.

The Capacity to Purchase

Given the potential shortage of personnel resources, a possible alternative is to outsource “app development capacity” to a third-party. Works’ “nearshoring” approach is just one case of how many IT service providers provide this service, albeit with different names.

By purchasing a capacity, you transfer some of the responsibility for determining the appropriate skill sets needed and maintaining the coordination and balance of various activities. By depending on the supplier, you can “outsource” the job of deciding how many front-end engineers you will require based on your product development strategy. For intricate technological products, your supplier is also accountable for arranging the interactions and transitions between different skill sets.

The significance of managing personnel and resources that facilitate a company in achieving its objectives cannot be overstated. For a software company, having in-house capacity to support extensive, multi-disciplinary technology and design teams could be advantageous, whereas for a manufacturing or consumer goods company, it may not be essential.

Moreover, the ability to purchase provides more flexibility and dependability in terms of pricing structures. One such illustration is buying a “bucket of hours” that can be distributed across various skill sets, such as managerial overhead. Other arrangements include monthly “build and sustain” fees, revenue sharing deals, and licensing and maintenance expenses.

Numerous businesses have difficulty moving away from concentrating on the selection and supervision of individuals to the aspects of quality, scalability and intellectual property ownership, as well as the ongoing upkeep, when shifting from recruiting staff to purchasing a capacity.

Rather than regarding the procurement of a skill as a change in the perception of human ability, consider it as a physical asset. It is critical to contemplate the output, production rate, and support of the supplier providing your capabilities, similarly to how you would not worry about the specific components of a new CNC machine but instead the production rate, quality of the parts produced, and the manufacturer’s support provided.

Conducting a comprehensive evaluation of any possible procurement is crucial before making a decision. Since it entails a long-term commitment than short-term hourly hires, it is crucial to select an organization that can fulfill your evolving needs, scale up along with your business, and offer strategic guidance and operational control that enhances the value of your operations.

Finding the appropriate partner could aid your business in saving time and money that would otherwise be used to establish and maintain sophisticated capabilities, helping to boost its competitive edge in a crowded market.

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