According to Dunn & Bradstreet, approximately one quarter of outsourcing contracts are unsuccessful within two years and approximately half are unsuccessful after five years. Additionally, Steve Andriole, a professor of business at Villanova University, has compared the rate of failure of outsourcing agreements to that of marriages, suggesting that the failure rate is similar for both.
An example of outsourcing is the utilisation of freelancers, contractors, or temporary employees through IT staff augmentation companies, or the delegation of work to a business in a different time zone. All of these approaches prioritise short-term and detached management of projects, often entrusting it to individuals who lack a strong commitment to the client’s success.
Andriole noted that cost reduction is the main motivating factor behind all of the outsourcing partnerships they are entering into. He stressed, however, that the most significant challenges they face in these relationships are in the area of project and program management.
When clients entrust software development to external providers, they are relinquishing control of the final result. This can pose a considerable risk. As Andriole stated, companies that outsource software development are essentially “handing up the keys to their competitive kingdom”. It is important to consider whether the potential cost savings are worth the risk of giving up ownership of the product.
Old-Fashioned Methods of Outsourcing Software
The emergence of Software as a Service (SaaS) with its continual integration and delivery cycles has rendered traditional software outsourcing methods obsolete. With this new approach, software is never truly ‘finished’, as individual components are continually iterated upon and refined. Furthermore, successful teams require regular members with specific skills, not just temporary fill-ins. Despite this, it remains difficult to find senior engineers of a high calibre.
Due to the current shortage of engineers in North America, businesses are being forced to adapt quickly to a rapidly changing market. To meet this need, Upgraded Helping Hands has created Version 2.0 of their software outsourcing model. The main purpose of this model is to provide internal software teams with highly skilled engineers who can commit to a long-term position. These engineers are sourced from countries where there is an abundance of talent, but limited job opportunities. Upgraded Helping Hands’ primary goal is to create strong, integrated teams that are able to produce superior products in a more efficient manner. This is in contrast to traditional software outsourcing models which prioritise cost-cutting, or the use of freelancers for staff augmentation.
Staff Augmentation 2.0: A Tool for Constructing Globally Dispersed Teams
Staff Augmentation 2.0 emphasises the delivery of resources to bolster teams in achieving remarkable accomplishments. Not only are hard skills taken into account when assessing and prioritising engineers, but also the soft talents such as leadership, creativity, and problem-solving. After the evaluation process, engineers are placed on client teams that align with their technical and cultural background. Ultimately, the staff augmentation company is responsible for the management and compensation of the engineers. This allows companies in need of software developers to engage experienced engineers as soon as possible, while decreasing operational costs.
When you leverage Engineering Staff Augmentation 2.0, you’re not transferring work to an outside company; instead, you’re bringing in the proficiency your team requires to remain successful in the long run, without the extra overhead associated with hiring and managing a permanent staff. This approach is ideally suited for agile, progressive teams that practice continuous integration and delivery. In the current environment, with pandemics and obligatory shelter-in-place orders, it is also an excellent template to follow. Engineers employed by staff augmentation companies are proficient in collaborating with remote teams and producing software remotely.
Finding outstanding engineers can be difficult, particularly when searching for those with the specialised skills and knowledge that a specific team needs. With Engineering Staff Augmentation 2.0, organisations have access to a pool of highly-qualified engineers that are ready and willing to contribute. This approach makes it easier than ever to work with developers from all over the world and reap the rewards of diverse expert knowledge, perspectives, and ideas. This is not the outsourcing approach of the past, but instead a focus on creating strong, cohesive teams rather than assigning tasks to outside sources.
Related Article: Should You Hire Developers in-House or Outsource Them?