Staff Augmentation

Staff augmentation is an outsourcing technique used to achieve organizational targets efficiently. This approach involves assessing current employees and determining the need for additional expertise. The economic benefits, improved organizational productivity, enhanced customer service, access to emerging technology, and increased versatility make staff augmentation a popular choice for outsourcing businesses.

Can Staff Augmentation Save Your Revenue?

Absolutely. Utilizing staff augmentation services can lead to significant cost savings for your company, often reaching up to 70% or more in certain cases. Read on to discover how this strategy can work wonders for your business.

According to a report by Global Workplace Analytics, a remote workforce can save companies an average of $11,000 per employee per year. By leveraging staff augmentation and tapping into remote professionals, companies can achieve substantial savings without compromising productivity.

Reasons Behind Companies' Adoption of Staff Augmentation

Companies aiming to expand their workforce and execute IT strategies often find value in entering contracts with IT consultancy firms that provide highly skilled workers. This approach offers cost savings compared to hiring additional in-house staff.

Companies have the flexibility to directly select employees and utilize various approaches for their staff augmentation model. The vendor handles logistical and operational matters while the company focuses on core projects with its augmented teams.

Did You Know?

• Approximately 300,000 jobs are outsourced annually in the US.
• In 2020-2021, about 55% of small firms had intentions to outsource business processes.
• The US Staffing Industry is projected to exceed $150 billion by 2024, according to Research and Market Study.

Maximizing Cost Savings Through Staff Augmentation

Staff augmentation proves to be a cost-effective solution for businesses, yielding several benefits:

Recruitment and Training Cost Savings

Recruitment is a costly procedure. When recruiting a resource, internal recruiters must identify potential candidates, assess them, and navigate through complex interview procedures. Venturing into new markets often necessitates additional labor or costly partnerships with organizations that offer enterprise-level hiring solutions.

Employee raises can lead to significant cost savings. With increased staffing, companies gain access to the global IT services they require while curbing unnecessary expenses. Workloads and costs tend to rise during the hiring, training, and onboarding processes. Increasing your workforce in various sectors can enhance team capabilities while maintaining cost efficiency. By streamlining the team's workload and minimizing expenses, additional work is alleviated.

A study by Deloitte found that the cost per hire for a full-time employee can range from $4,000 to $7,000. In contrast, staff augmentation allows businesses to skip these expenses and access skilled individuals at a fraction of the cost.

Easy Scalability

Scaling your workforce cost-effectively is achievable through staff augmentation. By curtailing expenses and attracting top-tier talent for projects, businesses can achieve faster growth compared to hiring additional full-time employees. Workloads across various sectors are in a state of constant evolution. 

Opting for temporary hiring presents an ideal solution for maintaining project-by-project control while adhering to both current and future requirements. This approach allows for increased output without compromising project efficiency.

Additional Costs 

Companies require robust strategies to navigate emergencies effectively. For instance, the COVID-19 pandemic compelled workers to transition to remote work. Having an augmented team can significantly mitigate expenses during such situations. Notably, in situations like these, the flexibility of an augmented team can yield cost savings.

Recruiting the wrong employee can lead to substantial financial losses, a challenge that is becoming increasingly prevalent. However, employing a remote approach can help you secure the best candidates. Once you onboard individuals who possess the necessary skills, backed by positive reviews and performance records, the likelihood of assembling the right team increases significantly.

By adopting a remote work setup, you can also achieve substantial savings. Operating remotely eliminates the need for extensive office space, potentially saving thousands on rent. Additionally, expenses related to utilities, furniture, equipment maintenance, security, and other overheads can be significantly reduced.

Retain Control

While staff augmentation involves a form of outsourcing, it empowers businesses to retain control over their teams. A significant advantage is the ability for companies to closely monitor the progress of their temporary workers. This approach often mitigates challenges associated with fully outsourcing tasks to external entities. It aids businesses in safeguarding the confidentiality of their projects while facilitating project evaluation.

Introducing a new team can bring forth insightful suggestions for refining projects or procedures. This external perspective targets enhancements and bolsters workplace productivity and innovation. 

Furthermore, each workplace possesses a distinctive environment. Project-based, temporary team members are less likely to become entangled in office politics, making them conducive to focused collaboration.

Engaged and Dedicated Employees 

Remote workers tend to be highly engaged in their tasks, displaying a strong sense of attentiveness. They generally take fewer leaves unless faced with emergencies. 

Moreover, they are likely to dedicate more time to work, as they eliminate the need for travel and enjoy the comfort of their chosen work environment. This commitment results in a notably low turnover rate, serving as a potent retention tool for businesses. 

The increased efficiency in task completion enables the pursuit of additional projects with the same team. Ultimately, this presents a cost-effective and sustainable approach in the long run.

Factors to Consider When Calculating Savings

Hourly Rates and Contracts

When evaluating the potential cost savings of staff augmentation, hourly rates and contract durations play a crucial role. While augmented staff might have slightly higher hourly rates, these costs are offset by the absence of long-term commitments and the flexibility to hire for specific project phases.

A study by Staffing Industry Analysts found that, on average, the blended hourly rate for staff augmentation is approximately 15% higher than for full-time employees. However, when you factor in the savings associated with recruitment, training, and benefits, the overall cost-effectiveness becomes evident.

Hidden Costs

While the cost savings of staff augmentation are impressive, it's essential to consider potential hidden costs. These may include communication tools, project management software, and initial setup expenses for remote workers. However, these costs are typically lower than the continuous expenses of maintaining an in-house team, making the overall cost advantage still substantial.

Best Practices for Maximizing Savings

Clear Project Scope and Goals

To ensure optimal cost savings through staff augmentation, start by defining a clear project scope and goals. This clarity helps in avoiding scope creep, which can lead to unnecessary costs. Effective communication with augmented staff is essential to align expectations and prevent budget overruns.

Effective Project Management

Project management plays a vital role in optimizing staff augmentation for cost savings. Project managers are responsible for efficient resource allocation, task delegation, and timeline management. A well-organized project ensures that augmented staff members are working on tasks that directly contribute to cost-effective outcomes.

Regular Performance Assessment

Regularly assessing the performance of augmented staff members is critical to ensuring that you're getting value for your money. If a particular resource isn't meeting expectations, staff augmentation allows you to switch to a better-suited professional without the costs associated with terminating an employment contract.

Conclusion

Businesses are increasingly turning to staff augmentation to save a substantial portion of their annual expenses. Alongside the points discussed in this article, several other factors contribute to the exponential growth potential and up to 70% revenue savings that staff augmentation can offer.

The Staff Augmentation vs Managed Services comparison is taking off and getting popularity in the IT industry. Both are popular among organizations and businesses that want to optimize their operations. But how do you know which one is right for your organization? We’ve covered the topic in detail while discussing both processes at length.

In today's competitive business landscape, organizations, especially IT companies, need skilled professionals with the right experience. However, it can be challenging to decide which staffing solution is the best fit for them. Two popular strategies that can help address these concerns are staff augmentation and managed services. And while both approaches involve leveraging external resources, there are distinct differences between the two.

In this blog post, we'll explore staff augmentation and managed services by comparing their key features. You’ll get to know their definitions, how they differ as well as their benefits and drawbacks. By understanding these, you'll be better equipped to determine which approach is the right fit for your business.

So let’s start with the basics!

What is the difference between staff augmentation and managed services?

Staff augmentation involves hiring temporary resources under the client's control. In short words, the client gets a designated amount of hours with specific personnel.

Whereas managed services involve outsourcing functions to a specialized service provider. The provider assumes responsibility for managing and delivering those services or a particular function.

Staff Augmentation vs Managed Services Model - Broad Comparison

Both staff augmentation and managed services are two different models for obtaining external resources to support business operations. Below are broader aspects of managed services vs staff augmentation comparison. 

Understanding Staff Augmentation

In general, staff augmentation is the process of hiring additional personnel to supplement the existing workforce. Usually, this is on a temporary basis and these individuals work under the client's supervision and management.

Staff augmentation is on the rise and so are the spendings on the services. This market is expected to grow with a 3.53% CAGR and is expected to become an $81.87 billion industry.

Definition of Staff Augmentation

Staff augmentation involves hiring external staff members who work alongside the existing team on a temporary or project basis. It is a versatile staffing strategy that enables organizations to fill skill gaps. You get to augment your workforce with external professionals or contractors. This way your organization can enhance its capacity and flexibility without a long-term commitment to hiring full-time employees.

Benefits of Staff Augmentation

The main objective is to supplement the existing workforce with specific skills and expertise, addressing skill gaps and increasing operational capacity. Staff augmentation offers several benefits that make it an attractive option for organizations, including:

Flexibility and Scalability

Staff augmentation provides the flexibility to scale the workforce up or down based on project requirements and timelines. Organizations can quickly onboard or release staff members as needed.

Access to Specialized Skills

By augmenting the existing team, organizations can tap into a larger talent pool. You can bring in professionals with specific skills and experience that may not be available within your internal team. This allows for the efficient execution of projects and tasks.

Cost-Effectiveness

Staff augmentation can be more cost-effective than hiring full-time employees. Organizations can avoid the overhead costs associated with permanent staff, such as benefits, training, and equipment. They only pay for the services provided by the augmented staff members.

Faster Time to Market

With staff augmentation, organizations can expedite project timelines and meet deadlines more efficiently. The additional resources help distribute the workload and ensure timely project completion.

Knowledge Transfer

The external staff members bring their expertise and industry knowledge, which can benefit the existing team. Through knowledge sharing and skill development, they can contribute to the overall growth and capabilities of the organization.

Limitations of Staff Augmentation

While staff augmentation offers numerous advantages, there are also some limitations. It comes with certain challenges and considerations that you must keep in mind:

Limited Control over the Outsourced Team

As the organization retains control over project management, it is responsible for coordinating. For this, you have to align the efforts of the augmented staff members with internal teams. But since they aren’t your full-time employees, you will have limited control over this team. Therefore, effective project management practices are crucial to ensure successful outcomes.

Potential Communication Challenges

Working with external staff members may introduce communication challenges, especially when language barriers or cultural differences come into play. Clear communication channels and regular updates are essential to maintain alignment.

Time and Effort Required for Managing the Augmented Staff

Integrating external staff members seamlessly into existing teams can require effort. You may have to set rules and guidelines in terms of communication, collaboration, and team dynamics. Moreover, clear roles, responsibilities, and expectations need to be defined to ensure smooth collaboration.

Retention of Intellectual Property

With external staff members coming and going, organizations need to be mindful of protecting their intellectual property. Proper agreements and contracts should be in place to ensure confidentiality and ownership rights.

Best Use Cases for Staff Augmentation

Staff augmentation is particularly suitable for the following scenarios:

Temporary Skill Gaps: When organizations have short-term skill gaps, staff augmentation provides a quick and efficient solution. Hiring external professionals during a sudden surge in workload allows organizations to bridge the skill gap. Above all, the company or manager can ensure timely project completion.

 Project-Based Work: Staff augmentation is well suited for projects that have a defined scope and duration. Organizations can bring in external resources specifically for the duration of the project. This will ensure that the necessary skills are available without long-term commitments.

Seasonal Demand: In industries that experience seasonal fluctuations in demand, staff augmentation can be an effective strategy. Organizations can scale up their workforce during busy periods and scale down during slower times, optimizing resource utilization.

Pilot Projects: Staff augmentation can provide the necessary expertise when organizations are testing new initiatives. External professionals can contribute their specialized knowledge and support pilot projects. This provides the opportunity to explore innovative ideas without disrupting the existing team. 

Exploring Managed Services

Managed services involve outsourcing specific IT or business functions to a third-party service provider. According to Statista, the managed services market will be a 300 billion dollars global industry in 2027.

Now let’s explore the critical aspects of managed services.

Definition of Managed Services

Normally, managed services offer organizations the opportunity to delegate specific functions to external service providers. These providers bring specialized expertise, processes, and resources to handle the designated services. This involves engaging a service provider to handle specific functions, such as IT infrastructure management, network security, or application support.

As a result, managed services allow organizations to focus on their core competencies. The primary objective is to benefit from the expertise and specialized services provided by the external provider.

Advantages of Managed Services

Managed services offer the following benefits that make them an appealing option for organizations:

Comprehensive IT Support and Maintenance

Service providers typically have specialized knowledge and experience in managing specific technologies or functions. They bring their expertise to the table, providing a high level of proficiency and ensuring efficient service delivery. In a nutshell, you get comprehensive IT support and maintenance in the desired department.

Proactive Monitoring and Issue Resolution

Managed services often include proactive monitoring, issue detection, and 24/7 support. Service providers employ advanced tools and technologies to monitor systems and identify potential issues to ensure smooth operations.

Access to a Team of Experts

By leveraging external resources, organizations gain access to a broader range of skilled professionals. It becomes possible to recruit experts with specialized abilities and extensive experience that might be lacking within the internal workforce. As a result, projects and tasks can be executed efficiently.

Focus on Core Business

By outsourcing non-core functions to a managed services provider, organizations can focus on their internal resources. They can make efforts on strategic initiatives and core business activities. This allows for better resource allocation and increased efficiency.

Cost Savings and Predictable Expenses

Managed services can be cost-effective compared to maintaining an in-house team for certain functions. Organizations can avoid upfront investments in infrastructure, training, and hiring. Instead of paying for the perks, they only pay for the services provided by the service provider.

Drawbacks of Managed Services

Like staff augmentation, managed services also pose some challenges for a business. Below are the drawbacks that you need to consider before opting for managed services.

Higher Cost Compared to Staff Augmentation

While managed services are cost-effective compared to an in-house team, it’s expensive as compared to staff augmentation. You’ll have little control and may have to bear extra costs in terms of resource management.

Vendor Selection and SLAs
Choosing the right managed services provider can be hectic and often takes time. You need to thoroughly evaluate potential vendors, considering factors such as their expertise and track record. Then you have to focus on service level agreements (SLAs) and alignment with organizational goals.

Potential Lack of Customization

Managed service providers often don’t offer much customization in terms of services or talent disposal. You’ll only get what you’ve agreed to in the contract and nothing more. This can create issues when you’ll need someone to look the other way only to resolve a minor issue at work.

Dependency on the Service Provider

Another drawback of managed services is the dependency on your service provider. You’ll have experts at your disposal but the provider will have more control than you. Your organization will be dependent on the service provider in terms of workload, resource distribution, and accountability.

Integration with Existing Systems
Integrating managed services into existing systems and processes can be complex. It requires coordination and collaboration between the organization and the service provider to ensure a seamless integration that aligns with existing workflows.

Security and Data Privacy

Furthermore, when outsourcing critical functions, security, and data privacy become paramount. Organizations need to ensure that the managed services provider has robust security measures in place and adheres to industry best practices to protect sensitive data.

Best Use Cases for Managed Services

Managed services are particularly suitable for the following scenarios:

IT Infrastructure Management: Outsourcing the management of IT infrastructure allows organizations to leverage the expertise of service providers. You can outsource servers, networks, and storage-related tasks to people who specialize in maintaining and optimizing these systems.

Cloud Services: Managing cloud environments, such as infrastructure as a service (IaaS) or software as a service (SaaS), can be efficiently handled by a managed services provider. They can ensure scalability, security, and ongoing support for cloud-based solutions.

Network and Security Management: Organizations can benefit from outsourcing network monitoring, firewall management, and intrusion detection. You can outsource such security-related tasks to service providers who specialize in network and security management.

Application Management: Managing and supporting critical business applications can be efficiently handled by a dedicated managed services provider. The same goes for enterprise resource planning (ERP) systems and customer relationship management (CRM) platforms.

Help Desk and End-User Support: Outsourcing help desk services and end-user support allows organizations to provide timely assistance to employees or customers, ensuring smooth operations and user satisfaction.

Determining the Right Solution for Your Business

Now that you have a good grasp over staff augmentation vs managed services, it’s time to consider the right approach. Below are some factors that you must consider:

Assessing Your Business Needs and Goals

Assess the complexity and specialization required for the tasks or functions you need to outsource. Staff augmentation provides access to specific skills and expertise, while managed services offer a broader range of specialized services and comprehensive management.

Scale and Duration of Resource Needs

Evaluate whether you need temporary support to fill skill gaps or ongoing management of specific functions. Staff augmentation is more suitable for short-term needs, while managed services are ideal for long-term or recurring requirements.

Control and Management Preferences

Determine the level of control and management you want to retain over the outsourced functions. Staff augmentation allows for more direct control and coordination, while managed services transfer the responsibility of managing and delivering the tasks to the service provider.

Budget and Cost Considerations

Consider your budgetary constraints and cost projections. Staff augmentation may provide more cost flexibility, as you can hire resources on a project-by-project basis, whereas managed services typically involve ongoing service fees.

Long-Term and Short-Term Goals

Align your decision with your long-term business goals. If you require short-term support for specific projects, staff augmentation can provide the necessary resources. For long-term strategic initiatives or functions that are not core to your business, managed services can offer sustainable and scalable solutions.

Level of Integration with Existing Teams

Evaluate how seamlessly you can integrate external resources with your internal teams. Staff augmentation involves closer collaboration and integration, whereas managed services involve a more independent relationship with the service provider.

Risk Management and Compliance Requirements

Consider any risk management and compliance requirements specific to your industry or organization. Determine whether staff augmentation or managed services providers have the necessary security measures, certifications, and compliance frameworks in place to meet your needs.

Considerations for Choosing Staff Augmentation

When considering staff augmentation, organizations should carefully evaluate the following points:

Project-Based Requirements

You must consider how quickly your organization can ramp up the team size during peak periods. Similarly, how easily you’ll be able to scale down when the project workload decreases. Also, focus on the access to specialized skills and expertise that may be required for specific projects.

Your organization should have dedicated resources solely focused on their project. This can enhance productivity and efficiency as the augmented team members will be aligned with the project's objectives.

Short-Term Resource Needs

Staff augmentation offers cost advantages for short-term resource needs. So you should focus on quick resource onboarding while going for staff augmentation. It’ll allow your organization to access talent without the need for extensive training or onboarding time.

Also, consider the flexibility in terms of resource allocation while choosing staff augmentation. Your organizations should be able to bring in resources for specific timeframes or project phases. But always ensure that they have the right expertise when needed while avoiding the burden of long-term commitments.

Flexibility and Control over the Outsourced Team

With staff augmentation, organizations have the flexibility to choose specific team members. So should be able to select individuals based on skills, experience, cultural fit, and compatibility with the existing team.

Moreover, your organization should always have direct control and clear communication channels with the augmented team members. This will facilitate better collaboration and efficient coordination of tasks and deliverables.

Considerations for Choosing Managed Services

While choosing managed services, you should keep in mind the following considerations:

Long-Term IT Support Needs

When you get managed services for a long time, your organization may become heavily dependent on the provider's expertise and availability. And if the service provider faces challenges, it can impact your organization as well. Also, with managed services, you can lose direct control over the support processes and decision-making.

Proactive Monitoring and Maintenance

Managed services providers typically monitor specific aspects of IT infrastructure or applications based on predefined metrics and thresholds. There may be limitations on the depth and breadth of monitoring, and certain areas may not be covered comprehensively. This can result in undetected issues or gaps in proactive maintenance.

Despite proactive monitoring efforts, managed services are still primarily reactive in nature. The service provider may identify and address potential issues but they may not always have complete visibility or control. They often rely on predefined monitoring rules and generalized best practices. This is something that may not fully align with your organization's needs.

Access to a Team of Experts on an Ongoing Basis

Managed services providers serve multiple clients simultaneously, which means their resources may be shared among different organizations. This can result in limited availability and attention dedicated to any single organization. This simply means that your organization may not have exclusive access to a dedicated team of experts

Also, the expertise of the managed services team relies on the provider's investment in skill development. So the provider must prioritize ongoing learning and keep up with emerging technologies and industry trends. If they fail to do so, the team's knowledge may become outdated over time. This can limit their ability to provide cutting-edge solutions or keep pace with the organization's evolving IT needs.

Conclusion 

All in all, the choice between staff augmentation and managed services ultimately depends on your specific needs. It is crucial to assess your organization's resources, expertise, and long-term objectives when making this decision.

Staff augmentation offers the flexibility and control of selecting and managing your own team members. Furthermore, it offers a higher level of customization and integration into existing processes. On the other hand, managed services provide comprehensive support and expertise. This service allows you to offload certain responsibilities and focus on core business functions. 

Are you looking to scale up your business but struggling to find the right talent? Hiring a third party services provider might be the solution you need! This approach allows you to seamlessly integrate skilled professionals into your existing team, without having to go through lengthy and costly hiring processes. With staff augmentation businesses can enhance their productivity and accelerate growth without sacrificing quality or efficiency. In this blog post, we'll dive into what outsourcing is all about, its different types and benefits, how to find the right partner for your needs, and why ShopDev could be an excellent choice for outsourcing IT services. So buckle up as we guide you through everything you need to know all about outsourcing!

What is Staff Augmentation?

At its core, staff augmentation refers to the practice of outsourcing skilled professionals to supplement your existing team. Essentially, it provides businesses with access to a wider pool of talented individuals without having to go through the time-consuming and expensive process of hiring them directly.This approach is particularly popular in the IT industry, where businesses frequently require niche skill sets that may not be available in-house. By leveraging outsourced services, organizations can quickly and efficiently fill these gaps while maintaining control over their projects.Unlike traditional outsourcing models that rely on third-party vendors handling entire projects from start to finish, outsourcing allows companies greater flexibility when it comes to leveraging outside talent. Under this model, businesses can easily scale up or down as needed based on changing demands or project requirements.Outsourcing has become increasingly popular due to its many benefits for both business owners and employees alike. It enables companies to streamline their operations while providing talented professionals with valuable work opportunities they might not otherwise have access to.

The benefits of business staff augmentation

Staff augmentation is a popular outsourcing strategy that allows businesses to hire temporary professionals for specific projects without the overhead of recruiting, training or providing benefits. One of the most significant advantages of outsourcing is its flexibility in terms of scaling up or down your workforce according to your business needs.Another benefit is that it provides access to a larger pool of talented individuals who have specialized skills and expertise in different domains. This means you can hire top-notch IT specialists and developers without having to pay their high salaries as full-time employees.Outsourcing also helps mitigate risk by allowing companies to share the burden with their partners. The partner company shares responsibility for delivering quality work, meeting deadlines and achieving project goals.Moreover, resource augmentation enables faster time-to-market since qualified professionals are readily available on demand, which eliminates recruitment timescales that could slow down product delivery.By choosing a reliable partner like ShopDev for staff augmentation services, businesses can focus more on core competencies while we handle all administrative tasks related to hiring personnel such as payroll processing and compliance issues.

The different types of IT Staff Augmentation

When it comes to business resource augmentation, there are various techniques a company may use to discover the proper personnel for their needs. Project-based augmentation is a frequent form that involves bringing in individuals with specialized skill sets and knowledge for a given project or initiative.Team-based augmentation is another sort of resource augmentation in which firms bring in full teams of professionals to collaborate on projects and objectives. This method is very useful when a company needs to expand quickly and does not have the time to hire individual employees one by one.A third option is dedicated staffing, which involves hiring remote workers who are dedicated solely to working for your business on an ongoing basis. This approach can be ideal for long-term projects or when you need someone with specialized skills who may not be available locally.Regardless of the type of staff augmentation you choose, it's important to partner with a reliable provider who has experience matching businesses with top-tier talent. By doing so, you can ensure that your staffing needs are met effectively and efficiently – helping your business grow more quickly than ever before.

How to find the right resource augmentation partner

When it comes to finding the right resource augmentation partner for your business, there are several factors that you need to consider. First and foremost, you should look for a partner with experience in your industry or niche. This will ensure they understand the unique challenges and requirements of your business.Another important factor is their track record of success. Look for a provider with a proven track record of delivering quality results on time and within budget. You can ask for references or read reviews from previous clients to get an idea of their performance.Communication is also crucial when working with an outsourced team. Make sure the provider has clear communication channels in place and provides regular updates on progress.Cost is always a consideration when outsourcing any part of your business operations. While it's tempting to go with the cheapest option available, keep in mind that quality work often comes at a higher price point. Always balance cost with value when choosing a staff augmentation partner.By taking these factors into account, you'll be better equipped to find the right business resource augmentation partner who can help accelerate your business growth.

Why choose ShopDev for as your outsource team partner

Ultimately, when it comes to choosing an outsource team partner for your business resource augmentation needs, you want a company that is reliable, efficient and committed to your success.At ShopDev, we offer all of these qualities and more. We have years of experience in providing IT business resource augmentation services to businesses across the globe. Our team consists of highly skilled professionals who are dedicated to delivering top-notch solutions within budget and on time.Our skilled professionals have expertise in the following areas:

• Full scale product development
• Full-Stack Software development
• Mobile app. development
• UI/UX design
• Prototyping & MVP development
• Data engineering, Data warehousing, Data visualization and ETL pipelining
• DevOps and Cloud Migrations
• AI and ML solutions

We take pride in building long-lasting relationships with our clients by understanding their unique requirements and tailoring our services accordingly. With 24/7 support and transparent communication channels, you can be assured that your project is always in good hands.So if you're ready to accelerate your business growth through staff augmentation, consider partnering with ShopDev - Your trusted outsourcing team! Call us today and get a quote!

Most businesses start with a small staff to be self-sustainable and use the available resources to achieve the most out of them. However, as the company expands, it becomes increasingly important to have technical expertise on board to ensure ongoing growth. The majority of businesses are left with a choice between using technology consulting services or recruiting full-time staff.

If you've been pondering whether or not to hire technology consultant services at this point in your company's development, you've come to the perfect place!

We will first go through the importance of hiring IT consulting services and then share some crucial benefits to help you make an informed decision,

What Is a Technology Consultant?

Before diving into the benefits of hiring technology consulting services, let's learn about what a technology consultant does. If you already understand the concept, you may skip to the next section.

IT consultants work in conjunction with your business rather than as full-time employees to meet your business goals. For example, it may be reviewing your company's cyber security's current health or collaborating on a given project. Training for a career as an IT consultant can take several years. Because of their certificates and knowledge, they can assist your company with fresh ideas and solutions.

Why Does the Need for Outsourcing Consulting Technology Services Arise?

Businesses and firms in the IT sector can now access a variety of new service providers due to a massive rise in the number of IT professionals. The fast expansion of technical advancements has prompted unconcerned corporations and organizations to turn their attention to technological integration. All of this necessitates the appointment of external help, which we've all witnessed in the IT industry.

As a result, many of the pressures that were previously focused on employees have been shifted to other parts of the business. Workers are free to work on other vital areas to help the company flourish. But why do we have to use these software businesses to work on our projects? You need technology consulting services for your business for various reasons, and we will discuss the main ones in the next section.

7 Benefits of Hiring Technology Consulting Services

While there are numerous benefits of hiring technology consulting services, we have listed the seven most important ones in this section.

Coherent Management

There are numerous ways in which technology can be put to use. The whole ability of technology and how it can assist a business or a firm cannot be understood by the average person, and that is a fact. There is no limit to what can be accomplished by using technology. Technology consulting services are acquainted with the latest technologies and excellent at planning due to their experience and expertise. The consultants thoroughly examine your business plan and objectives, which results in an actionable and tailored strategy for increasing efficiency and profitability.

Improved Productivity

The addition of professional consultants has a significant impact on productivity. Current employees gain motivation and ideas from their external counterparts, making employing both internal and external staff is a win-win situation. Due to their newfound productivity, they choose a new business trajectory and strategy. Employees can learn more about innovative thinking by collaborating with the outsourced technical team. Sometimes it's discouraging to put your faith in a single group to get a job done or find a solution. It's possible that the job may overwhelm some of the staff, causing them to feel undue stress. In order to achieve success in a wide range of areas, it is necessary to integrate an external workforce. With this workforce, you may expect a significant productivity increase.

Let the Experts Do Their Work

Technology consultants deal with a wide range of customers and have a range of expertise when it comes to tackling complex issues. As a result, they can better serve your company because they have a different perspective. Because technology consultants are experts in their sector, you can trust them to help you find the optimum solutions for your company. These experts have a wealth of knowledge to share and can help you make the most of technology's potential in your company's business strategy as well.

Scalability

Scalability is another advantage of collaborating with a technology consultant. This component is quite critical, paving the way for the growth and expansion of your business. Having an in-house IT department means you'll have to purchase additional equipment to support or manage your expanding business. New businesses, for example, must discard their initial server and replace it with a larger one that can allow future growth.

Additionally, when your company grows, you'll need to hire more IT professionals as well. Thanks to technology consulting services, you won't have to worry about growing your IT infrastructure and staff as your organization expands. The consultants can make the appropriate arrangements on your behalf to support your growing business.

Innovation

Technology consultants often provide solutions that are different from your team's approach, as their ideas are not limited, resulting in surprisingly good results. There is no substitute for experience and a thorough understanding of the field. Businesses often assume that their product or service is the only viable alternative. But, the external people don't think that way and may come up with surprising concepts to revolutionize your strategies.

Cost Savings

A full-time employee's salary, benefits, incentives, and other compensations must be factored into the total cost of hiring and sustaining the individual. Regardless of whether or not there are any new problems, the employee must be compensated. Those who work in the IT consulting sector are primarily employed to address specific issues. It is common for them to just stay on a project for a short period of time before packing up and heading home. Using this method is a cost-effective strategy for addressing specific IT issues. You don't have to keep the technology consultants on-hand all the time if you only need them for a certain project that demands their expertise.

Increased Security

Protecting your company from cyber attacks can be accomplished in various ways. One option is to work with internet security IT consulting firm. This will aid in the prevention of issues before they cause harm or lead to lengthy periods of outage for servers or networks. Your staff can be taught how to spot and avoid cyber threats by being given training on the equipment they use daily. A technology consultant is always available to answer any queries your employees may have about the equipment they use or internet security. Cybersecurity threats can come in several different forms. Viruses, malware, and phishing scams are all examples of this. You can tackle them via constant monitoring, training staff, and executing fixes and upgrades.

Final Thoughts

Hiring a technology consultant may be unnecessary, especially for new and small businesses. But you must realize that a business's success depends on how much you invest in it. You may invest in terms of time, energy, and money or simply take external help. Sure, you will have to lose a few bucks, but as a business owner, one should focus on the end results and long-term benefits. Technology consultants can help you avoid new and recurring issues that your existing team can't handle. And never underestimate the wreckage that technological ignorance can cause to your project. So it's better to be safe than sorry. Provided all the points listed in the blog, it is pretty evident that hiring a technology consultant service will only result in your business or company's benefits.

In a post-pandemic world, outsourcing is becoming a new norm as more and more companies are gearing up for IT outsourcing. Finding and hiring an in-house IT staff is a time-consuming and costly practice and is not a sane decision if you have a limited-time project.The two main outsourcing models are staff augmentation and managed services. Many outsourced services such as testing, coding, design, and development can be utilized for the project, or a project can be outsourced. On the Darkside, outsourcing may also possess risks and vulnerabilities due to the client’s low degree of control.

Most of the time, businesses struggle to choose between staff augmentation and managed services. IT departments that need to introduce innovation or updates will need to outsource them to attain their goal as per plan. This blog post will discuss what project outsourcing is and what it can offer in terms of its subordinates, like staff augmentation and managed services.

What is Project Outsourcing?

Challenging projects require support not only in back-end development but also in Front-end, User interface, project management, software quality assurance, pushing the need for the expansion of IT outsourcing and staff augmentation might not be sufficient enough. It usually happens when launching new products or startups and integrating some advanced features in existing systems or rebuilding systems. The outsourcing vendor then provides extensive services to meet the project’s specific requirements and manage it with great efficiency, mostly via the Agile approach to deliver the product on time and maintain high standards. This collaboration possesses a variety of possibilities and less attention from the client.

Advantages of Working with Project Outsourcing

The nature of this outsourcing model presents the following advantages:

• Cost reduction
• Faster project completion
• High level of expertise
• Flexibility

Let’s dive into details.

Cost reduction

Companies can enjoy the perks of competitive prices for contracted services, especially if the project or service can be outsourced from an offshore vendor. Furthermore, overhead costs are reduced to nil since the company no longer needs to handle the contracted services internally.

Faster project completion

Cost reduction also provides an opportunity for faster project completion as competitive pricing means more resources for the same investment amount. For instance, you can hire three Indian software developers for the price of one US or UK-based software developer. Furthermore, outsourcing can provide access to tools and methodologies that can accelerate the project life cycle process.

High level of expertise

State-of-the-art expertise can be imported to shape the project. A company no longer has to stay updated with the shift and arrival of technological advances. Instead, it can focus on improving and reshaping its core competencies and hire vendors with the necessary knowledge to work on relevant aspects of the project.

Flexibility

Organizations are no longer dependent upon their resources but can enjoy the perks of extensive projects by combining their resources with the skills of an outsourcing partner. Small or mid-sized organizations can instantly expand their limits by collaborating with foreign talent.

Project Outsourcing Vulnerabilities and Risks

Project outsourcing comes amidst some vulnerabilities and risks.

• Coordination breakdowns
• Loss of Control
• Fear of Conflict
• Security Concerns

Let’s discuss each in detail.

Coordination breakdowns

Coordination of experts from an outsourced company can be a headache, especially if the project demands rich communication and mutual compromise over certain aspects. Breakdowns are exacerbated due to a physical barrier in space and mental synchronization with people working in different offices or even different cities. Another barrier is the difference in time zones that remains instrumental in breaking coordinates in cross-continental outsourcing.

Also Read: IT Outsourcing for Healthcare Industry

Loss of control

There is a potential loss of control over the project as the core team depends on other organizations with a lack of direct authority over the employees and management of outsourcing service providers. While the long-term survival of involved entities is directly linked with the performance, a project always remains on the verge of failure if one side fails to deliver as per commitments and true expectations.

Fear of Conflict

Projects are more vulnerable to damage caused by interpersonal conflict since the different participants do not share the same ethical values, perspectives, and culture. The trust factor, which is crucial for the success of a project, can be difficult to maintain due to limited interactions and people from different organizations and cultural backgrounds.

Security Concerns

In today’s data-driven world, almost all projects involve a high degree of information sharing between the involved companies, which comes amidst the compromise over trade and business information confidentiality. It turns out to be disastrous if the contractor also works for your market rival. Confidentiality is the biggest ever concern, and companies have to be very careful while outsourcing systems involving payroll, medical transcriptions, and insurance data.

Managed Services

This Outsourcing model is based on similar principles as Project Outsourcing but with a notable difference - it demands a continuous delivery of services from the vendor. In this case, a client usually entrusts the outsourcing service provider with a whole process or system. Usually, it comprises a secondary aspect of its operation. The partner has control over it and its outcome so that the company choosing Managed Services can focus on the more crucial and core areas of the business. The service is well-determined and locked under the Service Level Agreement’s pact, an agreement between the service provider and the client. Managed IT services are more lengthy and long-term involvement as it is a continuous and mutual reinforcement for both client and service provider. The Brightside and downside are pretty much the same as in Project Outsourcing, including the advantages of long-lasting cooperation like stability and cost cuts. Managed services are the corporate model that is not always offered by software houses, so you need to consider the more limited domain of finding the right vendor.

Managed Services Perks and Benefits

The nature of this outsourcing model presents the following advantages:

• Saving time
• Access to the best talent
• Focus on your core competencies
• No recruitment headache
• Lower operational & development costs

All of the said perks are not always present in every situation. Everything depends on your requirements, priorities, specifications, circumstances, and especially the outsourcing vendor you choose. So let’s analyze each of them in detail.

Saving Time

The most obvious reason to choose this model is the time factor. Since you don’t have to deal with the management of the developer’s team by yourself and the outsourcing partner deals with everything, you save a big chunk of time. After all, the only thing you need to do is provide crystal clear requirements and specifications and ensure rich communication with the company.

Access to the Best Talent

Software outsourcing companies are the biggest rivals in the HR market. They often mark the victory and win the best developers. It means they restrict the direct access to the best talent, and you cannot directly hire them. Therefore, in many cases, the only way to open access to the best talent worldwide is to work with an outsourcing firm having the best and right developers you need.

Focus on Core Areas

Outsourced team members allow you to focus on core business areas such as growing your business. The outsourcing company deals with the development area so that you can primarily focus on the stuff which best suits and demands your capabilities.

No Recruitment Challange

Like project outsourcing, Managed services free you from running any recruitment drive as the outsourcing firm already has full-time developers onboard. Your outsourcing service provider can further search for and recruit qualified developers based on your customized requirements.

Reduced Operational & Development Costs

Since you don’t need to hire an in-house work team, you cut operational costs as well. After all, you don’t have to provide office space, advanced equipment, payroll, insurance, allowances, and other employee benefits.

Managed IT Solutions Disadvantages & Risks

With some advantages above, there also come certain risks and disadvantages you must be aware of:

• Possible higher costs compared to staff augmentation
• Less control on your side
• Reliability

Let’s discuss each of these in detail.

Higher Costs Compared to Staff Augmentation

Unlike staff augmentation (as we will discuss in the following content), managed services leave the space for the involvement of other stakeholders besides developers themselves. This adds up to the net cost of outsourcing. In some cases, this extra cost makes managing services more expensive than using staff augmentation, as you will see later.

Loss of Control

Control and responsibility on the developer’s side are both a curse and blessing simultaneously. Sometimes little control and utmost liberty are devastating. How much control you need ultimately depends on your specific circumstances, requirements and priorities. If you choose the wrong vendor, then full control on their side does not serve as a sweet dish; instead, it may ruin your project.

Reliability

Whether you find a reliable outsourcing partner or not is likely to determine the destiny of your project. Reliability is one of the major concerns while choosing managed services. The only way to curb risk here is to carefully and consciously run the partner selection drive.

What is Staff Augmentation?

Instead of absolute outsourcing (that was the case earlier), this solution is based on hiring several developers for a specific time scale or developing a particular project segment. It works like an extension of the existing human resource. The outsourced team members work with the in-house team, contributing their skills and knowledge and offering different perspectives and solutions. Upon opting for staff augmentation, the company focuses on contemporary requirements and hires software developers with the necessary skillset required in the ongoing project.

Also Read: How to Save 70% Revenue Using Staff Augmentation

Advantages of Working with IT Staff Augmentation Companies

Staff augmentation presents some unique advantages:

• Less recruitment headache
• Lower operational costs
• Lower development costs
• Less legal headache
• Access to the rare and needed specialists
• Control on your side

Let’s take a look at each in detail.

No Recruitment Headache

You can free your shoulders from the burden of searching and hiring the right talent. The staffing company does that for you. You provide detailed requirements, and they handle the rest.

Reduced Operational Costs

You don’t have to provide office space, transport facility, and employee benefits to your remote employees. The staffing company handles it for you as well.

Lower Development Costs

Your remote developers are most likely offshore, which in turn reduces the rates and total development costs.

Less Legal Headache

The staffing company deals with most of the legal liabilities for the developers as their official employers. Therefore, it only leaves room for very brief paperwork and legal formalities on your side.

Access to the Unique Talent

Staff augmentation expands your boundaries by providing you with direct access to state-of-the-art IT experts around the globe. You don’t always have direct access to them or communicate with them directly, but this model opens you a channel for direct access.

Control on Your Side

Finally, this model provides direct control on your side. Since you are the one who deals with the team directly and manages it, you are the one who has rich control and authority over it.

IT Staff Augmentation Disadvantages & Risks

Staff augmentation is not everyone’s cup of tea. There are certain downsides and risks which you must be aware of:

• Management resources are necessary
• Reliability
• Staff deficit

Let’s break them down in detail.

Management Resources and Capability Needed

With notable benefits, staff augmentation also comes amidst some downsides in managing the remote development team on your own. This usually requires your company to have the right stakeholders who can handle this task effectively.

Reliability

Just like Managed Services, partner reliability is one of the primary concerns in Staff Augmentation. Getting the wrong staffing partner may ruin your project. For the said reason, it’s crucial to take every step with great caution by ensuring that your potential staff augmentation vendor is a reliable one with rich experience and a track record of dealing with similar projects like yours.

Staff Unavailability

Sometimes it’s not as easy as it sounds to find the right developers at the tip of a finger, or at least not as fast as you’d think. However, that doesn’t happen frequently. Such problems pop up sometimes in staff augmentation, depending upon your requirements and the place where you’re looking for developers.Why not own the R&D Team?Suppose you are gearing up to integrate 40 experts into your team. In that case, you can set up your Research and Development (R & R&D) team with a sustainable business environment and extended domain of tech talent pool. But handling your R&D team comes amidst the responsibilities related to the legal liabilities, learning and adapting cultural dogmas, and running all of the risks independently.

How to Outsource the Best Managed IT Services or IT Staff Augmentation Vendor

There are a few things you have to take into consideration while outsourcing.

Previous experience

This is the most crucial aspect to note when choosing a potential outsourcing partner. The outsourcing firm you are considering collaborating with must-have rich, relevant experience with projects like yours.

Pricing model

You need to ensure that the pricing model is transparent, fair, and free from hidden charges. It has to provide you with the best price possible.

Legal information

It’s recommended to check the company’s legal information. How long they have been serving, the key stakeholders, and if there have ever been any lawsuits, etc., tells a lot about a company’s reputation.

Portfolio/Past Experiences

Ask the outsourcing service provider to provide a detailed portfolio of their developers. Carefully review their expertise, academic qualifications, certifications, and experience.

Communication Medium

To eliminate the communication barrier and related problems, you must ensure that the management and development teams know your language or central medium like English. You can ask them to provide any relevant certifications which confirm their level of English fluency.

Testimonials and Reviews

Last but not the least, carefully go through the testimonials & reviews and ensure they are real. It is even better to talk to their past and contemporary clients and ask about their experience while outsourcing with the same company.Of course, there might be many other factors to consider depending upon your needs and specifications. But in general, ensuring these criteria is the most important for any company gearing up to outsource a team, project, or services.

Conclusion

All models have their advantages and disadvantages and, notably, show different efficiencies in different situations. Staff Augmentation is ideal for project scaling when a certain skill set is required, and your in-house employees cannot find all the solutions. In such a case, external developers will simply fill in the voids. This temporary and to-the-point engagement makes it cost-effective and flexible. On the other hand, Project Outsourcing would be a great alternate if you are looking for a reliable partner offering various services to complete a whole project independently.

The provider collaborates with you by sharing their expertise & knowledge and becomes responsible for the project’s outcome while focusing on core business areas. Last but not the least, when it comes to long-term engagement, you should opt for the Managed Services model. Every model offers different perks based on its nature and layout, but the final choice should be based on your ultimate business goal and the nature of the project. Each company has its definition of assistance and collaboration.

Therefore, it is vital to consider the benefits of all available options and then select the model that fulfills your requirements. Once you decide, you should also ponder other aspects of outsourcing, such as the differences between offshoring, onshoring, and nearshoring or preparing yourself to find a dedicated outsource vendor. By researching in advance between Staff Augmentation Vs Managed Services Vs Project Outsourcing, you can find the outsourcing solution that best suits your specifications and requirements and provide your company with some state-of-the-art and talented experts from the world.

The healthcare sector has experienced several transformations in the past decade. After the revolutionary upsurge in digital technologies and innovations, all aspects of the healthcare industry have reshaped and improved. Patients’ data can now be stored to build case and knowledge bases to understand better and evaluate disease and plausible cure. This data can be shared with patients or other internal departments in the form of Electronic Health Records (EHRs). Patients based in remote and rural areas can be observed and treated via telemedicine. Online scheduling of appointments and medication refill requests can be made digitally through patient portals.[lwptoc skipHeadingLevel="h1,h4,h5,h6"]Over the past few years, outsourcing IT has appeared as one of the most successful business models. It eliminates the unnecessary headache and load of HR management, logistics, accounting, and other tasks by offering an efficient and cost-effective escape route of outsourcing in the form of staff augmentation, managed services, or project outsourcing. As far as the healthcare industry is concerned, it undoubtedly faces plenty of challenges related to affordable and effective patient care. There is a vital need to offer quality care in today’s global healthcare industry and cut costs. These are some of the primary drivers of modern-day’s IT outsourcing.

Also Read: A Complete Guide to Calculate Outsourcing Cost in 2021

Most certainly, no other sector or industry can better benefits from the perks of Digitalization than healthcare. As the healthcare industry produces a large amount of data, the healthcare providers are in constant need to access and digitally track the patient’s record.To avoid any misconceptions, it’s crucial to determine if and how your healthcare facility requires the services of an IT Outsourcing vendor.

Why Hospitals are Outsourcing IT Segments or Functions

1. Improved RoI

The top reason for opting outsourcing model is to reduce costs so as hospitals do. Statistically, around 90 percent of outsourcing hospitals have experienced a sound return on investment within a year.

2. Immediate access to trained staff and needed technology

The continuously accelerating technological advancement is a blessing and a curse for healthcare facilities, especially hospitals or clinics set up in rural settings that experience difficulty finding and dealing with qualified IT staff. Such limitations may require hiring third parties to provide one or more of a wide range of complex technology services, including managed services for digital and network infrastructure, project management, strategic CIO leadership, and full IT staff augmentation. Most capacity generation practices can be implemented either onsite or offsite, and sometimes a hybrid of the two.

3. Increased cybersecurity risks

Patient data is one of the most confidential records globally; that’s why it is not easily available for machine learning or other data science purposes. A fear of cyberattack is another primary driver for outsourcing network applications and staff as not-technical internal staff cannot deal with the rapidly evolving cyber world. Moreover, procurement of modern security solutions is very expensive, and enjoying the perks of a security firm’s leveraging of assets and protocols can be a smart decision.

4. Lack of critical IT leadership

As technology has summited to new heights, it has also become crucial patient care and hospital management segment. This IT-driven transformation has turned the role of IT leadership from just an IT technician to a significant strategic and policy-making role in healthcare facilities’ overall operations and management. Many hospitals face hurdles while finding this level of IT leadership. With every passing day, the demand for such experts exceeds the current supply, especially in smaller communities and rural hospitals. The best IT outsourcer vendors offer executive-level IT management with the appropriate leadership and strategic knowledge to collaborate intelligently with the hospital’s upper hierarchy.

5. Allows hospital IT staff to focus on more important projects

Another notable advantage of IT outsourcing is that it allows hospital IT staff to spend less time and effort on infrastructure and spare it to focus on core projects and objectives. With effective outsourcing services, the hospital’s executive leadership can focus more on primary functionalities and operations related to healthcare delivery and management.

6. Organizational crisis

While several different scenarios can show up as an operational crisis involving IT, a worst-case scenario needs an immediate solution in third-party IT vendors to keep the hospital open and operate properly for its patients. Some of the daunting issues that are likely to appear are like:

• The IT staff shortfall and internal issues are preventing hospitals from a turnaround while costs keep increasing. There is so much that needs to be handled by IT support.
• As a rural or community hospital, to attract and retain the state of the art leadership, network infrastructure, and security, it is desired to create a sustainable IT framework for that, so turnover is the main problem due to the presence of so many IT voids that need to be fulfilled.
• Heavy IT expenditure for short-term projects is the main concern in adapting modern technology with evolving internal challenges. How can one save expenditure and have instant access to specialized resources whenever required?
• Support for a 24/7 quality service desk is costly to acquire. It isn’t easy to sync call volume with a present staff of full-time employees.

How to Determine if you Need Healthcare IT Outsourcing

A well-managed outsourcing model can curb difficult internal issues in a minimum budget, but poorly-managed outsourcing can exacerbate those problems or create new ones. Healthcare facilities have proven to hire unqualified or irresponsible vendors, resulting in unsolved problems, financial damage, and even produced operational crises. Hiring an immature IT outsource vendor without any prior experience of working with a hospital can be disastrous.

Also Read: How to Save 70% Revenue Using Staff Augmentation

The problems come amidst the lack of knowledge these outsource service providers may have related to hospital workflow infrastructure and the uniquely urgent nature of healthcare dynamics, which are primary factors in hospital IT operations. Failure can teach us more than success can do. Similarly, hospitals’ poor experiences with outsourcing can offer a crucial lesson for that healthcare facility gearing up for outsourcing.Before opting outsourcing model, a healthcare facility is strictly advised to acknowledge the grassroots sources of its problems, needs, and needs outsourced demand solutions. The hospital must also acknowledge what it requires to pay for and develop a realistic roadmap to fulfill those specific requirements. Depending upon the degree of seriousness, every problem requires a solution is needed to evaluate, which is a time-consuming process but worth it. The general planning process should work as follows, as time allows:

• Requirement Analysis

Before outsourcing any IT service or product, the hospital should perform requirement analysis lead by relevant participants and stakeholders. The CIO or IT Director is often the least objective leader for this process. His role can ensure a collaborative effort by significant stakeholders from relevant departments and the IT department. If necessary, an external hospital IT consultant can be called for interim guidance and gain a clear perspective of seemingly unimportant things.

• Assessment of Objective Needs

The analysis approach, including conclusions, must be driven by an objective needs assessment. Such assessment is intended to outline the gaps between the IT department’s contemporary outcomes and the outcomes the healthcare facility is expecting. Compared to the plausible loss in not meeting them, the desired outcomes should be prioritized concerning organizational strategic priorities and the investment required to meet the objectives.

• Rational and Independent Assessment

The requirement assessment drive should be purely objective, meaning that it doesn’t include individuals’ desires or favorites. Requirements must be defined only by performance data concerning the relationship of potential variables with organizational goals.

• No Space for Prejudices and Toxic Influences

The assessment and analysis must be free from all kinds of prejudices for a particular solution, whether it be an internal or outsourcing vendor, irrespective of the past or present relationships with one. The project will likely fall if either who or how casts its shadow on the analytical criteria. Outcomes and recommendations will lose integrity and fail to add any value. It can make the decision-making process risky and costly. For instance, assessments can be compromised by organizational politics, individual influence, or dictatorship of the powerful or favorite. There are many examples where services or equipment are outsourced unnecessarily because an incoming CEO wanted to keep his strings tied with outsourcing vendors from his previous hospital. Some hospitals have outsourced services because without analyzing their real problems and doing what they were dictated.

• Final Decision is Equally Important

Considering the heavy expenditure of IT outsourcing contracts in the long run, final decisions to acquire an outsource service provider should be weighed rationally. The overall reason and impact of incorporating IT outsourcing firms into the facility must be evaluated differently. Then turn your focus to the primary concern of acknowledging the particular problems that need outsourcing support. The functionalities that require support may range from a vulnerable server or an unsatisfactory service desk to saving costs by switching to the cloud server. The best outsourcer service providers can offer many solutions ranging from outsourcing all IT services to the partial outsourcing of discrete services.

Conclusion

The central idea here is that to make a rational decision and making outsource process hurdle free and successful, and stakeholders should collaborate to perform a SWOT Analysis to understand and weigh clearly:

• The unique problems/requirements of their particular healthcare facility and their costs
• The assets and liabilities that existing IT functionality offers
• The closely linked strategic objectives of the hospital
• The potential risks and threats

If the final decision is to collaborate with an IT outsourcing firm, various outsourcing vendors exist in the market. They all offer various services, some very specialized, such as cybersecurity firms and server hosting companies. Other firms offer a lengthy array of patronage, including almost every IT service. Most of the companies are usually authorized and experienced. Still, they must ensure that the vendor you will engage has prior experience providing IT-based solutions to any renowned healthcare facility and how it generates the desired outcomes.

To calculate outsourcing cost, and the cost comparison is the most critical thing for any company when considering outsourcing services. When we talk about outsourcing services and their expense, various variables will radically affect the efficiency and the requirements of a service provider.The outsourcing costs for every outsourcing contract should be identified effectively. Indeed, it is the first factor to keep in mind as businesses intend to outsource IT facilities and construction work.[lwptoc title="A Complete Guide to Calculate Outsourcing Cost" skipHeadingLevel="h1,h4,h5,h6"]It would be best if you asked yourself the following questions before outsourcing:

• Is it time-saving?
• Will it be monetarily beneficial?
• Will the outsourcing firm fulfill my goals?

Outsourcing Costs

There are certain expenses involved with outsourcing business processes, as shown in the list below. In addition, there are various sectors and specific values according to the particular requirements.

1. Certification Costs.
2. Consultancy Costs.
3. Employees' Compensation.
4. Hiring Costs.
5. Legal Obligation Costs.
6. Server maintenance Expenses.
7. Transitioning Costs.

Calculating the Outsourcing Costs

There are various methods to calculate Business Process Outsourcing cost-benefit analysis as listed below:

Differential Cost Analysis

Differential costs are a comparison of the prices of two or more different options. The cost arises as a company encounters many similar approaches and chooses only one option by disregarding the other options. Therefore, executives should weigh the available options’ costs and benefits when deciding between two or more options.

Image Source: CorporateFinanceInstitute

Companies make critical choices on long-term and short-term ventures by incorporating differential cost analysis. Differential costs often include quantitative analysis for executives that form the framework for business plan growth.You can carry the differential cost analysis by subtracting the outsourcing costs from the in-house costs.

Outsourcing Amount Savings = In-house Cost - Outsourcing Cost.

You can also use the following formula to calculate the outsourcing costs:

ROI% = (Return – Investment Cost)/Investment Cost x 100

Incremental Costs

Incremental costs are referred to as the additional costs related to the development of a different unit. They only consider those costs that appear to shift with a particular decision, whereas the remainder is unrelated.They are described as an added expense for the business because of the resulting increases in costs related to manufacturing, machinery or equipment replacement, the inclusion of a new product, etc.

Image Source: WallStreetMojo

Use the following formula to calculate the incremental costs:

Incremental Cost = Total cost of producing two units - Cost of making a single unit

Opportunity Costs

The cost of what you sacrifice by deciding between two or more choices is referred to as the opportunity cost. Opportunity costs often result in current and potential damages or profits based on investment decisions. For example, the third parties decide between buying or selling a product, you might get an immediate gain by selling the product, but it will stop you from obtaining future investment gains.

Image Source: FRB

These costs are the forgiven gain resulting from a non-chosen alternative. The risks and advantages of any available option must be taken into account and measured against those to better assess the expense of opportunities. By taking into consideration the importance of opportunity costs, people and companies may make choices more profitable.

The concept of opportunity costs is an important economic concept. These costs reflect the possible advantages that an investor or a business can miss by selecting one option and disregarding the other.You can calculate the Opportunity Costs by using the following formula: ?

Opportunity Cost= Return on the Best Forgone Option - Return on the Selected Option

Image Source: EDUCBA

Outsourcing works for Every Business

Many businesses are still scared of the term "outsourcing." As a result, they abstain from involving third parties in their projects and day-to-day operations; they don't trust the third parties enough to share their business information with them. People think that only huge businesses can take outsourcing services, which is untrue as small budding businesses that can not afford an in-house team can benefit much from the outsourcing world. According to IBM research

Almost 27% of organizations outsource to reduce co. Only 36% are basically innovators. Around 37% are actual growth-seekers who use outsourcing as one of the best tools to optimize business operations.

Final Words

Cost assessment is essential in today’s competitive market world to achieve a financial advantage over your rivals. You can carry out an outsourcing costs analysis by calculating incremental costs, and opportunity costs, or by carrying out a differential cost analysis. Let us know in the comments section if you consider any other additional cost or factor while you calculate outsourcing cost.

Software Outsourcing as the term suggests refers to the notion of hiring another development company or source to help you with the completion of your software development project(s). At times, software outsourcing also involves the practice of handing the entire project to the third-party that is well-qualified to meet the demands of it.Although software outsourcing is not so novel an idea, its hype is getting bigger and better with each passing day.

There are various factors to which software outsourcing owes its popularity - primarily the fact that rapidly changing trends of the digital markets call for innovative minds and skilled professionals to help the marketers and IT companies cope with the waves of advanced technologization.The change in digital trends is giving a boost to the competition among the business ventures and that is what makes software outsourcing a go-to option for them. It is a major driving force behind the digital transformations of several renowned companies.

Here is all that you need to know about software outsourcing-the reasons for it being the trend and how it works, advantages, its drawbacks, and how to outsource the software development effectively:

Why is Software Outsourcing a Big Thing?

Software outsourcing offers multiple benefits to the organizations opting for it. This helps in improving the overall working efficiency and enables them to keep their long-term strategies on track. Moreover, its various types and models are what primarily makes it a convenient option for many companies.

Types of Software Outsourcing Services:

Services that software outsourcing vendors usually offer include artificial intelligence, web or mobile application development, robotic process automation, or the latest trends of cloud computing, which helps the customer companies to have an impactful digital presence. Vendors can also customize their software outsourcing services to cater to the specific needs of their customers.Companies offering software outsourcing services ensure that they have the in-house capacity, and resources (developers, designers, quality assurance engineers, business analysts, need, and project managers) to understand and deliver the project(s) with the required functionalities.

Models for Software Outsourcing:

There are three major ways with which businesses can outsource their projects to the vendors. Mainly being:

1. Nearshore Outsourcing:

This means outsourcing the projects to the companies in neighboring countries.

2. Onshore Outsourcing:

Onshore outsourcing means hiring vendors who are located within the country. Being able to speak the same language eradicates all the issues and possibilities of errors that come with the language barrier, thus making it more effective. However, the development cost will be more than the other outsourcing options though.

3. Offshore Outsourcing:

As the name refers, this means working with vendors from other countries. This helps in reducing the development cost, while online communication platforms like zoom or Google Meet are considered to make the working process and communication more seamless.

What are the advantages and drawbacks of Software Outsourcing?

There are so many factors that contribute to making software outsourcing an advantageous option that results in less product production time and increased working efficiency. To top it all, here are some more benefits of it to help you understand more comprehensively.

The Advantages:

1. Development Costs and Overhead Spending:

The most compelling reason for businesses to opt for software outsourcing is reduced development costs. It helps them grow with the market demands more effectively and that too while staying in budget. Having so many pricing options at hand is undoubtedly the primary advantage of software outsourcing. Outsourcing means that you won’t have to worry about the labor costs and other benefits like leaves, insurance, etc. and all likewise troubles that come when you hire an employee to do the work for you. You will just pay the third-party and get your done work effortlessly. This is what makes the whole endeavor of outsourcing cost-effective and attractive for the business organizations that are striving to keep up with the rapidly changing digital trends.

2. It is Flexible!

You are not bound by any long-term legal constraints or wont have to pay for the resources even after the completion of the project. In comparison to full-time hiring, software outsourcing gives you a lot of flexibility when it comes to payment and working plans. You can literally hire any person that aptly meets the project demands irrespective of the geographical location. You wont have to go through those lengthy recruitment processes and prolonged interview sessions. It saves you time and energy to focus on business management.

3. Boosting Working Efficiency:

Software outsourcing vendors are highly professional, skilled, and well-versed in the modified technological tools that are usually needed in the development process. It will save you a lot of time that you would otherwise spend on hiring new team members. Your project moves forward at a faster pace and the project completion period gets reduced to a greater extent.

3. Improved Business Strategies:

Having easy access to skilled and experienced IT talent from all around the world helps organizations in getting the work done effectively and efficiently. Software outsourcing enables them to be more focused on the tasks that need to be done on their part instead of worrying about the tasks that are being managed by the third-party vendor. This will aid in improving their work progress as well.

The Drawbacks:

1. Work Quality:

Lower labor costs sound very attractive to us all, but we cannot deny the fact that it comes at a price. The lower development costs might compromise product quality. Moreover, not being able to contact the developers in person will result in delayed feedback, which in turn prolongs the duration of project completion.

2. Cultural and Language Barriers:

The differences in time zones often hinder the effective communication or feedback between the client organization and the remote outsource team, that further challenges the work progress and leads to extended deadlines. You can overcome this drawback through effective project management.

3. Security Concerns:

Data is considered to be an asset in todays world. Hiring a third-party to help you with your projects means that you will be required to share some confidential data, or intellectual property with them, which in turn exposes your company to external threats. Therefore, make sure to put some effort and thought while selecting outsourcing vendors. Pick the ones who understand and prioritizes your security concerns to reduce the risks for any data leakage. One highly recommended way to reduce this risk is to sign Non-Disclosure Agreements (NDA)s with the 3rd-party vendors after consulting a law-agency.

How to Do Software Outsourcing Effectively?

No matter how beneficial a process is you can never reap its benefits if you are not doing it the right way. Likewise, when it comes to software outsourcing, various factors should be taken into consideration to ensure success. Keep the following pointers in mind:

Set Goals:

Make a draft of what your expectation is from the outsource team. How you want the work to be done i.e. list some rough deadlines. Have a clear idea about what kind of product you need at the end of the project. You must ask the outsourcing company to do proper documentation since that ll set benchmarks, milestones, delivery dates, and overall project requirements.

Communication is the Key to Success:

If you are not communicating effectively with the remote team, you are likely to run into problems. Since you are working remotely with the outsource team, you must be vigilant about keeping track of the project progress. Communicate systematically, for instance:

• When posting an ad for software outsourcing, be clear about your demands and job description
• Make it clear if it is a one-time project or you are looking for a long-term contract
• State the qualification and skills required
• State duration of the project
• List your expectations

Having all these conditions listed out will save your time and energy that otherwise would have been wasted on reviewing applications from professionals or companies that do not fit your project requirements. Besides, after hiring the outsource team, get your project management team to collaborate with the hired 3rd-party resources, and ensure that they schedule meetings more often to get the work done perfectly.

Post-Shortlisting Process:

Even if some unfit professionals/companies have managed to slide their CVs/Proposals in your email, you can surely cross them out after some browsing. Further, you can start by contacting the potential resource, those who fit the project demand. Contact them directly to communicate all the concerns and points we have discussed above. Its good to be extra cautious and call their references or previous employers to see if they are reliable and have all those skills that they have listed etc. This will help you to make an informed decision. Before finalizing your decision, take a demo of their skills. Moreover, observe how they are communicating with you, i.e. if they are pleased, take it as a good sign. If you sense something fishy or they are being ambiguous, then you should opt for other available options. Once you have shortlisted them based on these criteria, it will be easy for you to finally choose.

Be Realistic:

Having realistic expectations is vital to keep things smooth between you and the hired team or individual. For example, if you are looking for lower labor costs then be prepared for the compromised quality of the product. Likewise, have some room for delays in the project and unmet deadlines if you are opting for nearshore or offshore outsourcing particularly.

Be Strategic:

You must have a sound plan for the execution of the project. Set multiple milestones to keep track of the work progress.

Where to Find Potential Developers?

When it comes to the platforms where you can find potential developers, the options are practically endless. You can look upon widely known digital platforms like Clutch, people per hour, Fiverr, Upwork, etc. You can visit freelance platforms and trusted reviews sites that list the top and best-rated companies (offering staff augmentation services), individuals, and platforms.

The Bottom Line:

There isn't a particular way or magic formula to ensure your 100% success with software outsourcing but the above-discussed points will surely reduce the risks that come with hiring a third-party. Going through a huge amount of applications pouring in might be difficult but the process will surely be worth the effort. Just like any other business engagement process, software outsourcing has its strengths and weaknesses, but it is essential to be certain if software outsourcing is the right decision for your company or not. shopdev offers staff augmentation services, empowering tech companies around the globe with skilled and experienced talent. Get in touch with us today to discuss your project.

Staff augmentation has emerged as a popular strategy for organizations seeking to augment their workforce with specialized skills and expertise without the long-term commitment and overhead costs associated with permanent hiring. Finding the right outsourcing partner is crucial to ensuring the success of your projects and achieving your business goals. In this article, we will explore the top qualities to look for when selecting a staff augmentation partner and delve deeper into each aspect to help you make an informed decision.

1. Extensive Talent Pool:

One of the key qualities to consider in a staff augmentation partner is the size and quality of their talent pool. A reputable partner should have access to a diverse pool of highly skilled professionals who possess the specific expertise you require. This pool should consist of professionals with a proven track record in their respective fields. When evaluating potential partners, inquire about the breadth and depth of their talent pool to ensure that they can quickly identify and deploy top talent that aligns with your project requirements. By leveraging their extensive talent pool, the partner can save you time and effort in the recruitment process, allowing you to focus on your core business activities.

2. Expertise and Specialization:

Look for a staff augmentation partner that specializes in your industry or the specific skill sets you need. It is essential to ensure that the partner has a deep understanding of your business domain, including its unique challenges and requirements. This industry-specific knowledge enables the partner to provide resources who possess not only the required technical skills but also the contextual understanding necessary to drive your projects forward effectively. A partner with domain expertise will be better equipped to provide the right resources who can seamlessly integrate into your existing team and contribute to your projects from day one.

3. Flexibility and Scalability:

Your staff augmentation partner should offer flexibility and scalability to adapt to your changing needs. As your projects evolve, you may require additional resources or need to adjust the team size. It is crucial to choose a partner who can provide resources on-demand, whether you require a single professional or an entire team. A flexible partner can quickly respond to your resource needs, ensuring that you have the right people in place when you need them. Furthermore, the partner should have the capacity to scale the team based on project requirements, allowing for optimal resource allocation and cost-effectiveness.

4. Robust Screening and Selection Process:

A reliable staff augmentation partner should have a rigorous screening and selection process in place. This process ensures that the partner thoroughly assesses the skills, qualifications, and experience of potential candidates to ensure they match your requirements. A partner with a robust selection process will go beyond evaluating resumes and conduct technical assessments, interviews, and reference checks to verify the competency and reliability of their talent pool. By partnering with a provider that maintains high standards in their selection process, you can have confidence in the quality of the resources they provide.

5. Effective Communication and Collaboration:

Strong communication and collaboration are essential for successful staff augmentation. Your partner should have clear and efficient communication channels in place to facilitate seamless interactions between your existing team and the augmented resources. Regular updates, progress reports, and proactive issue resolution should be part of their communication framework. A collaborative partner will ensure effective knowledge transfer and integration of the augmented resources into your team, minimizing any disruptions and promoting a cohesive work environment.

6. Commitment to Quality and Client Satisfaction:

A reputable staff augmentation partner should prioritize quality and client satisfaction. They should have a proven track record of delivering high-quality services and meeting client expectations. When considering potential partners, ask for testimonials, case studies, and client references that demonstrate their ability to deliver successful outcomes. This information will provide insights into their commitment to excellence and their track record of achieving client satisfaction. A partner that emphasizes quality will ensure that you receive top-notch talent and achieve your project goals

7. Proven Track Record:

Consider the experience and track record of a staff augmentation partner before making a decision. Look for partners who have successfully executed similar projects in the past and have a strong reputation in the industry. They should be able to provide success stories and examples of their contributions to clients' achievements. A partner with a solid track record demonstrates their ability to navigate complex projects, adapt to evolving requirements, and deliver results. Such experience and expertise instill confidence in their capability to meet your expectations and drive project success.

Conclusion:

Finding the right staff augmentation partner is a critical decision that can significantly impact the success of your projects and the overall growth of your organization. By prioritizing qualities such as an extensive talent pool, expertise, flexibility, robust screening process, effective communication, commitment to quality, and a proven track record, you can ensure that you choose a partner who meets your specific needs and adds value to your business. Remember, selecting the right staff augmentation partner is an investment that can fuel your success in the ever-evolving business landscape. By partnering with a reputable provider such as shopdev you can access the right talent, enhance your project outcomes, and gain a competitive edge in your industry.