The article highlights essential steps each business needs to make to gain maximum value from its staff augmentation endeavor and how augmented teams affect digital transformation and boost the growth of creative industries.
Today, thousands of small and micro-businesses that work at the intersection of cutting edge technology and creativity appear to be the harbinger of an entirely new economic order that provides a new paradigm for how we do and organize business, educate younger generations, and measure value. This paradigm makes a significant impact on every single aspect of our life, including how modern cities are planned and built.
The rapid growth of artificial intelligence and automation, which herald the 4th Industrial Revolution, has undoubtedly affected employment globally. The lack of interest in STEM and computer engineering education was observed in the developed world a decade ago. It led to situations when countries like the USA and South Korea, which have traditionally pioneered and cultivated innovative technologies, suffer today from the lack of talent who’s supposed to bring their creative ideas to life.
Besides, there’re countries like Israel which are ahead of the curve in terms of R&D and investments in innovative solutions but which have small domestic talent pools co-measurable with the country’s population.
In the UK alone, the creative industry has already smashed through the £100 billion mark in value. It employs 2 million people. However, as The Edge Foundation highlights, the UK is already losing £63 billion a year because of 600,000 unfilled vacancies in digital technology. Unsurprisingly, 89% of employers feel that the tech skills shortage will affect them seriously in the months to come. Does it mean the end of the creative economy in the UK?
According to the US Bureau of Labor Statistics, by 2026, the entire IT workforce need will exceed 1.2 million. Does it mean the US creative industry will stagnate and stymie? Not at all. It only means that, like today, there will still be two types of businesses in the future: those that go beyond local market limitations and realize the power of globalization and collaboration, and those that still rely on local talent pools and building in-house expertise. Isn’t it obvious who’ll be more successful?
To ensure business continuity and jump fast on innovation bandwagon, you should be flexible scaling your software engineering workforce up and down depending on your current project needs and investment size or cash flow. Therefore, you must have a well-crafted team scaling strategy put in place, aligned with company goals and needs, and approved by all stakeholders.
To grow your dev muscles, your brand needs to transform digitally and become data-savvy. Software development outsourcing is a standard way to do more for less that companies all over the world have been using for a while to save costs and improve top-line growth.
With the global market size of outsourced application development services estimated at $85.6 billion, staff augmentation is the most popular engagement model.
Staff augmentation (aka team extension) is a typical software development outsourcing strategy that organizations use globally to rapidly scale up their internal teams and better meet their project development and technology needs. By extending and distributing staff (i.e., hiring external specialists to work for the company as full-time contractors or part-time consultants), you can bridge the knowledge gap, significantly speed up your time to hire and time to market, and in-source new expertise and competencies from a staff augmentation provider.
According to the World Economic Forum 2018 Report, between one-half and two-thirds of companies are likely to use outsourcing services, as well as involve temporary employees and freelancers as ad-hoc resources to existing software dev teams.
Expansion of tech talent teams offers many benefits, including fast project execution times, flexibility in scalability when needed, and access cost-effective yet highly-qualified developers. By encouraging clear communication, business continuity, use of project management and productivity tools, clean code, and documentation-driven development (DDD), companies have a better chance to succeed with their technology solutions development project.
However, many companies don't know how to get the most out of staff augmentation services they use. Here are some tips and suggestions.
1. Foster clear and open communication
According to Salesforce, 86% of employees and senior executives cite the lack of collaborative cooperation or ineffective communication as the primary cause of workplace failures.
Another study by OSF Global finds that 70% of screwed-up projects are related to the lack of communication.
Clear communication is essential to the success of every development project, no matter if it’s in-house or outsourced. Processes should be established early in the development cycle to ensure transparency and open communication among stakeholders down the road.
When you use staff augmentation, make sure to be as clear and detailed in what you want to achieve with this scaling strategy, what limitations you’re likely to encounter, how you plan and manage software projects internally, what corporate culture you have, etc. Staff augmentation implies that you, as a client, manage your project and bear full accountability for milestones delivery and the outcome. Nonetheless, it’s the job of your outsourcing provider to supply candidates for your defined positions, build a team and onboard each member, and integrate your extended or dedicated offshore team into your corporate culture. As such, the more you trust your staff augmentation provider, the more details you’ll share and the more common mistakes you’ll be able to avoid down the road.
Messengers and productivity tools such as Slack, WhatsApp, or Trello stimulate the exchange of ideas between you and your outsourcing partner.
Here's an important tip to share – always have a face-to-face discussion with your provider before signing a contract and making commitments. Try to find one that can either let you test drive your augmented staff for several days for free and give you a fast employee replacement option if you aren't satisfied with a particular resource. Alternatively, start your staff augmentation engagement with a pilot project (e.g., a PoC development or non-core dev tasks) to check the provider’s responsiveness and competence as well as overall attitude and how they treat you as a client. The rule of thumb here is to start small, observe, make conclusions, and scale.
2. Define roles and evaluate work processes
Defining the roles of everyone involved in your project team ensures that commitments are met. Both internal and external developers need to understand the basic principles of your project and how they fit into your vision.
At this stage, make sure to appoint project and/or team leaders to ensure that individual tasks are performed promptly and according to expectations. Clearly defined roles also provide developers with a platform for sharing ideas and feedback.
To use staff augmentation effectively, start with the implementation of team development workflows. All employees should be aware of all the project development stages and nuances, including when meetings are scheduled, what tasks have been assigned and to whom, etc.
A documented workflow ensures that your external staff can easily fit into the team and make a positive impact.
Don’t forget that staff augmentation is well suited for both long-term strategic software development and short-term tactical endeavors. I highly recommend that you engage with a provider that offers fractional resource allocation, i.e., an extremely lean model where you pay for what you actually use. Let’s say you’ve determined in this step that you need a QA guy for just two full workdays of the week, not all five. While most providers (you’ll be contacting with your quote requests) will insist that you high a full-time resource (who’ll be sitting on their hands for 60% of the time and wasting your money), there’re some that will supply a required resource for a specified period. That’s like applying a T&M model to staff augmentation.
Also, some staff augmentation companies today use a shared pool of talent to avoid keeping the so-called bench, i.e., billable employees who have idle time as a result of project completion or role elimination and wait for a new project to join. It costs money to keep inactive people on teams, so crowdsourcing candidates from the same pool makes sense, especially for smaller boutique-style providers. Access to the shared pool of pre-vetted talent (i.e., your provider’s recruitment consultants have checked each person’s background and portfolio, verified job references, and made a conclusion that the person is a good match for role on your project team) allows your staff augmentation partner to plan your team scaling in advance and with better precision and increase your time to hire 2-3x compared to providers with an internal bench.
Once you have your core roles defined and the augmented team set up, sourcing talent from a shared pool to fill your vacancies in peak times proves effective. In countries that offer staff augmentation, labor legislation isn’t as rigid as in North America or within the EU. For instance, in Ukraine, which is indisputably the leader for outsourced software development in Europe (with its pool of 180,000 tech specialists and counting), around 90% of all specialists working for staff augmentation companies are employed as direct-hire consultants and can be dismissed with a 14-days notice.
Also, when it comes to remuneration, the total cost of an employed software developer based in Ukraine is 3-4x lower than in the USA or 2x lower than in Israel. It's attributed to the fact that their salary already includes all taxes, social benefits, and indirect costs such as office space, workstation, etc.
In most cases, it’s a win-win for all: staff augmentation providers, buyers and local software developers. On the one hand, staff augmentation helps developing nations avoid brain drain as the talent stays within the country and becomes the foundation for the evolution of internal IT markets and digital product industry as a whole. On the other hand, developers win from pretty favorable taxation conditions and being part of a new creative economy. In their home countries, they make big money, buy houses, change cars and travel a lot.
"Many companies that leverage staff augmentation win from cost arbitrage, faster time to hire, access to external expertise that’s scarce or limited locally, and gain a strong competitive advantage," says Colette Wyatt, CEO of a UK-based software house Evolve. "That’s especially true of small companies and startups that have to struggle with big fish, i.e., tech giants that drain local talent pools by offering better paid jobs and 'perks' that small firms simply can't afford."
The rule of thumb:
"If the mountain will not come to Muhammad, then Muhammad must go to the mountain."
3. Leverage project management tools and technologies
According to the PMI Report, organizations that use any project management methodology usually better meet the budget, better comply with the schedule, scope of work, and quality standards, and better achieve the expected results.
To get the most out of the extended software development team, companies should use project management tools like Asana, Jira, or Basecamp help track your project progress at each stage of the development life cycle.
In today’s data-driven world, when disciplines such as data analytics and data science gain momentum and become indispensable for building robust business intelligence and generating essential insights to drive business further, it’s a shame not to take advantage of the data potential.
There’re modern AI-based project management tools that come in handy and help facilitate project management on the augmented software teams.
Let’s review some of them and see how they take PM to the next maturity and quality level.
Two generations of PM tools
In fact, there’re two generations of such tools.
The first generation consists of tools that rely on humans (e.g., PM, tech/team lead, etc.) to input data manually and only use AI to some extent. For example, products like stratejos and Memo focus on assisting with project ballpark estimates, budget planning, sprint management, and team knowledge sharing and management.
These early AI PM tools can automate tasks, provide insights, and even foster communication within the team. However, as mentioned above, people are still needed to input data correctly, update tools on time, make adjustments, and corrections.
The second generation includes AI PM tools that use machine learning algorithms to understand team performance and productivity better, identify bottlenecks, showstoppers, and other issues, and to automate problem-solving.
As such AI PM assistants expand their understanding of what’s going on inside the team, new metrics will be revealed to better gauge quality, performance, learning, and re-skilling change in scope, etc.
An example of the second-gen tools is Estimatess, an AI-based platform that analyzes how millions of projects and scopes have been developed around the world, and understands team performance metrics and patterns used exclusively on your project. This helps make project estimation experience faster, more reliable, and accurate.
In the future, AI will know each change made to the source code and will link it to tasks performed and responsible people. This will allow linking bugs to a line of code, determine who exactly made that error in the code, and provide actionable suggestions for bug fixing and productivity improvement.
4. Encourage documentation-driven development
Code documentation (aka documentation driven development) is the basis of any working software. The software requires constant updating and maintenance, so make sure your extended team keeps a record of their code at each stage of development using tools such as Github, BitBucket, GitLab, or SourceForge.
Companies should decide on a collective approach to code documentation that will work for everyone, including augmented staff. Tools such as Swagger help introduce clear methodologies for code documentation and other important methods such as paired programming.
Your outsourcing manager should make sure both in-house and extended teams work to the same ethical standards and keep the code readable, understandable, and maintainable. If you choose to distribute your development with more augmented teams in the future and if you need to pass the code over to a new team, it should be a breeze for them to plug in and continue working with the code.
5. Just be flexible
Extended teams are easier to integrate if companies encourage flexibility. Maintaining rigid development processes rarely leads to the desired results.
Development methodologies such as Agile allow teams to be more flexible and achieve positive results. According to PwC's Agile Project Delivery Confidence survey, Agile projects are 28% more successful than traditional waterfall projects.
When working with an extended team, a certain level of compromise is always required. Extended teams usually have a lot of experience with in-house developers and often have a unique understanding of best practices in workflow management. By maintaining flexibility and encouraging feedback, augmented teams can help identify more effective ways of bringing business value.
To wrap up, here’re the essential steps you need to make to succeed in your staff augmentation journey:
- communicate your project needs, goals and anticipated results clearly,
- define roles and processes,
- use both traditional and innovative project management tools that take advantage of artificial intelligence and data science,
- always deliver clean and well-documented code, and
- be flexible and adaptable to innovative corporate cultures (e.g., data-driven) and software development methodologies.
Staff augmentation is perfect for projects with rapidly changing business and technology requirements as you don’t have to hire in-house developers each time you need to boost your core team productivity or find talent that’s too expensive or hard to find within your home country. If you want to map and implement your creative value chains, augmented teams are a way to go. Otherwise, why would big name brands like MyHeritage, PlayTech or Rakuten rush to leverage staff augmentation abroad?
Featured Photo by Daniel Cheung on Unsplash