Software Development Staff Augmentation: Is it the Right Choice for Your Business?

There is an increased reliance on new technologies to reduce costs and increase efficiency for businesses to better compete. The resources that these projects require and the increasing number of projects that companies undertake has driven up the demand for IT staff like never before. Moreover, these increases in demand have caused an increase in costs for such projects and the IT staff required. Businesses have turned to staff augmentation and project outsourcing to complete projects on time and reduce costs.

New Software Increases Competitiveness

The need for new software can present itself in multiple facets within a business. Whether it be to introduce a new product, develop a database to mine leads, create a new website or replace an aging legacy system, businesses require software to keep themselves competitive in today’s marketplace.

There are many things to consider when cogitating over a new project. Often times the knowledge and experience in coding language, coding framework or the kind of system needing to be developed can drive the need for companies to make a change in staff. Their main considerations are to hire an entirely new team, augment their current staff, replace a team or to outsource the project altogether.

To Augment or Not To Augment, That is the Question

IT Staff Augmentation is the process of hiring a direct employee or contracting one to fill the required role. There are benefits to both and each company and project will have their own specific needs.

Hiring Direct and Using a Recruiter

Hiring directly is the costliest option, but provides the greatest oversight and is a good, long-term investment for the company when the correct person for the role is chosen.  Many organizations are challenged in recruiting top-notch IT staff directly, so they hire a recruitment firm to hire on their behalf. This option will often lead to the hiring of the right staff member for the position, but also adds to the cost of hiring directly, increasing the cost on average by 20%.

Contracts Here, Get Your Contracts

Another option is to contract out your software development. This can be undertaken through various forms including hiring a freelancer directly, partnering with a software development company to contract their employees or outsourcing the entire project altogether to a third-party software development firm.

Freelancers

Hiring a freelancer can be beneficial in many ways, but can also cripple the organization’s software development efforts if not done properly.

     Pros:

• Decreased expenses (not having to pay for benefits, taxes, space and equipment fees)
• Speeding up the development cycle by paying by the project and not the hour
• Skirting the legal ramifications which accompany hiring directly

     Cons:

• Potentially losing the freelancer mid-project for various reasons
• Confidentiality risks
• A lack of future maintenance
• Often require management personnel to oversee the freelancer’s day to day work

Contracting Through a Software Development Firm

Many organizations take a different path. They augment their staff through contracting an employee of a software development firm. This option provides the same pros we found when hiring a freelancer, however, the cons that accompany contracting a freelancer are often avoided when contracting a software development agent through a software development firm.

Cons Avoided:

• Losing the agent part way through the project is often avoided, as the firm is contracting out their direct employee and thus has a contract in place to provide development services through the entire duration of the project.
• Confidentiality risks can be avoided through the implementation of a non-disclosure agreement. This can be put in place with a freelancer as well, but the company who is hiring the contractor has less leverage legally speaking against a single freelancer than they do against a software development organization as an entity.
• Because the software development firm often provides ongoing maintenance as a service, the lack of future maintenance issue is, well, often a non-issue.
• The required oversight of a freelancer by somebody from your organization is not required when contracting with a software development firm. The firm itself oversees the contracted agent because this agent works directly for the firm and thus answers to their management team.

Open lines of communication are an important aspect to contracting through a software development firm because there are more moving parts and personnel in place than the hiring of a single freelancer.

Outsourcing Your Project

The final option for augmenting your staff is to simply farm out the entire project to a third-party software development partner. This option works well for organizations who need a system to be develop but want to avoid the costs associated with hiring an entire team to handle the development in-house. This provides an opportunity to contract with an organization which specializes in the type of system required, providing a high-level of experience and quality to the development. This option also avoids the required training and management oversight that hiring direct or contracting freelancers does. Open communication is also paramount to the success of such a strategy.

Conclusion

In closing, the successful implementation of new software to be deployed in today’s highly competitive business landscape is crucial to the ongoing success of an organization. The need for software development to be streamlined and highly cost-effective is challenging for most businesses, but remains a consistent target. Companies have many options when deciding how to best implement the development efforts and each option has its unique pros and cons. More and more companies are choosing to augment their staff through contracting with software development firms. Finding the right solution is specific to each company’s individual goals, strategies and situations.