No matter how skeptical Russia may be about remote work, 2019 completely changed the mindset of managers in the opposite direction. And now, attracting an external specialist as a contractor is a common practice, especially in the IT field. But it's not as simple as originally envisioned.
There have been many options for interaction that confuse customers: outsourcing, dedicated teams, staff augmentation, Product Development Services, and others. But personally, we try not to complicate things.
Our main cooperation formats are outsourcing and outstaffing of developers, project managers, testers, and other IT specialists. These are two different approaches to resource allocation for client companies, each with its specific characteristics. The choice largely depends on the specific needs and goals of the client.
- IT outsourcing is the process of transferring the execution of specific tasks or functions to our digital agency. We take full control of the project, preparing a roadmap and an estimate in advance. The estimate includes development hours and the total cost of the services provided.
Our experience. A Russian retailer plans to improve its online store. The client doesn't have the resources to carry out the task independently, and they don't want to create their own IT department. They need an outsourcing company to take care of the website's development. After analyzing the client's goals, we selected the right specialists for modifying and maintaining the product. You can find a full list of the provided services in the "Mascotte Shoe and Accessories Online Store" case study.
- IT-outstaffing is the hiring of our specialists for an extended period to join the client's team for the creation and technical support of products. Our IT company is not an intermediary between the client and freelancers. We provide employees who work officially with us and are located in our office.
Our experience. A major bank is improving and expanding its loyalty program system in the mobile and web versions of its application. The bank's IT department is busy maintaining the entire online service. The dedicated team lacks a developer for temporary technical support and the implementation of several features in the client's program. To fill the job position, the client approached us and hired a new employee without the hassle of official paperwork. Read more details in the "Support and Customization for One of the Leading Banks in the Country" case study.
Recently, we've noticed that the once very popular staff augmentation (outstaffing) model has been losing ground and giving way to a higher number of contracts for outsourcing programmers. After reviewing our experience, we observed significant differences in performance between the two models.
Reasons for the growth of outsourcing and the fall of outstaffing
We conducted a small analysis of our activities and identified three key aspects as to why trends in working with our clients are changing.
Responsibility
In outsourcing, the manager or representative of the company is involved in the project at the initial stage and during the final product delivery. After understanding what the client wants, we coordinate prototypes and begin development. We independently organize our processes and work towards the set goal. We don't make the client think for us and don't distract them from their own business.
Outstaffing is organized differently. The management of the specialist and development, in general, is done by the client or a responsible person on their side. Working in this model requires a better understanding of the technical side of the project and more responsibility. The client assigns tasks to outstaff specialists, constantly interacts with them, and monitors the results.
Benefits
Outsourcing is often more practical for clients, especially for those who don't want to maintain their own team of developers. First, you need to find suitable team members, and second, there's no guarantee that the new employees will have enough experience. With outsourcing specialists, you don't face these difficulties. We select the performers from our own team who match the project's requirements. The cost directly depends on the initial requirements and is billed based on the work performed or according to the terms stipulated in the contract.
Outstaffing is like "renting" a specialist for a pre-agreed period. Payment depends directly on the number of hours worked by the outstaffer and is billed monthly. If the client and/or their responsible person don't pay proper attention to the work process, the funds may be wasted.
Trust
Undoubtedly, this aspect is important in both collaboration directions. However, there's a difference between hiring a specialist and closely monitoring task completion and entrusting the development or expansion of a product entirely into our capable hands.
Years of cooperation, professional expertise, and successfully completed projects have led to trusting relationships with many clients. Therefore, they have no worries about entrusting us with their systems and web applications.
Every client has the right to assess their desired level of involvement in the development process. We do not restrict companies in choosing the working format with our digital agency. Our goal is to simplify it for them.
