The Added Value of Outsourcing – Exploring the Benefits of Staff Augmentation







The Added Value of Outsourcing – Exploring the Benefits of Staff Augmentation

Published: 2024/04/25

6 min read

According to respected industry observers, revenue in the IT outsourcing market is projected to reach $512.50 billion USD in 2024. This increased market share should not be surprising, considering the demonstrable value outsourcing and nearsourcing software development has had on organizations across markets and sectors. From controlling costs to achieving a faster time to market, augmenting a project with external specialists can increase scalability, maximize efficiency and enable access to domain expertise, niche skills and emerging technologies. While these benefits are rightly celebrated, and sought after, there are other, quantifiable advantages an external development team can bring to an organization. Read on to find out more.

Staff augmentation mitigates talent shortages

While the COVID-19 pandemic doubtless had an impact on companies’ abilities to recruit and hire properly trained specialists, a ‘return to normalcy’ in a post-pandemic world has not lessened the demands of finding capable experts. Statista reports that in 2023, 54% of organizations still reported a skills shortage in tech. IT staff augmentation is a proven way to address the industry-wide challenge of talent shortages.

How does staff augmentation deliver value?

Deeper talent pools – Widen your search for qualified specialists to other markets as a way of overcoming a lack of talent in your area.

Reduced recruitment efforts – Redirect efforts (both in terms of time and money) to other areas of your business while still quickly accessing the talent you need.

Niche expertise – Assess domain knowledge and real-world experience with technologies that your in-house specialists may lack, like generative AI and cloud computing.

Increased scalability –Augment or decrease the number of people on a project, without having to worry about overheads like office space, hardware and other technical equipment.

Maximized operations – Ensure development services can run around the clock by availing of nearshore and offshore teams that work different shifts. For example, when a development team in California starts work, their LATAM partners have already been working on the project for a few hours and before them, a European team has been involved. This increased capacity speeds up development and accelerates time to market, which explains why, according to Bloomberg, 80% of North American companies are considering nearshore support.

Staff augmentation brings fresh perspectives

Functional fixedness can impede creativity and problem-solving because it restricts an individual’s ability to think outside the box or consider novel approaches. Overcoming functional fixedness often requires a shift in perspective and the ability to view familiar objects in new and unconventional ways. This is one of the added benefits of working with an external development team – an outsider’s perspective and fresh pair or eyes can come at a problem at a completely different way. While a new take on a situation may not solve an issue on its own, this thinking could inspire others and trigger a round of brainstorming that leads to an answer.

By actively promoting open communication, diverse perspectives, and critical evaluation, it’s possible to reduce the negative effects of groupthink and make more informed and effective decisions within a group setting. IT staff augmentation provides untapped potential in this regard and helps to challenge established norms and conventional approaches – a real-life antidote to ‘we’ve always done it this way.’

While turning to an experienced, proven software development partner that has the staff augmentation capabilities you need is a crucial step, there are other considerations to bear in mind.

Diversity beyond demographics

  • Diversity is much more than culture, language, religion, gender and education – though these are all important factors that can enrich a team. But creating an eclectic interdisciplinary team means also concentrating on different skillsets (technical and soft), professional and personal experiences and perspectives. Assembling a development team with such a rich tapestry of backgrounds empowers it to tackle problems with different viewpoints and ideas.
  • Even in today’s globalized world, which, after the COVID-19 pandemic became a much more virtual one, accessing a diverse pool of talent can be difficult – and expensive. Teaming up with an IT staff augmentation partner streamlines this process and enables companies to quickly access a global pool of talent, which rapidly increases capacity and encourages innovation through a blend of backgrounds.

Elasticity in team dynamics

  • Volatile markets and dynamic industry changes mean that business goals can quickly change – that’s why team elasticity is so crucial. Quickly ramping up or scaling down presents significant challenges. For the former, attracting, recruiting and hiring qualified specialists requires, patience, resources and a significant investment. But perhaps the biggest issue is time. In an ever-competitive world, lost time for your product opens a window for your competition. For the latter, reducing a team’s capacity may mean having to let go proven experts who will search for employment elsewhere. In an industry which suffers from a lack of talent, this attrition can be disastrous. IT staff augmentation enables organizations to scale their teams up or down swiftly, while ensuring optimal resource allocation.

Strategic team composition

  • Forward-thinking organizations should adopt a strategic approach to team composition and consider not only technical skills but also project-specific requirements. This could be related to type of technology (AI, cloud, embedded software) or experience in a niche market (sports betting). Most companies do not have domain expertise with all industries on staff – this is precisely how a staff augmentation company can help.
  • An IT staff augmentation company facilitates the assembly of teams with precisely tailored skill sets that optimize project outcomes. Hiring, or training in-house staff can take months, if not years, but accessing the competences you need with an external development team can be done in a matter of weeks.

Staff augmentation success stories

Companies around the world have successfully navigated talent shortages by seamlessly integrating augmented teams into their projects. This could take several different forms, depending on a company’s needs; autonomous team, dedicated team, mixed team or staff augmentation and reflect different goals; team extension, product innovation or digital acceleration. Here are some examples of how a software development partner can help.

Creating new functionalities with upgraded technologies

Baillie Gifford, the globally recognized wealth management firm, worked with Software Mind to transfer and update existing functionalities from their Oracle-based systems to web services. Additionally, external developers helped build solutions based on CQRS, Event-Driven Messaging, DDD and REST. According to Tracy Guyan, Senior Programme Manager at Baillie Gifford, “Software Mind, within Baillie Gifford, deliver a variety of things, for the value varies from team to team. We have people embedded within our web, external web space. We have people embedded in our security space, and then we have people embedded in our application development team. So, it’s quite a mixed area that they’re adding value to all the time.”

Enhancing a web application

Mortgage Advice Bureau (MAB), a leading mortgage intermediary brand, turned to Software Mind for a range of services that included building, testing and packaging new code, establishing a steady software delivery pipeline, enhancing the platform architecture, writing, running and managing automation and manual testing and integrating their platform with an external ID verification system. MAB and the Software Mind team formed a trusting relationship based on honesty and ownership. Moreover, the quality of the work met expectations, as Lucian Morris, CIO at MAB, reveals “The Software Mind team, both the developers and the QAs, come with a very high level of capability, both in terms of their ability to develop, but obviously also their ability to test and proof solutions. What they’ve built has been excellent. It’s been well-tested, and it’s been executed very well.”

Developing a pioneering, AI-based roleplaying game platform

Voice of Fire, a gaming startup that’s reimagining the traditional roleplaying game experience, teamed up with Software Mind to build an innovative, AI-based gaming solution from scratch. The scope of the work included implementing an AI bot framework and large language model (LLM), consulting on startup business strategies, sharing research and development and SaaS product development know-how and providing comprehensive support on technical and non-technical issues. Reflecting on the performance of external experts, Luke Crane, CEO of Voice of Fire, said “ I would recommend other companies using Software Mind’s services and their personnel for a few reasons. The main reason obviously is that they delivered to my satisfaction. Software Mind underpromised and overdelivered, and they delivered on time and under budget.”

In today’s competitive environment, accessing both local and global talents pools through IT staff augmentation should no longer be considered a nice-to-have, but a must. It enables organizations to tap into specialized expertise worldwide and overcome geographical limitations. That’s why companies across markets and sectors turn to experts from Software Mind, who have been empowering organizations with cross-functional engineering teams for 25+ years. To find out how they can help your company, fill out this contact form.

About the authorJavier Minsky

CEO at Software Mind LATAM

Javier, an accomplished Systems Engineer with a bachelor’s degree from Universidad Tecnológica Nacional and a master’s degree from Universidad de Belgrano, co-founded Virtualmind in 2005 and served as its visionary CEO. Under his leadership, Virtualmind, now operating as Software Mind LATAM, has grown significantly and become a leading software industry player known for cutting-edge solutions and high-quality staff augmentation services for North American companies. Javier is passionate about innovation and is committed to continuous professional development, for everyone at Software Mind LATAM.

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