When Outsourcing Is the Right Decision

September 01, 2016
By Chris Cali Feb 9, 2015

There is a pivotal point in the lifespan of all companies when their technological infrastructure becomes outdated, flimsy and unstable. At this moment, they face a choice: they can upgrade with the support of an outsourced team, or they can attempt to “go it alone” using only in-house assets.

Here’s the catch: Every time you amend your core infrastructure, your business undergoes a transformative change. If you are relying exclusively on internal assets, you may not have the resources to successfully transition. This paradigm is exactly why we founded DevSpark, an outsourced development provider. We offer Fortune 500 companies a chance to fix their tech with the best before they bleed out more. Outsourced development providers ensure that your company continues operating seamlessly and protecting its data.

Development projects are fundamentally problematic for most businesses for two main reasons: 1) they require a serious but temporary engineering effort and 2) they create or alter a product that is intrinsic to a company’s existence. Consider this analogy: if your company needs a bigger headquarters, you buy or rent a bigger building. But if your company needs to upgrade its software…? There simply isn’t an existing structure to go move some digital file cabinets into.

By the same token, just as you wouldn’t ask your maintenance staff to break ground on the new corporate offices, most serious development projects are beyond the scope of an internal development team. The answer to this quandary? We would suggest an outsourced development partner.

There are many kinds of outsourced partners and strategies. We recommend staff augmentation as the surest fit for most businesses that are undergoing holistic technology restructuring. Staff augmentation is a staffing strategy where outsourced staff supplements and supports an internal development team. Whatever staffing or outsourcing strategy you employ, the reality is the same: You don’t have as many developers as you need, so we provide them (often from an offshore location).

As an industry, outsourced services is growing rapidly, valued at over $100 billion in 2014, while staff augmentation is projected at a value of $45 billion this year. As the global workforce becomes more distributed, it makes more sense to “hire” remote staff than to ship an entire project off to an outsourcing provider. But while the what and the why might be totally clear, the when is often confusing.

We’ve heard executives and senior managers say that they are interested in outsourcing and staff augmentation for the cost-savings it provides, but they aren’t sure their project is the right fit, their company is culturally ready, or they’re just worried about the risk of partnering so closely with an offshore partner.

The truth is, most of these concerns betray a fundamental misunderstanding of the way outsourcing works. Outsourced staffing engagements are precisely intended to reduce risk, even as a higher priority than reducing cost (though this is undoubtedly another key benefit).

Outsourced engagements transfer the responsibility of hiring, vetting, training and managing development staff for the lifetime of a project, and consequently the offshore/nearshore provider is the one who must assume the burden of the risks that come with this balancing act.

The process works, of course, because outsourcing providers have designed their businesses to handle this flux. They have developed robust talent pipelines and the internal flexibility to stay constantly on top of all their client’s development needs.

Our clients have businesses that are structured quite differently, that have been built brick-by-brick and generally cannot and should not tolerate this kind of flux. For companies like this, saving money is a boon. More money means more flexibility, new hires, etc. Saving money is great, but it does not encourage growth with the same enthusiasm as eliminating risk.

Think about this question: How many well-funded startups fail? The answer is, most of them. Full bank accounts are not a surefire prescription for success, though they certainly help. The ability to reduce risk, on the other hand, necessarily increases a company’s ability to succeed and grow.

In this context, outsourced staff augmentation engagements allow businesses to increase their chances of optimal success on a project-by-project basis, allowing them to take on more work, more staff, and drive revenue.
We’ve all heard the concerns about the U.S. shipping jobs overseas, but the reality is, staff augmentation engagements with nearshore development providers often result in companies expanding their U.S. staff, not contracting it.
So when is outsourced staffing the best option? Staff augmentation is ideal for businesses whose chief aim is growth and who are looking to establish the relationships that will get them there. It is for large companies with serious development needs who want to avoid the feast-and-famine cycles of staff fluctuation and focus on the bigger picture.

Our company, DevSpark, prides itself on delivering the highest quality talent. The engagements we feel are most successful are the longest-term ones where we are able to grow our teams alongside the clients’ business. In some of our longest-term, most successful engagements, our clients simply introduce us as their development team.

With the speed of technological advancement, companies large and small are faced almost constantly by the need to upgrade. In this rapidly evolving technological landscape, businesses and their leaders must use every resource to the best of their ability to adapt and thrive. The question that they face, then, is simple: is your internal team ready to expand (and contract) to meet the technological challenges you face, or would it be more efficient to use the external resources ready-made and available to you?

We believe that for most companies, the answer is almost always the latter.

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