Tiny toddler told his Dad:
“I am puzzled so!
Outstaffing! Is it good?
Answer is you know!”
Launching a new product, reorganizing or scaling a business that requires improving platforms or installing fundamentally new software — this is a short list of reasons why a company may experience an acute shortage of IT specialists.
The most recent approach is either to entrust the project to a team of professionals, this we call an outsourcing, or to enhance already existing IT department with the third-party specialists who has required competence. This type of interaction is called an outstaffing.
In this article, we will talk about the advantages of outstaffing for the customer and pitfalls that you might face. We will explain what we mean by outstaffing in ITQuick, and why we do not really like to apply this word to our services.
We will also speculate upon the role of an intermediary company in the area of IT services. What role it plays, and whether the uberization that is happening all around can be a threat to such companies.
Outsourcing and Outstaffing: what is the difference?
Outsourcing－implementation of «turnkey» solution produced by another company. It can be a module, part of a large system. Outsourcing requires a full team of professionals with all roles covered: project manager, team leads, developers, software testers, technical writers from contractor and other roles to be played by executor / contractor. The work is carried out fully within the team, and communication with the customer goes through the project manager.
Outstaffing is leasing of the resources to the customer’s team. Usually, we are talking about developers and software testers, less often they are DevOps, business analysts, project managers. Outstaffing allows to hire only those specialists who are currently needed to solve a specific task. Project management, task setting, coordination, and therefore, in most cases, providing an architect and a team lead, all of these tasks are done by the customer’s team. Although rare exceptions happen.
Here are the obvious advantages of outstaffing:
- the chance to attract professionals with high and very high expertise to your short-term project
- fast (instant) enlargement of IT team for a specific task
- no need to make a person as an official company staff and provide him a workplace
- Time & Material payment, no downtime
- the possibility to quickly refuse the specialist
Uberization. Will digital platforms be able to replace the intermediary company?
Despite the fact that just 20 years ago IT outstaffing market in Russia did not even exist, it has developed very confidently over the past fifteen years. And now it has leveled off with others. Experts note that in the United States, that is a well-known captain in this area, there is a trend towards uberization of IT services, that is, to replace intermediaries with digital platforms to take on the functions of administration and act as an intermediary between the customer and the executor. Alexander Seldemirov, one of the founders of ITQuick, contemplates on whether intermediary companies still be needed in this new world:
«We can talk only about partial uberization of IT services. If we talk about the mass market, then yes, probably, such platforms are beginning their existence. They are rating specialists, for example, Upwork. In micro-projects and small startups, when the owner has an unlimited resource of time and wants to practice setting tasks directly to programmers-developers－you are welcome! »
We should mention here that for a number of tasks, this is an excellent and cost-effective approach. For a small project, you can and should look for a performer on the market.
But if we are talking about complex projects in such areas as Fintech, Proptech, Edutech or Legaltech that require the development of complex high-load software by the developer who joins the customer’s already working team, theoretically it is also possible, but … very painful and inefficient! Here, the coordinating and synchronizing role of the intermediary company comes to the fore.
Yes, it is quite possible to find an advanced developer in almost any field on the market. But for successful communication, setting tasks, and including a new person in the team, you would have to spend huge financial and timing budgets. It’s like hiring a builder who knows how to perfectly glue wallpaper for the entire scope of work: from rough finishing to installing the kitchen. In fact, this is exactly why we need project managers and business analysts. The presence of these specialists guarantees an accurate definition of the range of tasks, mutual understanding of the parties and a quick start-up. (And, by the way, that is exactly the reason why we don’t like to call ITQuick services as outstaffing. What do we mean by that? We will explain in the next section)
In the meantime, it is clearly too early to fear the replacement of the role of an intermediary company at the market of complex technical tasks and the uberization of the IT outstaffing market.