The tech talent shortage has prompted both established companies and startups to trust their software projects to remote developers and offshore vendors. There are reasons, though, why you would rather refrain from fully outsourcing your software projects. As a startup, you may want to retain expertise in-house. You may already have an in-house development team at your disposal but may need to enhance it with experts knowledgeable in a particular technology and capable of handling specific tasks. Also, you may be willing to keep full control over the project resources, the management process, and milestones delivery.
The good news is – startup product development outsourcing is not the only way to go. Many startups use software team augmentation (also known as staff augmentation) model to increase their top-line growth and do more dev work for less money.
Let’s now examine more specifically what team augmentation is and how you can use it to your benefit.
What Is Software Team Augmentation?
Team augmentation has been a buzzword for quite a while on a software development scene. Yes, this is one more outsourcing collaboration model, but it’s distinctly different from a full-fledged project outsourcing. When you outsource a software project in a traditional way, you offload a development job, and your provider delivers to your budget while relieving you of project management, IT, HR, and admin burden. When you leverage team augmentation, the vendor builds or extends your team so that you get additional dev muscles at peak project times.
How exactly does a vendor achieve this?
By adding tech staff to your team on a long-term and short-term basis, depending on your current needs. The outsourcing company takes full care of the recruiting and hiring process as well as of all legal and administrative issues. You get to manage your augmented dedicated team directly as well as the augmented tech staff, but the vendor remains the direct employer. At the end of the month (by whatever date you agree on), your outsourcing partner sends you a bill that includes augmented tech staff salaries and its service fee.
Another definition of staff augmentation is team extension. By using additional resources on an ad-hoc basis, you get to match the exact skill set needed to complete your project. Your outsourcing provider headhunts and hires individuals who fit into your organizational culture and comply with your management style, while you select and interview them.
How Team Augmentation Model Benefits Startups
In software development outsourcing, each collaboration models has pros and cons and works best depending on the company, the current tasks, and the specifics of a particular project. Team augmentation for startups has several distinct benefits, namely:
Access to global talent and/or closed/untapped pools offshore
There are regions in the world where tech talent abounds. In Ukraine, for example, over 16,000 tech grads join the workforce each year. These real gems fostered by post-USSR educational systems are nearly impossible to find elsewhere.
Lower cost of development talent and resources
You may need to extend your existing team with a qualified expert in a particular field, but an average salary in your area for such specialists defies imagination. For a startup on a shoestring budget, staff augmentation offers a realistic solution to cutting costs without sacrificing quality.
Faster time to hit the market
Staff augmentation saves time it would typically take you to find, recruit, and hire the expert you need. Using augmented tech staff accelerates the development process and ensures faster time-to-value. When you need to develop an MVP by a specific deadline to receive the second round of investments, the development speed truly matters.
Better quality due to access to rare skills and technologies
The skillsets for certain projects can be very specific. For example, fintech startups frequently need experts with excellent working knowledge of both financial services and particular technology. While finding and hiring such an expert could take months, team augmentation grants you access to rare skill sets and helps deliver better product quality.
Flexible work hours
This aspect is rarely thought of, but a time zone difference, usually perceived as an obstacle when it comes to outsourcing to remote locations, may actually work to your advantage. When you need to make an urgent change to your project, a team member working on the other side of the globe may get their hands on it faster than local developers.
Last but not least: you may have varying development needs depending on a phase of your project. In this case, hiring augmented tech staff for a limited time would be more justified than paying dev salaries to people whose skills you use rarely or occasionally.
For instance, at 8allocate, we offer fractional resource allocation, which means you pay for what you actually use. Let’s say you need a QA engineer for just 2 full days a week out of five. While most offshore staff augmentation providers will insist that you hire a full-time QA resource (who’ll be sitting on their hands for 70% of the time which you’ll have to pay for), we let you hire one for just 16 hours a week and will only charge you for this work scope due to our ability to juggle staff augmentation with T&M and hybrid models.
Real-life staff augmentation success stories
Skype, Opera, Github, Slack, Basecamp, and Alibaba are big brands now, but they initially launched as startups with outsourced development. Unsurprisingly, a leading freelancing platform Upwork was built offshore. WhatsApp, a popular messaging app that founded in 2009 by former Yahoo employees and later purchased by Facebook is mostly developed in Eastern Europe, with the core team being responsible primarily for customer service.
Groove, a company offering SaaS solutions for optimizing customer service, outsourced the software development part and saved a substantial portion of its startup budget while retaining full ownership of the company.
More specifically, can staff augmentation become the key to your success? Here is a real-world example of a successful company that has used staff augmentation to power its projects:
Time Warner Cable (rebranded in 2016 as Spectrum) was a US cable giant operating in 29 states. Although not a startup, the company came to the pivotal point when it was necessary to introduce some radical innovations to stay afloat.
When TWC arrived at a landmark decision to expand its offering to include a new networking technology, the need to make significant upgrades to its existing network infrastructure became evident. To accomplish this goal, the company needed additional tech staff: project managers, network engineers, and architects, software developers, site supervisors, etc. Using third party contractors was against TWC business philosophy since the company wanted to retain 100% control over its expertise and resources.
To resolve this dilemma, the company turned to Keshav Consulting Solutions, an IT staffing firm whose recruiters used their expertise to sift through their pool of candidates and find the perfect tech staff to work on the task. For several months, augmented tech staff was working on a wide range of technological and software solutions, to help prepare TWC facilities for the launch of new services.
The result was more than satisfying. TWC completed the project ahead of schedule. Moreover, it managed to reduce the project’s budget by 20%. Most importantly, leveraging staff augmentation allowed the cable giant to gain a competitive edge and retain market share.
A revolutionary startup SolarGaps produces the world’s first-ever smart blinds that automatically track the sun and generate electricity from its energy while keeping your apartment or office cool. This IoT technology uses active shading to decrease AC consumption and let you lower your utility bills by 30%. While SolarGap’s core dev team was busy with back-end integrations and embedded development, they hired us to assist with native mobile apps development in augmented reality (AR). We ensured a fast project start by augmenting SolarGap’s team with our best iOS and Android developers, testers, and PMs.
The key benefit that staff augmentation provided to SolarGaps was a significant acceleration of the mobile dev project kickoff thanks to our tech talent hiring and screening methodologies and access to closed and untapped developer communities in Ukraine. It allowed the startup to start collecting smart blinds pre-orders through AR visualization (that we created) long before the actual product was launched.
Tips For Successful Team Augmentation
Team augmentation for startups is increasingly becoming almost as popular as fully outsourced startup projects. Yet, to fully benefit from this collaboration model, it is important to stick to these essential guidelines:
Communicate your goals and needs clearly
Augmented staff mostly works remotely, so you should make sure that all communication channels are open between augmented staff and your in-house team members. Schedule regular meetings and make sure you’re on the same page as to your project’s progress regardless of geographic distance or time zone.
Define team roles
Open communication implies all roles and responsibilities within a project are clearly defined. New people will integrate easily into your team once they know who is responsible for any specific task or process.
Use communication and management tools
There are plenty of business tools out there for facilitating remote team management. Available on both free and subscription basis, tools like Jira, Asana, Slack, or Basecamp are great for communication and tracking your project status.
Document your code
Recording your code makes it easier to make changes and, subsequently, ensure effective product support and maintenance.
Using Agile methodologies enables you to be flexible and introduce changes to the project instantly, as soon as it is necessary.
Sign NDA (non-disclosure agreement)
This is only a reminder, but, just like with other collaboration models, augmented staff can be obliged to sign NDA agreements binding them not to disclose the sensitive and classified details of your project.
Partner with a reputable outsourcing company
Choose a trusted outsourcing provider with the proven expertise and portfolio of successfully executed projects. The outsourcing vendor should let you directly participate in the hiring process and personally interview prospective candidates.
Staff augmentation model offers startups a range of advantages, such as:
- Helping avoid recruiting and administrative hassle while enhancing your team with highly qualified tech talent,
- Retaining full control over the project resources while tapping into global talent pools,
- Building cross-cultural teams with robust expertise, which allows reducing development costs while ensuring better product quality.
Team augmentation model works best when your workload has increased, and you need additional resources to handle it, or when you’re looking for very sophisticated expertise to complete your startup projects. It may not suit your unique situation, however.
In some cases, going for full-fledged project outsourcing or setting up an offshore dedicated development team would be more beneficial from a business standpoint. If you’re not sure which collaboration model will bring the most value, get in touch and we’ll help you better understand a modern outsourcing path.