How Staff Augmentation Can Help You Control Project Costs

If you manage an IT staff, you know fluctuating workloads can be hard to support. Most IT organizations staff for minimum ongoing needs, and periods of high demand can stretch your people beyond their ability to deliver.

When a large project outstrips your ability to service it, you have a range of choices to meet the need.

• Hire more people. If you have a need for permanent staff, hiring is a practical choice. You can control costs and hire individuals who fit your organizational culture.
• Contract managed services. For a long-term need, this can be a cost-effective option. You can predict costs and realize the value of economies of scale a company with a large client base can offer.
• Outsource to a consulting firm. If you have a short-term need such as a human capital management implementation, a consulting partner can work best. If you do not have experience with the technology, you can work side by side with the consulting partner to gain expertise over time.
• Supplement your staff with contractors, independent consultants, or an augmentation service. Each of these options has benefits and drawbacks.

Contractors and independent consultants often work on a time and materials basis. That may be the best way to work if you are uncertain what your needs will be over the life of the project. However, if you can accurately estimate the effort required, a fixed fee contract can lower your costs.^[1]

An augmentation service is the best choice if you want to avoid a long search for the right skills, control your costs, and scale contracted services as your needs change.

Augmentation Pros and Cons

Augmentation has distinct advantages over other limited time engagements, but it also has disadvantages.

Benefits of Augmentation

• Avoid recruiting and separation costs
• Contract for specific skills
• Avoid violating headcount policies
• Quicker ramp-up
• Flexibility and scalability

Simple cost model

Disadvantages of Augmentation

• Higher cost over a long project
• Commitment is to provide time, not service
• Low control
• Knowledge leaves with the person

Controlling Augmentation Costs

Managed services providers are becoming more common as more companies contract with them to share the cost of IT support. When you use managed services along with augmentation, you can reduce IT staffing costs without losing the ability to handle your needs. We can imagine a future CIO operating as a single-person department, managing an ever-changing mix of managed services and augmentation services.

Control your expenses with careful planning and oversight. Use these three tips to control your staffing costs.

• Take the time to assess your needs so you can contract only for the services you need.
• Define each role carefully to help your provider find the right match and avoid over-staffing.
• Don’t pay for expertise you don’t need, but don’t settle for less than the job requires.

Staff augmentation can be an effective way to control costs, but it takes careful planning. Take the time to find the right provider. A staffing firm that only gives you a database to search for will not be a good partner. Seek a company that takes a proactive approach to meeting your needs and is willing to commit to service levels.

References:

1. Overby, Stephanie. "4 Ways to Cut Application Development and Maintenance Costs." CIO. July 24, 2015. Accessed November 01, 2016.

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