Staff augmentation

Staff augmentation is the process of hiring a dedicated team of additional staff to bring better efficiency and effectiveness in the work process. The system takes the wing as more and more companies are growing with their increasing needs. The element of staff augmentation can be visible across every department to achieve incompetence and unmatched standard of working. Normally, it is seen that human resources and sales wings of a corporation is likely to get the first advantage of staff augmentation. However, the necessity of this process cannot be denied in other areas of working too as it could leads to better management for the organization. This is reason why, IT staff augmentation remains one of the most demanding and vigorous marketplaces in the world. There are many reasons for which we will require the process of staff augmentation. Firstly, the abundance of IT resources needs enough manpower to handle. Secondly, declining rates and narrowing margins for companies that require these services. And finally, it leads to specialization in the work. IT staff augmentation allows a company to add staff as needed. A company may easily ramp up and down to meet changing demand without shouldering the cost and liabilities of full time employees.

Pros

• Control over staff: When there is a need to closely manage resources, staff augmentation is ideal.
• Integration with internal processes: Companies can find it more effective to integrate staff augmentation resources with existing business processes than to align those processes with external project teams.
• Leverages existing resources: By adding new skill sets to the team, a company can take advantage of both external and internal resources for the completion of their IT projects.
• Specialist expertise: When project team gaps mainly consist of specialized skills, staff augmentation can efficiently fill those gaps.
• Rapidly changing staffing needs: Companies with staffing needs in constant flux can meet those needs through staff augmentation. It’s relatively easy to add/subtract resources to match demand.
• Reduce cost of acquiring skills: Avoids the cost of investing in internal skill development.
• Reduce employer burdens: Avoids costs and liabilities of direct employees.
• Meet aggressive project timelines: When an active project has a need for more resources in order to be completed on time, staff augmentation is typically the best option, and often times the only option.
• Internal acceptance: Existing employees often times embrace a staff augmentation model more than a project outsourcing model. Existing employees are less likely to feel threatened by augmenting staff with a few individuals than by outsourcing entire projects.
• Ease of adoption: It’s easier to adopt a staff augmentation model than a project outsourcing model. Companies are already used to hiring employees. Staff augmentation is just a small shift from what companies already do.

There is an increasing drive to reduce costs and improve operational efficiencies through technological innovation. This naturally translates into a growing number of IT projects, where success or failure of a business can often hinge on the ability to complete these projects on time, within budget, and to specification. Developing in house capabilities to complete these projects can be a costly and risky venture, particularly when the IT needs of an organization are constantly changing. Moreover, in today’s business world where falling behind the curve of IT innovation can lead to disaster, very few companies have static IT needs.  Even companies who are content with IT business as usual can easily find themselves relying on outdated legacy systems which, upon failure, could cripple a business.

IT as a Business

IT no longer supports the business but, it powers the business. The postdigital era should be great news for IT – a chance to expand their scope of services and reinvent their brand as the business. But the conventional IT process and stems won’t allow IT organizations to effectively deliver on the changing demands of the business.For many companies, running IT like a business requires a new vision. It means advancing the business and enabling meaningful change. And it often requires understanding a new set of basics that:

• It Identifies the opportunities to optimize costs
• Helps in enhancement of operational effectiveness
• Provides innovative ideas for profitable growth in the industry

 

Most organizations see IT as a cost center, which they operate without a sense of what goes into the cost. There also tends to be a “one-size-fits-all” approach to providing products and services, which isn’t the most cost-effective way to provide technology services. To avoid these pitfalls, many companies nowadays, offer a menu of options with a clear price for each product or service. By doing this they are not only  supporting the business but also to enhancing the bottom line by helping  the business leaders make informed decisions on the deployment of technology.So, for example, one of the company providing   “products” is e-mail. They offer a choice of mailbox size, which vary in cost, and they decide which option works best for their business unit or geography. Technical support is another example—the cost depends on whether the user chooses Internet self-service, a call to the Help Desk or a visit by the local office team. Hence , the main goal is should enable company owners to take good decisions, drive optimum service levels and encourage more productive and cost-effective behavior, like steering more people toward self-service.

Today, running IT as a business means:

• control of IT’s cost structure and making that cost structure fully transparent to business stakeholders
• running an efficient and effective IT “plant” by managing  IT costs and services to take maximum advantage of scale, vendor partnerships and new technologies                              (e.g. virtualization)
• Specifying, managing and delivering IT projects with predictable cost, delivery time and the expected functionality. High performance IT organizations do this through well-selected vendor partnerships
• Bringing new technologies to bear in the IT plant and to delivery it as soon as the technologies can deliver on their promises.

Thus, running IT as a business in these dimensions earns a seat at the business leadership table, and the trust of business stakeholders.

 

The Information Technology Infrastructure Library, or ITIL, is a set of recommendations used by companies to help structure how IT supports business.

An IT department run according to ITIL should create a precise map that links IT resources to business operations. IT should be run as a business not with the intention of making a profit but of providing accurate prices. But in most ITIL implementations, this crucial step is not taken.“A lot of CIOs don’t want to risk this kind of exposure”.

They don’t want to take the risk of their predictions being inaccurate. So they oftentimes are not willing to have a system which is so transparent to the users and also to C-level executives.

When implementing ITIL, IT departments get bogged down with service support functions such as the service desk, problem management, change management. The business-to-IT financial map is lost.

Of course, it is hard to run IT as a business. It takes work and deep understanding to map all the transactions, marketing and other activities to the IT resources they consume. For instance, a company building a new Web site may launch a marketing campaign that dramatically increases transaction volume. If the company made good use of the CMDB to map components in applications to the servers that deploy them, the demand management model in ITIL could project the amount of IT required to support increased transaction volume from the new marketing campaign.

The lack of understanding of how IT impacts business makes IT vulnerable. IT departments are going to have to make a prediction about prices, even if they turn out to be wrong. Perhaps the biggest challenge is to understand the link between IT and business activity. This is where IT departments are weakest. Another factor is the fear of scrutiny. When you first create a demand management model, inefficiencies often surface. A thorough analysis of IT costs and their relevance almost always gives rise to some serious problems.

Hence, implementing ITIL properly is a major change. But finishing the job and completely implementing ITIL in a way closes the loop between business value and IT which is a big win.

Lastly, we can say that using IT as a BUSINESS from being only used for “Managing projects” can be achieved by Standardization, consolidation, virtualization and automation. By doing this a company can transform itself from being “Budget driven” to “Value driven”.

 

Contract Review

A contract is a document that creates a legally binding commitment, and includes letters of intent and memoranda of agreement.

Contracts and proposals are revised every year. Vendors introduce new pricing, licensing models, maintenance options and audit clauses every day.

The best contracts are the ones in which they specify time periods, dates, payment logistics, major and minor responsibilities, and define all subjective terms in detail. Add detail to every sentence so there is no room for a different interpretation. Each and every term discussed and orally agreed upon between the parties should be in writing.

Contract review provides the company with a decision as to whether or not to agree upon all the requirements mentioned in the contract. They requirements can be negotiated during contract review. Contract review provides an opportunity to ascertain that all the decisions finalized and also the payment structure is proper.

Vendor Selection Process – By Shailesh Nambiar

Analyzing the business requirements:

The first step is to assign a team who will be working on the project. Definition of the product is an important step while analyzing the business requirements. It is also essential to understand the business and technical requirements of the vendor and then document the requirement for approval.

Searching for vendor:

Compile a List of Possible Vendors according to the business requirement. Select Vendors to Request More Information From. RFI helps you create a Request for Information document, by listing all of the information that suppliers need to give to you, to tell you about their business.

RFP and RFQ:

The RFP or RFQ should have the following sections such as Submission Detail, Introduction and Executive Summary, Business Overview & Background, Detailed Specifications Assumptions & Constraints, Terms and Conditions.

Proposal evaluation and Vendor selection:

Preliminary Review is done of all the vendor proposals. The business and client requirement are recorded and on that basis priority is assigned and accordingly the vendor is selected.

Contract Negotiation:

The contract negotiation handles issues such as cost, timeframe, and whether there are any special considerations to take into account. We should know the difference between what you need and what you want and define if there are any time constraints and benchmarks.  Assess Potential Liabilities and Risks.

By Shailesh Nambiar

(A Sourcing Guru since May 2011)