What is Staff Augmentation? Definition and resource – expanding the team in IT 

It is often believed that staff augmentation is a simple matter – you just need to hire more people. Nothing could be further from the truth. This process requires a well-thought-out strategy, change management and appropriate resources. Staff augmentation is an outsourcing solution that provides both key benefits and pitfalls that may arise on the way to success. So, how do you effectively increase the number of employees in the IT department, and what resources are worth using? How to manage the changes that IT team augmentation brings?

What is staff augmentation?

Is there a general definition of staff augmentation? Staff augmentation is a practice in which a company or institution uses external specialists or employees to complement and strengthen its existing team. This approach is typically used in the context of IT projects, but can be applied to various industries and areas of activity. At the same time, it’s an activity that lasts for a specific time – a quarter, half a year, or even a few years. “Staff augmentation” is used interchangeably with “team augmentation”.

Managers in the financial industry often decide to expand the team through staff augmentation. For them, it’s a flexible solution to specific problems that can bring many benefits to the company, especially in a dynamic and competitive business environment. The key to success here is the appropriate selection of external employees to the specific current needs of the financial organization or a particular project, and their effective management. It is, therefore, necessary to carefully examine the requirements and assumptions of the project and find experts to fill the gaps in the team’s skills.

The definition of staff augmentation emphasizes that it’s a process aimed at quickly adapting to the changing needs of the enterprise and, more importantly, it’s possible at every stage of software development. It allows the company to respond flexibly to changing market conditions, design requirements or seasonal work peaks. This makes it easy to adjust the number and skills of employees to their current needs without a time-consuming and expensive recruitment process. Hence, you should carefully review the requirements and assumptions of the project and find an expert who specializes in what you need.

IT staff augmentation in the financial industry

Banking systems are not always based on progressive yet flexible and intuitive software solutions. To keep up with the changing market, companies in the financial industry must implement modern concepts that improve their processes. One of them is staff augmentation.

According to the Statista report, by the end of 2027, revenues in the software sector are expected to grow to about $800 billion¹ – including those generated in the area of finance. Moreover, according to data from Deloitte, more than 51% of companies operating in the financial industry in the United States already use outsourcing.² These data perfectly show that staff augmentation projects already have a significant impact on shaping global businesses. And their importance will increase every year.

Due to the specificity of the financial industry, stricter legal regulations and security rules, it’s a particularly demanding and “sensitive” process in this industry. Thus, it’s a good practice to cooperate with an IT service provider specializing in the financial sector that is perfectly familiar with the applicable and introduced regulations and has its own procedures to meet these high requirements.

The importance of staff augmentation

IT team augmentation means not only an increase in the number of employees but, above all, an investment in the company’s development. As a result, it’s possible to implement more projects and respond faster and more effectively to possible challenges. The ability to innovate is also significantly increasing, which is extremely important in the dynamically changing world of technology.

However, the decision to augment the IT team is not easy. It requires some thought and proper planning. A staff augmentation project involves not only the costs of paying additional employees but also training and adaptation to the new workplace. Nevertheless, investing in this process pays off in terms of increased productivity. In addition, the best IT companies providing their services in this model have their own procedures and developed ways of doing things, which allow them to implement their employees in client-side projects exceptionally quickly.

A greater diversity of skills and experience is also an important aspect that can contribute to better understanding and solving of problems. Furthermore, such team expansion means preeminent opportunities for networking and building business relations, which can bring additional benefits to the enterprise.

Staff augmentation and other forms of outsourcing – differences

Staff augmentation and “classic” outsourcing are two different approaches to human resource management in a company.

The main difference between IT team augmentation and classic outsourcing is the level of control and responsibility. In the case of staff augmentation, the company maintains control over its processes and supervises employees. In contrast, in typical outsourcing, certain tasks or processes are delegated to external service providers who take greater responsibility for their performance.

Also, noteworthy is the fact that in the case of staff augmentation, external employees who are hired for a specific period fill in gaps in the company’s team or provide particular skills or expertise. They are treated as additional personnel of the company. In the classic outsourcing model, the company often reduces internal staff or transfers it to other activities, while the external company assumes responsibility for specific tasks.

Staff augmentation – who is it for?

Staff augmentation will suit your business if:

• You have a solid background

Finance is an industry in which not only IT skills count, but also specialist knowledge and experience related to procedures or regulations in a sensitive and dynamically developing market. For the increase in resource and staff augmentation to be effective, it’s necessary to involve a team with in-depth financial knowledge, ready to work together. The foundation of efficient management and staff augmentation efficiency also includes the presence of a CTO or PM who can manage a team of highly qualified specialists in software solutions and banking technologies.

• You need to quickly expand your team with qualified specialists

In the financial sector, changes come suddenly and often depend on the economic situation of global markets or constantly introduced innovations. Therefore, companies in the banking sector often struggle to introduce immediate changes and improve processes that are losing effectiveness. At such moments, it’s difficult to talk about traditional recruitment, which not only takes time but doesn’t always work well for specialized qualifications. In the staff augmentation model, you can be sure that you will quickly fill the gaps and establish cooperation with specialists with the experience and knowledge necessary to conduct projects, for example, in artificial intelligence (AI), Machine Learning (ML) or cloud technology.

• You want to become a leader in financial solutions

It is not without reason that the staff augmentation model is developing with such dynamics in the financial industry. Banks and other financial organizations that want to be competitive must focus not only on modern technological solutions, but also continuously improve the way they run their projects. The financial industry is a challenging environment in which only the best can succeed – that is why it’s so important to have a team of experienced experts. With staff augmentation, you can flexibly use high-class specialists and a proven composition of specific competencies to enhance the quality of your projects.

Change management and IT team augmentation

The change management process is crucial when it comes to expanding the IT staff. It requires proper planning, effective communication, and support for new team members. Tip sheets, or checklists with tips and advice, are invaluable in this process. They help new employees quickly understand their tasks and expectations, speeding up their team integration.

Monitoring progress and adapting strategies continuously is also an essential element of change management. Regardless of whether the IT team is expanded by one or several people, making the process smooth and effective is a game-changer. For this aim, it’s worth using project management tools to help you track progress and identify possible problems early.

IT staff augmentation – mistakes

Without proper planning and strategy, expanding the IT team can lead to several problems, which can be quickly eliminated with the support of our experts. The most common mistake is the lack of a clearly defined role for new team members. This can lead to misunderstandings and conflicts. The result may also be hiring too many new employees, which translates into issues with planning the work so that everyone has something to do!

Another common mistake is neglecting the onboarding process. New team members must be properly introduced to existing projects and procedures. The importance of communication must not be forgotten. Without effective communication, staff augmentation can lead to chaos and inefficiency.

Despite the potential challenges associated with the process, staff augmentation remains an attractive solution. Especially when a company needs flexible access to specialized skills or wants to respond to changing project needs. The key to success in increasing the staff is careful management, assessment of costs and benefits and selection of appropriate service providers, where staff augmentation is one of the available models of cooperation (effective in the development of financial technology services).

Staff augmentation in the financial industry – advantages

The financial sector perfectly understands the importance of project efficiency combined with cost optimization offered by staff/team augmentation. According to the PwC report³, many financial institutions have struggled with inefficient technological solutions that have not been modernized in several years. In this way, these companies are not able to operate competitively. This is not only the lack of simplification in customer service or business transaction handling but also increased costs and systemic innovation blocks. Nowadays, one of the most effective ways to modernize processes and introduce modern products quickly in the field of finance and banking is to use the staff augmentation model in IT. Thanks to this, it’s possible to efficiently create new services in the field of web and mobile apps as well as in-house systems and to increase productivity and efficiency.

The advantages of expanding IT teams through staff augmentation in the financial sector include:

• reduction of recruitment costs and elimination of recruitment risk,
• effective strengthening of the data architecture,
• modern analytical solutions enabling immediate reactions to market changes,
• reduction of training costs,
• access to expert opinions made not only based on external data but also those within specific teams,
• an industry perspective of our IT specialists, which allows us to use solutions that work well even in the most challenging implementations,
• flexibility of employment adjusted to real project needs.

Staff augmentation in IT – examples

Observing the dynamic development of technology, the importance of an effective staff augmentation model in IT cannot be overlooked. An example of this is the global giant – Google. The company, known for its innovation and continuous pursuit of excellence, has successfully applied its staff augmentation strategy. Thanks to this, the Google IT team can meet the growing market demands and constantly develop its products.

For one of the large universal banks, Ailleron has built a team of more than 20 IT engineers and experts from many fields (analysts, architects, UX experts, UI designers, testers, Java, .net, Angular programmers…), whose task was to create and develop a modern platform responsible for handling loan applications for corporate and SME customers and post-sales monitoring of the credit portfolio. The project implementation takes place in agile methodologies in the staff augmentation model, and #AilleronExperts support several squads. Thanks to our cooperation, the Bank retains the flexibility of cyclical exchange of roles in the contracted team and the control of the quality of work delivered by our staff by participating in interviews with recommended candidates.

As you can see, scaling IT teams is not just a matter of increasing the number of employees. It’s primarily the ability to manage human resources so that they can effectively use their potential. Thanks to this, IT teams can work on various projects effectively while maintaining high quality and efficiency of work, which is crucial for the company to stay on the market.

A staff augmentation project is a complex process that requires not only the right resources but also the ability to manage them. Success in this field is a combination of strategy, planning and effective human resource management. The example above shows that a properly conducted process of enlarging the IT team can bring significant benefits for both companies and institutions.

How does staff augmentation work at Ailleron?

At Ailleron, we know how to manage and create solutions for companies in the financial sector. Many years of experience and knowledge of our programmers, gained in the banking and financial industry, allow us to offer our clients comprehensive know-how, thanks to which it is possible to implement and optimize digital transformation in the end-to-end model.

Staff augmentation with Ailleron is a solution dedicated to:

• retail banking,
• corporate banking,
• FinTech,
• insurance,
• leasing,
• start-ups.

We carry out staff augmentation projects with the support of some of the best programmers in the world, operating with a wide range of technologies, including the most innovative ones, such as Generative AI, Machine Learning, data science and cloud solutions. We specialize in long-term projects, which we scale according to the needs of both the client and the market. Our expertise and analyses in the financial sector allow us to meet the expectations of companies and end users and create solutions tailored to their needs.

FAQ:

1. Is staff augmentation in IT always beneficial for the company?

Staff augmentation in IT can bring many benefits, such as increasing productivity and efficiency of work. The decision to augment the team should be well-thought-out and based on a reliable analysis of the company’s needs. Sometimes, using external services or automating certain processes may be better.

2. What are the biggest challenges of augmenting the IT team in the financial industry?

The biggest challenges related to augmenting the IT team in terms of projects from the financial industry are:

• finding specialists with comprehensive knowledge not only of IT but also of banking and electronic finance solutions,
• establishing cooperation with a company with experience in providing services in the staff augmentation model in the financial sector.

3. What is the difference between outsourcing and staff augmentation?

Outsourcing in the classic form means delegating a project to an external company and giving it control over the work, while staff augmentation is based on starting cooperation with external talents inside the company, so that control is on the customer’s side.

Sources:

1. Global Software Market Revenue 2016-2027 by Segment | Statistics (statista.com) [access: 12.11.2023] ↩
2. Deloitte Global Outsourcing Survey 2022 | Navigating talent, technology, and new ways to outsourcing [access: 12.11.2023 on the Global Outsourcing Survey 2022 website | Deloitte Poland] ↩
3. sektor-finansowy-coraz-bardziej-fintech-raport-pwc.pdf [access: 12.11.2023] ↩

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