Originally published in FORBES
Remote work was relatively rare before the Covid-19 pandemic. Then, all at once, it was forced upon companies and workers across the globe.
As the pandemic waned, though, remote work hung around. Companies had become more comfortable with team members not being physically present in the same space and had realized the immense benefits of this new arrangement—both for the workers and the company.
As many sectors embraced remote work, this contributed to the growth of the nearshore outsourcing industry. I found this was especially true in IT, where more companies began to understand the transformative impact that nearshore outsourcing could have on their organizations.
In the last few years, nearshore and offshore providers have transformed traditional outsourcing talent models, in turn shifting the landscape of IT and software engineering. Some of these models involve completely remote teams, while others follow more of a distributed team format.
Here are some of the most common outsourcing talent models used today in IT and software engineering.
Staff Augmentation Staff augmentation is a hybrid model of outsourcing. In this model, companies supplement their in-house IT personnel by hiring outsourced IT specialists on a temporary basis. Many companies today use this model. It’s particularly useful if a company’s IT department possesses expertise in one area but lacks it in another area that is related or complementary. For example, a company's IT team may have excellent Android app developers but lack skilled Apple developers. Staff augmentation would involve this company hiring an outsourcing company to work on the development of the iOS version of the app.
The benefits of this model are that it allows the company to avoid the arduous process of recruiting, interviewing, hiring and onboarding new workers who are experienced in iOS development. This both saves money and helps to reduce the amount of time it takes for the new tech solution to go live.
Managed teams involve outsourcing entire IT projects outside the realm of your company. In this case, an outsourcing company would handle the entire scope of work for a project from start to finish.
Managed teams typically report directly to your company's CTO, project manager or another leader in your company. They don't usually work directly with members of your internal IT team.
Companies choose this model if a specific IT project requires skills that your team members don't possess or if a new project doesn’t fit the mold of other projects you normally take on. Managed teams are particularly useful if the skill set the project requires wouldn't be used again by your internal employees in the future.
Perhaps the most common outsourcing model is the project-based model, which involves turning over every aspect of IT or software development to an outsourcing company, which can be nearshore or offshore. That company then handles all stages of development—from planning to final release.
In this model, your company doesn’t have to hire any IT talent at all. That's why the project-based model is used by many companies that aren't directly in the technology sector. It allows them to save time, money and the potential headaches associated with creating an entire on-staff IT team.
Working with outsourced teams presents several challenges that require strategic solutions for effective collaboration and productivity. Two major hurdles include communication barriers and the establishment of realistic expectations, each with its unique set of complications.
First, effective communication is essential for successful collaboration but can be hindered by cultural differences. For example, in some countries, work is very hierarchical, and it’s not okay to ask your boss questions. This can lead to problems with U.S. teams because consultants won’t speak up when there’s an issue or question. Leaders can address this challenge by taking proactive measures, such as conducting training sessions for consultants on the importance of asking questions and fostering a culture of open communication. Education can help bridge the communication gap.
Second, ensuring that outsourced teams meet productivity expectations requires effective training and the establishment of clear key performance indicators (KPIs). You have to put in the time on the front end to make sure they are fully trained in your systems and processes and then set measurable KPIs that are regularly measured and assessed. It is important to provide constant feedback.
Finally, some companies want extra assurance that consultants are putting in the time they say they are since they are remote and far away. Remote monitoring software can be used to provide additional assurance regarding the consultants' work hours and productivity, especially when working with geographically dispersed teams. While this technology offers transparency, it can inadvertently foment a sense that consultants aren’t trustworthy. Therefore, striking a balance between accountability and trust is essential, ensuring that monitoring measures do not compromise the team's morale or autonomy.
Ultimately, the nearshore or offshore company's job is to deliver what you want, when you want it and exactly how you want it. This allows your company to focus on what it does best.