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Differentiating Consulting Firms, Contractors, And Staff Augmentation

The need for IT services is growing faster than most companies can keep up with. With the requirements becoming significantly more complex, so does the reliance on outside help for the required knowledge and skills. But before you dip your toes into the outsourcing waters, how do you know which firm you have to call? Who can you rely on to deliver your needs exactly as you prefer them? The sad truth is that thousands of firms in this industry will claim to be technical experts on everything IT, so how can you determine which resources are actual professionals and which are plain wannabes?

The main models of outsourcing strategy at your disposal are: staff augmentation, contractors, and consulting firms. Read on to learn more about their differences in order to come up with the most cost-effective solution for your company.

1. Staff Augmentation

This delivery model is based on the idea of having a faceless, replaceable skill which is open for a whole department of contract workers (from administrators to programmers to engineers to website designers, and so on). Because IT depends a lot on a big pool of highly technical skill sets, these functions are significantly low-priced. Also, because candidates are required to possess only prerequisites under their chosen specialty (and zero capabilities on other skill sets), they are pretty much hired and released on demand. The current market prices will dictate what their rates are, which can range from an hourly wage of $35 to $95.

2. Contractors

These professionals are higher up in terms of value and capabilities. Typically, these are firms that deliver a whole package of systems or services aiming to solve a precise given problem. For instance, they can work on a specific operation, virtualized infrastructure, application, or network operation. Under a lot of cases, they deliver the solutions as an entire package that includes software and hardware, installation and utilities, testing, and configuration. This type of workforce can be paid for on either time-and-materials or per-project basis. Contractors also usually offer âbundledâ labor rates under given service packages ranging from $125 to $185 per hour.

3. Consulting Firms

IT consultants rest comfortably at the top of the skilled persons pyramid. They offer expert services with employees that go beyond usual staffing requirements. These employees have developed unique skills and have had comprehensive experience in the field. Additionally, they also commonly possess extensive understanding of related activities (project management, quality assurance, business operations, security, associated technology, and industry best practices, among others). Because of this, they are often sought out by companies for their comprehensive knowledge of operations that are critical to businesses, as well as being capable of tasks that have industry-changing effects. Because of the high level of these skills, they can command hourly rates of $225 to $450 (or higher, in some cases). It is true that consultants are the most expensive of the three, but it is arguable that the value they return to the company cannot be bought by an average wage rate.

The Verdict

It is clear that it is in the best interest of the company to identify these key differences, especially in the skill set and capabilities of the workforce under each category. However, in many scenarios, these titles are often interchanged tossed around loosely indiscriminately by many individuals and companies.

Unless you make sure that you hire the right persons youre looking for through background checks and a thorough interview you can make the seemingly innocent mistake of hiring a Senior IT Consultant at an $85 hourly rate (but really you hired someone from a staffing firm). This can escalate to other problems quickly: subpar performance, compromised production, missing out on deadlines and objectives, poor organization, and most of all â failure in the whole project.

Be sure to do your research and be 100% certain of your staffing decisions before handing out your entire projects fate on to the hands of outsourced help. If, otherwise, everything goes according to plan, then youâve got loads of work off your back and you can in turn enjoy the benefits of having contract workers do all the heavy lifting.