Experts agree it’s too soon to say what the mid-term effects of Brexit are going to be on the UK and European economy. Despite early signs of business and consumer confidence shrugging off doubts, we can surely all agree that we’re about to go into a period of major, structural change for the UK and the rest of Europe - which suggests the best response strategy business leaders can have is maximum flexibility.
Given the central role of technology-enabled business systems at both the back and front office side of all organisations these days - from the SME to the enterprise via the non-profit or the public sector body - that’s nowhere more true than in terms of IT resourcing. As the nuclear physicist Niels Bohr liked to joke, “Prediction is very hard, especially when it’s about the future,” and it is a brave CIO who can pinpoint the exact staff and skills he or she will need even in six months’ time.
That’s why the pragmatism embodied in an approach called ‘staff augmentation’ could pave the way for future rewards. Already popular prior to the Brexit shockwave, this is a way of allowing any IT team to temporarily up- or down-scale to best react and exploit continuous market changes.
The importance of transparency
In the past few years, we’ve seen some highly successful staff augmentation projects that have become models of best practice, however we’ve come across some disasters, too. In the light of both the positive and the negative, we’ve developed a solid to-do list to get the best possible staff augmentation relationship legally set up between you and any potential new partner.
The guiding principle is transparency. When you have a lack of hidden agendas and conditions, and everyone has all the information they need to make collaboration and joint decision-making really happen, you have the best basis for any kind of staff augmentation work, veterans of the process report.
In practical terms, this means the following. Finance has to have complete and full access to costs, relevant data and reports from partners. On the operational side, this means total insight (based on honest, regular communication) on how a partner’s future technology roadmap and strategy will impact the business and customers. For third-party suppliers, it means opening up the business to their clients by giving them access to systems and relevant information.
Cost is always the big issue, not just with staff augmentation but any outsourcing deal. A great staff augmentation SLA should be as transparent as possible, but the gold standard is to agree on an overall budget cap. This method is becoming increasingly popular, as it means the work scope can be very clearly delineated and both sides know exactly what they are committed to. Some businesses including ours offer a full-time equivalent (FTE) for each piece of work, to work out what amount of work one FTE can deliver based on clearly defined KPIs (from coding to server management, say), making it way easier for both sides. This approach also serves to control work flows and costs and stops work getting passed on from person to person unnecessarily, while protecting quality.
Avoid contract proliferation
Another great technique is to use KPIs to track employee activity against internal and project metrics. Please note, let’s have KPIs that actually work; only sign off on ones that will make a positive impact to your business!
We’ve also found that simplicity around commercials helps, too. We always try and advise avoiding too many paper contracts. Why? Because they invite confusion and can even promote the dreaded double-billing for work already done. It’s a lot better to have one umbrella agreement, a master contract with relevant (and clearly connected) sub-contracts. Statements of work to be done for each sub-contract, qualifications of the talent to deliver the service, and how all this relates to the KPIs can’t hurt, either.
A clear get-out clause is very sensible, too. If the relationship isn't working, you need to ensure you can exit the contract - and reflects the reality that it takes two to tango, and sometimes things just don’t work out. You can do this by putting a clause in that master agreement that all parties can stop cooperation under clearly defined conditions within a set time like three or six months, for example (depending on the scale of the anticipated work).
To conclude... Along with transparency as a guiding value in any staff augmentation project, the ideal contract for this highly flexible, useful way of working should show that this is a relationship that balances risk and reward for both parties.
Transparency from the vendor side should clearly sketch out your margins so the customer can see how you work as a business. I’d also try and put the work in to agree the parameters for the efficiencies and improvements needed - a definition of what both sides see as crossing the finish line, if you like.
Work along these lines, and you will get the sort of staff augmentation agreement you need - and which will help you weather whatever storms - and the sunny spells - Brexit will bring.