Cloud Staffing and IT Outsourcing
Evolution
2010

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Cloud staffing and IT outsourcing evolution
Cloud Staffing and IT Outsourcing Evolution
Today there are many talks about cloud computing. Supposedly it can give a new
effective way to satisfy needs in hardware and software products and IT services.
But what about IT personnel? Can the cloud model be expanded to... cloud staffing?
If yes, what about such notions as 'nearshore/offshore dedicated team' or
'outsourcing software development' - are they obsolete?
The term 'cloud staffing' is reasonable because IT outsourcing constantly evolves.
And new notions reflect a new level of its maturity and hands-on experience gained
by both customers and providers, as well as indicate possible ways of the IT out-
sourcing further growth.

IT Outsourcing - Steps to Clouds
About 20 years ago outsourcing was a tool with the help of which multinational
companies tried to reduce overhead costs. It was time of mega-deals with long-
lasting contracts and India as a main offshore location. It was a thing for "large
dogs" only.

However, even for the multinationals there were some problems managing offshore
projects. Remoteness, lack of openness and transparency in relations between a
customer and service provider, cultural barriers could bring to nothing all potential
savings and benefits. No wonder that there gradually appeared:
" Captive centers built by US and European companies in outsourcing desti-
nations
• Western companies-intermediaries that cooperated with a bunch of
proven outsourcing providers - as a result, end customers have no deal with
offshore personnel
• Representatives of offshore companies (Do you remember all those ads
and letters like "A BBB-based software development company requires a rep-
resentative in the USA"?)

A step to make IT outsourcing affordable for small businesses and even individuals
were online freelancer auctions and talent marketplaces. Among employers
there can be met both blue chip companies that try to find "fresh blood" for their
providers pool, and students who need assistance in their homework. However
virtual worker marketplaces has their own pitfalls too: sometimes it is difficult to re-
size the project team, etc.

In order to decrease outsourcing risks companies tried out a number of different co-
operation and managerial models:
• Multisourcing - Its motto was "Don't put all eggs in one basket". The idea of
multisourcing was to mitigate outsourcing risks distributing different parts of
projects among several providers: e.g., one of them develops software, an-
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Cloud staffing and IT outsourcing evolution
other one provides independent testing. As a side effect, multisourcing has
stimulated interest to nearshoring and such outsourcing locations as Latin
America and Eastern Europe (Romania, Poland, Ukraine, etc.
• Acquisition or establishment of companies in the USA or EU by outsourc-
ing firms, hiring both local and offshore/nearshore staff. Their aims are: to be
closer to customers, to eliminate the cultural barriers, to transfer and use the
best managerial and production practices.
• Dedicated client's teams - A remote (nearshore or offshore) devel-
opers team entirely dipped and strictly following customer's project
philosophy. It can be especially efficient when utilizing the Agile soft-
ware development methodology (see also the article "Agile dedicated
teams, or How to make outsourcing software development more reli-
able").
And now a new wave -

• Cloud staffing - Its motto is "Flexibility, Scalability, and Effectiveness". It is a
synergy of the best outsourcing practices and software development method-
ologies along with the power of the up-to-date Web-based communication
and collaborative work technologies.
Features of Cloud Staffing
Cloud computing reduces hardware/software to a thin client on a web-connected
laptop (or even smartphone) against mainframe computers, data centers and com-
plex applications hidden in the cloud.
1. Cloud staffing means thin HR
- Pure manpower for clients, all the troubles about personnel hiring, retention, and
firing are inside the staff cloud.
2. Cloud staffing means no administrative fuss for customers
- Vacations, taxes, and so forth - this all is in the cloud and maintained by the
service provider.
3. Staff clouds are scalable
- Human resources can be scaled up and down rapidly.
4. Staff clouds are transparent
- All people are selected and interviewed by clients. The clients can choose best-of-
breed IT specialists: programmers, testers, etc. They will be managed by the
customer, share their development methodology and collaborative work tools
(project management, development, testing, telecommunication channels and
tools).
5. Clouds are acceptable
- Not only for large businesses but rather for SME, start-ups, and even individuals.
6. Clouds are firm
- They have reliable legal background: flexible contract documents, guarantees of IP
right protection, money back guarantees and other rights.
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Cloud staffing and IT outsourcing evolution
7. Cloud staffing is a new but mature form of IT outsourcing
- Behind the clouds there is a new generation of managers and developers who
know countries they work with, understand their cultural and business specificity,
and have a hands-on experience in working in remote teams.
Cloud computing is a sound solution in our tough competitive world when deals
should be made quickly and without excessive red-tape retards. Comparing with
conventional IT outsourcing, a more mature approach of cloud staffing allows
customers
• To avoid time and expense on building infrastructure, thereby increasing
business responsiveness and faster time to market
• To acquire more sophisticated business processes or services, thereby rear-
ranging capital investments to allocate to another business areas
• To scale up and down a team, thereby staying flexible and vibrant to the
market situation by growing business efficiency without giving away the con-
trol over the business.


About the Author
Dmitriy Kharchenko is the CBDO of Acceptic Ltd (acceptic.com), a Ukrainian soft-
ware development company. Acceptic provides custom Web application develop-
ment, .NET programming, cross-platform C++ programming, as well as Dedicated
development teams for companies from the USA, Europe, and Australia.
All copyrights and trademarks mentioned in this article are owned by their respective owners.
This article may be distributed without limitation provided the content stays intact, and the
information about the author is attached and NOT CHANGED (including all links).
The article address in the Internet:
ht
tp://www.acceptic.com/articles-and-reviews/cloud-staffing-and-it-outsourcing-evolution.htm l
Keywords:
dedicated development teams,
outsourcing software development, Agile
Categories:
IT outsourcing
Dedicated teams
Cloud staffing
Agile methodology
2010 © Acceptic Ltd
www.acceptic.com
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