Today’s work models are predominantly based on the 20th century models around staff augmentation. Organizations have forged global partnerships to overcome capability deficiencies, get access to resource skill sets and increase hiring agility to meet their requirements. With technology’s transition to cloud, mobile and social, new work models like crowd sourcing have emerged and the Staff Augmentation model is primed for disruption to outcome-based models.
Resource Based Partnerships
Partnerships based on Staff Augmentation models are quite simple in nature and easy to establish on the premise that service providers will augment staff for the skillset needed and the resources will be billed at an hourly rate until the requirement is met. The service provider’s primary responsibility is to provide a resource with the skillset needed. The organization engaging the service provider is responsible for the outcome and delivery.
This model is particularly attractive when global partnerships are established to also take advantage of labor arbitrage, resulting in significant cost savings.
Outcome Based Partnerships
Outcome based partnerships supplement the Staff Augmentation model by empowering the service provider to control the execution & delivery. The service provider in turn is responsible for delivering an outcome. Pricing is fixed and tied to SLA’s and delivery of the outcome. The benefits of labor arbitrage and access to skillset are ingrained in this model with global partnerships.
Outcome based partnerships will allow organizations to focus on customer success and user experience, by tying them as part of SLA’s that are mutually agreed upon
Disruption in Favor of Outcome Based Partnerships
The established models of staff augmentation are being disrupted with outcome-based models as organizations demand outcome from their partners. Emphasis on customer success and user experience will be the key drivers for this transition as technology moves to cloud, mobile and social. Automation will be critical in driving the adoption of outcome-based models. Service providers will have to evolve to support outcome-based models to stay relevant, and strong partnerships will play a key role in this transition.