Value proposition for Start-ups

Start-ups have different needs than other organizations:

1. Low capital – would like to save as much as possible and therefore be very careful on spending, not that others wouldn't like to do that. But, Start-ups have to show student behaviour to judiciously utilize the scarce available funds.
2. High Risk – working on new ideas and not sure of execution, chances of success is less than 30%
3. Time is crucial and therefore results are expected quickly. Have to bring solutions to market before competition.

What could be the approach to enhance the chances of success - look for an outsource partner who can align processes and workforce to meet the start up challenges:
1. Provide young , enthusiastic, creative team trained on Agile processes – Scrum meetings, Xplanner, Iterative development methodology, extreme programming
2. Consider alternate commercial models other than pure T&M:

a. Invest part of payment into Start Up equity
b. Link 30% of payment to successful delivery/results
c. BOT model – Transfer of key resources after two years
d. Offer fixed price services like – performance tuning, testing

Provide additional services such as:
· Take on the burden of recruitment and resource management – supply resources at short notice and as well transition out at short notice of 2 to 3 weeks.
· Support in project execution through multiple reviews, identify bottlenecks/solutions to enhance the probability of Start Up success
· Take ownership of the solution, provide value added suggestions to ensure Start Up success
· Track productivity of each resource and ensure that desired value is added to the Start Up by each resource
· Enable the Start Up for success through process maturity – CMM certification, Information security certification
· Show patience in situations of delayed payment – work out innovative ways of receiving value for the work done.
· Deploy resources who have multiple Start Up experience

Effective Outsourced Service Agent can not only reduce the cost by 30% but also enhance the chances of Start-up success many times.

Graduating from Employees to Vendors

As the span of control increases managing productivity from large teams becomes difficult. External vendors with proven ability and specialisation deliver better value at this stage.

Due to long hiring cycle time IT industries maintain large pool of resources to meet the requirement of upcoming projects. These resources are either blocked for upcoming projects or buffers in existing projects or getting trained for future assignments.
Disconnect between skills available from project ramp downs and skills required for new projects leads low resource utilization.
If hiring speed can be enhanced from average 6 weeks to 3 weeks it would be possible to improve utilization levels by reducing the blocked and bench pool.
There is a need for specialized Vendors who can help shorten the hiring cycle by keeping tab on likely available resources in specific skills across industry.

Outsourcing of Recruitment function can improve the bottom line by 5 to 7%