At present the companies from different industries consider the most efficient methods of cutting the costs, making the entire workflow more productive and time-effective.
92% of G2000 companies rely on IT outsourcing, and modern workflow organization is increasingly centered around automation and upskilling to keep pace with technological advancements..
By outsourcing certain tasks, companies can focus on their core business functions, thereby improving efficiency and facilitating better resource allocation.
To achieve that, organizations usually consider various options of outsourcing engagement models, such as strategic sourcing, co-sourcing, staff augmentation, or even outsourcing. For IT outsourcing, the last two methods are considered to be the most popular methods, but which one is more efficient for the tech companies?
What is Staff Augmentation?
The global business process outsourcing market size is anticipated to reach USD 525.23 billion by 2030, growing at a CAGR of 9.6% from 2024 to 2030, according to a new study by Grand View Research Inc.
This factor, as well as the high demand for professional developers, makes IT outsourcing more and more attractive for global organizations to employ. One of these models is staff augmentation.
According to the PwC, staff augmentation is the temporary outsourcing engagement model that helps to depute internal audit staff during the temporary resource crunch. As a rule, companies involve the new employees for an estimated period of time without any long-term promises.
The main benefit of staff augmentation for the companies to get is winning some more time for picking a more experienced replacement by out-tasking the company’s projects to the temporary workers. Additionally, it allows companies to integrate external experts into their existing teams, enhancing operational efficiency while maintaining oversight and aligning with the company's values.
What Is Outsourcing?
Unlike the previous type of outsourcing engagement, after involving the staff augmentation model, the company starts gradually transforming to the main outsourcing model.
In fact, that is the model based on the managed services and can manage an entire project from start to finish, providing more flexibility and skillful developers for the organizations than the IT staff augmentation.
Besides, this type can provide the companies with a more effective solution for reducing the expenses with getting the same performance quality and even more volume of the work done. Selecting a reliable outsourcing company is crucial to ensure the success of this model.
In this case, the service provider will offer the company a certain outcome for a defined price. Whereas the organization has to define the list of requirements on these services and performance criteria points. Project management plays a vital role in ensuring these outcomes are met successfully.
Staff Augmentation VS Project Outsourcing - the Main Difference
To see the actual strong and weak points of each option, let’s compare the pros and cons of outsourcing models. So, staff augmentation VS outsourcing — which one is best?
Control and Management
Outsourcing delegates control to an external team, which can lead to concerns about managing the quality and progress of the work. However, this external team often brings specialized knowledge and can enhance the security of intellectual property.
Cost Implications
The drawbacks of hiring full time employees include the associated overhead costs, such as salaries and benefits. In contrast, staff augmentation can be more cost-effective, allowing companies to scale their workforce based on project needs without long-term financial commitments.
Flexibility and Scalability
Outsourcing services provide access to diverse skills and resources, making it easier to scale operations up or down based on project requirements. This flexibility is particularly beneficial for companies facing fluctuating workloads or needing specialized expertise for specific tasks.
Expertise and Specialization
Staff augmentation grants access to specialized expertise, which can be crucial for complex projects where in-house capabilities may fall short. This approach not only fills skill gaps but also facilitates effective knowledge transfer, enhancing overall organizational capabilities.
Control and Management
Control and management are crucial aspects of any project, and both staff augmentation and outsourcing have different approaches to these aspects. With staff augmentation, businesses maintain direct control over the augmented staff, integrating them seamlessly into the existing team. This enables close collaboration and oversight by the company’s management, ensuring alignment with organizational goals. In contrast, outsourcing delegates control and management oversight to external entities, which may lead to a loss of control over project outcomes.
Flexibility and Scalability
Staff augmentation offers high flexibility, allowing businesses to adjust team size dynamically. This is advantageous for projects with variable workloads, enabling swift onboarding of skilled professionals without long-term commitments. Outsourcing’s flexibility depends on contract specifics, potentially limiting rapid adjustments. However, outsourcing provides access to diverse skills, and contractual terms may constrain scope changes without renegotiation.
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Staff augmentation typically involves a straightforward cost structure, where companies pay for the services of the augmented staff based on their hours worked or a fixed contract rate. Outsourcing often presents a more consolidated cost structure, where companies pay a predetermined fee for the completion of a project or a set of tasks. Outsourcing can lead to significant cost savings due to the outsourcing partner’s economies of scale, specialization, and the potential for lower labor costs in different geographical regions.
Integration with Company Culture
With staff augmentation, professionals are temporarily brought into the existing team, allowing for closer collaboration and direct interaction with the company’s core members. This proximity and day-to-day engagement facilitate a smoother assimilation of the company’s culture, ethos, and working methodologies. Augmented staff, working alongside permanent employees, are more likely to understand and adopt the company’s values and behavioral norms, fostering a cohesive and harmonious work environment.
Expertise and Specialization
Staff augmentation grants companies access to a broad pool of specialized talents on an as-needed basis. This model is particularly advantageous when a project requires specific skills that are not present within the current team. Through staff augmentation, companies can selectively integrate experts into their teams for the duration of a project or a particular phase, ensuring that specialized knowledge is directly applied where it’s most needed.
Time to Market
Staff augmentation typically offers faster project development and market entry due to the immediate availability of skilled professionals. Companies can swiftly onboard augmented staff to address skill gaps or meet project demands, minimizing recruitment delays and accelerating project timelines. Outsourcing may require more time upfront for vendor selection, contract negotiation, and onboarding processes. However, once initiated, outsourcing can lead to expedited project development and market entry by leveraging the expertise and resources of the outsourcing partner.
Benefits of IT Staff Augmentation with Specialized Expertise
Staff augmentation is the best option for your company if you want to:
Put all the risks for the work done on your organization (the client);
Vest all the knowledge and important information in the individual (without any documentation);
Require limited out-tasking and work on the projects on a short-term basis;
Pay for the hours worked and the project’s availability;
Have to be responsible for the service delivery model, the process organization, and working tools;
Need to quickly fill the in-house temporary resource crunch;
Implement the supplemental staff to the direct interaction with your in-house team, with dividing all the tasks within one team.
As you can see, the staff augmentation model is supposed to be implemented directly to your company’s permanent workforce to provide them with additional assistance on the short-term projects when you have to quickly resolve the lack of labor or find a temporary solution until you find the right candidate for hire. This approach can significantly enhance your in-house teams by integrating specialized expertise, particularly in areas like data analytics, allowing for flexible responses to shifting project demands.
Benefits of Outsourcing Services
However, a great number of companies still prefer getting the permanent option for employee sourcing. That is why, we should also check the main benefits of another type — managed services model (or as it is also called — outsourcing).
Here are the main benefits of outsourcing:
All the risks for the workflow performance and results transferring are put on the outsourced team;
Different knowledge is documented and can be easily transferred by outsourcing partners;
Provider is responsible for the service delivery, and some of the entire projects can be transmitted for completion;
Work is paid according to the service type and volumes of the tasks;
The provider gets control of all the processes of the execution component of IT, ensuring project success;
The provider manages the service delivery model using specialized skills, internal processes, and tools.
In general, this model is more suitable for project outsourcing, when the company needs the work to be completed from scratch.
Furthermore, it is mostly employed by organizations that require constant task performance and don’t plan to find better candidates later.
How to Choose the Best Option?
Thus, after comparing staff augmentation vs outsourcing, it’s time to answer the question: which one is your choice?
In fact, both models can be utilized for getting the most of the employee outsourcing. The core factor is the basic needs and targets of the company: if you’re waiting for the outcome of your outsourcing process then the project outsourcing model, which involves delegating entire projects to external experts, will fit the bill.
However, if you’re looking for temporary additional input to your company’s existing team until you find the appropriate candidate for the permanent basis then it will be more rational to consider the staff augmentation.
Conclusion
To sum up, both staff augmentation and outsourcing can be the winning solution for IT outsourcing. Leveraging specialized skills can enhance project success by covering the resource crunch for different terms, which plays a critical role in the company’s final choice.
And, after the detailed comparison of the staff augmentation vs outsourcing, it becomes quite clear that the first one provides an input to the customer, while the second one delivers an outcome.
No matter which one you’ve decided to choose for your company, the key to success still implies getting a dedicated development team.
With this important factor employed, your company can get the most cost and time-effective solution that perfectly fits all its targets and needs.
At Intellectsoft, we provide various organizations and their workforces with innovative solutions and approaches for getting the most effective performance results.
Do you and your organization want to get a professional digital solution with additional engineering workforce?
Talk to our experts to discover more about the main engagement models, choose the one that fits your goals and learn how your company can start benefiting from it today!
The hospitality industry depends a lot on keeping customers happy, but it’s getting harder to attract and keep them. The pandemic hit this industry hard, and now market competition is tougher than ever, with competitive offerings swaying customers. Hospitality businesses are willing to spend big to win customers back. The main questions for many are: how can we stay ahead of the competition, keep our customers, and increase revenue? Keep reading—we’ve got some answers.
Customers today have so many options that getting their attention is a real challenge. It’s not easy to make them choose your business over others. What worked 10 years ago doesn’t work the same way now. Back then, people often chose businesses based on reputation. But with new types of businesses (boutique hotels, craft cafes) popping up or big enterprises getting a new strategy, expectations have changed. The good news is these businesses have shown what works: great customer service. They focus on personalizing the experience, making things easy for customers, offering loyalty programs, and using smart technology.
In this article, we’ll explore these tech strategies and show you how they can help your business grow, and double the revenue. Keep reading to learn more!
The Importance of Customer Satisfaction in the Hospitality Industry
Customer satisfaction, which equals exceptional customer experience, is the backbone of the hospitality industry. It plays a central role in driving revenue and loyalty, as satisfied customers are more likely to return and recommend a hotel, restaurant, or other hospitality business to others. In fact, a study by the Harvard Business Review found that a 1% increase in customer satisfaction can lead to a 0.5% increase in revenue. Moreover, loyal customers are more likely to forgive mistakes and continue doing business with a company, even if they experience a negative encounter.
Let's quickly review the challenges the hospitality industry is facing right now so we can move on to the solutions and our case studies.
Challenges in Hospitality
As businesses navigate the changes in the hospitality industry, there are some key areas where a little improvement can go a long way. From improving customer service to embracing digital transformation and tackling labor shortages, we’ll take a closer look at today’s biggest challenges—and, more importantly, how technology can step in to help. Let’s get started!
Poor Customer Service
Even with strong and high-quality business offerings, poor customer service can drive potential customers and existing customers away. Common issues include:
Long wait times in customer service queues (it is worth remembering that our attention spans 8 seconds, and we live in a very busy world, so quick and efficient responses are more important than ever.)
Poorly trained customer service representatives
Lack of follow-up
Services not being done properly or quickly
Recall issues that require multiple service calls
These problems can frustrate customers. But, at Intellectsoft, we believe that the right approach, combined with technology, can address them effectively.
Digital Transformation Gaps
Approximately 50% of hotels are adopting new technologies, with 43% automating repetitive tasks and 39% upgrading existing systems. Source: workstaff.app
While many businesses are adopting digital solutions, some still struggle with outdated systems and fragmented data. Legacy companies often face chaos when trying to manage their data and create new systems or add features.
Some of the recent examples include clients coming to us to create AI solutions for their services while their data simply was not ready for the advanced tasks. We advise stepping back, communicating with a company objective, and working on keeping the data clean (centralized, structured, and segmented).
When we’re asked to create advanced systems using AI, we always emphasize the importance of organized data. To train AI and build such complicated systems that truly work, you need to start from the very beginning—collecting, storing, centralizing, and organizing it. We encourage our clients to align all departments to work internally on the data so we can create a unified digital system that delivers personalized experiences.
If you’re unsure where to start with your data, we can help. Collecting feedback at various touchpoints along the customer journey is crucial for gaining insights into customer satisfaction and loyalty. Book an IT consultation with us, and our experts will guide you in mapping out a path to get more from your data and build a system that works for your business and team.
Reskilling Staff
The pandemic hit hard in early 2020, especially for the hospitality and travel industries. Even five years later, many businesses are still feeling the impact. Recruiting and retaining skilled staff has become a major challenge post-pandemic.
Reskilling to address technology’s impact is of utmost importance, as about 40% of hotel General Managers place it among their top three workforce challenges.
We strongly believe that adopting the right technology can help. For example, creating an app to train your staff not only saves time but also ensures consistency in learning. AI assistants can also work alongside your team, helping with tasks like recruitment (providing industry insights, crafting emails) and staff training. Imagine having an app dedicated to making your team’s work easier and more efficient!
How Technology Tackles These Challenges and Supports a Customer-Centric Hospitality Culture
Automation, AI, and similar technologies may threaten many. However, the debate about replacing humans isn’t about that—it’s about cooperation and working hand in hand with technology to achieve the highest standards and establish brand-new “golden standards.” Technology is here to assist staff in listening to and collecting customer insights from data.
Let’s review some of our cases to see examples of how technology helps improve customer experience and supports customer service.
Examples of Intellectsoft projects
Property management systems (PMS)
We created a web platform and mobile app that makes managing daily tasks easier and offers extra services to improve residents’ experience. It gives a clear overview of daily activities and helps with managing units and users. Residents can easily book amenities, submit service requests, and report incidents. The platform also includes features for equipment management, key instructions, workflows, and custom permissions. This makes it easier for staff to stay on top of equipment and ensure residents have all the information they need. Plus, tools like announcements, quick votes, a forum, and a community calendar help build a connected and engaged community.
Guest Experience Management App
Our next app helped our client improve their guest experience by replacing printed marketing materials and the need for phone calls with a smart solution. Now, guests can easily order in-room dining, make reservations, and interact with staff— through a simple tablet in their room. The solution includes three parts: a custom in-room tablet with a variety of services, an admin panel for hotel staff and service providers, and a backend system that connects everything together. This approach makes things easier for guests and staff, improving both convenience and efficiency.
Existing Customers First: Building Loyalty with Personalized Touchpoints
Keeping existing customers is not just a strategy; it’s well-known that retaining existing customers is more cost-effective than acquiring new ones. In fact, research shows that it costs five times more to acquire a new customer than to retain an existing one. KPMG named customer retention as the number one revenue driver for the company.
Moreover, a 5% increase in customer retention can lead to a 25% to 95% increase in profits, showing the significant impact loyal customers can have on a business’s bottom line. Retention strategies, like personalized experiences and loyalty programs, can foster long-term relationships and generate recurring revenue, ultimately making them an invaluable part of any business model.
Personalization: How Technology Can Help?
Everyone loves to feel special—it’s part of being human. In hospitality, personalization has evolved from being a luxury to an essential standard. With the right technology to manage your data effectively, you can deliver those “wow” moments that guests won’t forget.
More than half of hotel chains are already using personalization features on their websites, booking platforms, and apps, and another 39% are planning to follow suit soon. They’re tailoring experiences to fit guest preferences perfectly.
Source: Deloitte
How does technology make it happen?
CRM Systems: They help you keep track of guest preferences, booking history, and special requests so you can offer services tailored just for them.
Loyalty Programs: Personalized rewards and offers show your guests that you value them, keeping them coming back for more.
AI Personalization: AI analyzes guest data to predict what they’ll love (from room upgrades to local recommendations) before they even ask.
IoT Gadgets: Smart room features like voice-activated assistants, or temperature controls adjust to your guests’ preferences, making their stay more comfortable.
With tech-powered personalization, you’re building loyalty and maximizing the lifetime value of every customer.
Our Case Study: Smart Hotel Management & Loyalty Program
For one of our clients, we created a smart room solution, complete with a custom IoT system. Guests can use a mobile app to control services, explore amenities, and find resort information-- with a special touch to their suite type. For the client’s entertainment business, we improved their legacy software by running a full IT and code check, fixing issues, and making the system better for customers.
Along with that, we developed a mobile app for the loyalty program, allowing businesses to effortlessly reward their customers and keep them engaged with exclusive benefits.
Our solutions not only helped the client with special experiences for guests; it also improved operations, cutting costs by eliminating inefficiencies. Here's what our experts shared:
"We transitioned away from ESB (Enterprise Service Bus) systems, which previously cost millions, and replaced them with more efficient, self-managed solutions. Similarly, we’ve implemented Device Farms that improved operations and saved resources."
Leveraging Software to Increase Upsell Opportunities
Here are some examples of tech tactics that will help your team sell more and introduce new offerings to existing customers, improve overall efficiency leaving your team grateful:
Dynamic Pricing Algorithms
For finance and marketing teams, manually calculating pricing by segment to introduce your clients can be incredibly challenging. AI-powered tools can strongly optimize these strategies by analyzing your database in detail.
Upselling via Apps
Boosting revenue in the hospitality business often comes down to personalized experiences. Imagine this: a guest books a room, and then your app suggests a spa package or a room upgrade at just the right moment. Later, it nudges them to book a dinner reservation or a guided tour designed to their preferences. With apps offering these personalized recommendations during and after bookings, you’re not just increasing your revenue per guest but also skyrocketing their experience. And you do it in a sustainable way, not by speculating, but by offering what your customers desire based on their previous experiences. It’s a win-win: seamless, helpful, and far from pushy.
Inventory and Resource Management Software
Making every resource count in your hospitality business is key. Inventory and resource management software allows you to effortlessly track everything from linens to room availability, ensuring nothing goes to waste. Having real-time insights to reduce overstock, avoid shortages, and optimize operations assists sustainably keep everything under control and know what you need to focus more. It helps maximize room occupancy by aligning bookings with available resources, ensuring every room and item is used effectively. This approach leads to smarter management, better guest experiences, and a noticeable boost to your bottom line.
Adopting these strategies not only optimizes your operations but also drives business growth. Ready to discover how technology can elevate your goals? We’re here to create a tailored solution for you.
Steps For Implementing a Customer Service Technology Solution
Improving customer service in hospitality doesn’t have to be a daunting task. With the right technology, you can smooth the path of your operations, speed up response times, and elevate the overall guest experience. Here’s where you can make it happen:
1. Understand Your Needs
Start by identifying the challenges your business is facing. Are you struggling to manage high volumes of inquiries, track customer feedback, or personalize the guest experience? Pinpointing your needs will guide you to the best solutions.
2. Pick the Right Tools
Choose technology that aligns with your goals. Look for solutions that are scalable, easy to use, and integrate effortlessly with your current systems. Options like CRM software, live chat tools, or a guest experience app can make a difference.
3. Equip Your Team
Technology is only as effective as the people using it. Train your staff to make the most of the new tools, so they can deliver exceptional service and resolve issues quickly. Confident, well-equipped staff creates happy, loyal customers.
4. Keep Improving
Once implemented, monitor how well the solution works. Are response times improving? Are customers more satisfied? Regular evaluations will help you fine-tune your approach and keep things running harmoniously.
Some Tech Ideas for Hospitality Businesses
CRM Software: Manage customer interactions and preferences.
Guest Experience Apps: Delight guests with personalized experiences right at their fingertips.
Amenity Management Systems: Simplify operations for everything from room service to facility bookings.
Live Chat Tools: Offer instant support and answers.
Social Media Management Tools: Keep customer interactions engaging and organized.
Integrating these strategies will not only improve your customer service but also deliver unforgettable customer satisfaction, loyalty, and, ultimately, your bottom line. Ready to take the next step? Book a consultation with our experts.
Conclusion
To wrap up everything we've discussed, customer satisfaction and experience are at the heart of hospitality. Retaining customers is more than just keeping them around—building strong, long-lasting relationships and consistently meeting their evolving needs. By understanding their pain points and offering personalized solutions, you can inspire loyalty and drive progress. With the right technology and continuous improvement, your business can stay ahead, let go of what no longer serves you, and keep growing.
At Intellectsoft, with over 17 years of experience in software development, our expert team is ready to help. We create everything from mobile apps to full-fledged portals and systems, leveraging the latest technologies like AI, Cloud, and Machine Learning. With deep experience in the hospitality industry, we’re here to craft personalized solutions that bring your business unforgettable customer experience and retain your valuable clients.
Ready to double your revenue and level up your customer retention strategy with personalized technology? Contact our experts, and we look forward to working hand in hand with you to build or revitalize the perfect app or system for you.
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