Catering to the new shift in IT industry of reducing bench resources
Typically, as most persons are familiar, Just in time is an inventory management method for materials and goods to be available “On Demand” or be replenished as required in the production process.
The general perception is that this method is most suitable for companies and industries where repetitive manufacturing functions are involved and are beneficial when the tasks involved are on an assembly plant or a job floor. However, with the rise of Information Technology and the advent of service-based businesses in the last one and a half decades, this has become an established practice in the IT circles too.
With a growing industry but season based demand for example in case of service businesses, it is highly time-consuming to build, maintain and manage the turnover of developers inventory through the traditional candidate pipelines. Moreover, despite the time and efforts put in it is not always as value adding for either the firm or the client since many software developers remain as Bench Resources in wait for a project and are a preventable cost to the company.
“Benched Resources” by definition are software developers who are waiting to get the project(s) to work upon. While these are important assets for the firm, it is also crucial to note that Benched Resources do not bring in revenues till such time that they get a project and hence remain more of a cost to the company. On the one hand, in situations or seasons where there are no or limited projects with the firm, it considers trimming down resources on the bench and on the other, the fact that he/she is waiting on the bench and a trim-down possibility can be demoralizers for the resource. Bench Resources were considered as the key strength of the Indian IT industry for a long time. However, with the increasing popularity and relevance of Developers being available on demand for short and fixed-term contracts, the environment is different. Added to this is the rise in automation and all these factors have reduced the average bench strength from 8% to 4% in recent years.
“Great vision without great people is irrelevant.” – Jim Collins, Author of Good to Great
How can IT companies then maximize the value for both the software developers as well as the company with appropriate planning and work allocation?
This is where Developers on-demand model comes into the picture. Traditionally, firms build and maintain candidate pipelines without an actual need but with developers on-demand model, IT companies are able to hire candidates that exactly match the needs or requirements of the project, at the time when they want them, in the appropriate number and at a mutually agreed cost or fees. Albeit, this does not provide the safety of the traditional candidate pipeline approach yet it is more targeted and rewarding. Also, with the advent of gig economy, business models where services are traded on the basis of access rather than ownership are picking up.
In some cases, many companies consider outsourcing projects for a specific duration when they want to focus on their core businesses. Many IT companies today send their benched resources to other companies for a project. In this way, the companies are able to leverage expertise from multiple talents for specific projects and also better utilize the available resources by sending them for specific projects outside.
Given below are some benefits of Developers On demand method.
- This is a pull system where the resource is pulled or utilized based on a need or demand. This permits IT companies to cover the staff requirement without having excess human inventory.
- Developer on Demand faster resource replenishment and lesser burden on the human resource department of the company.
- Developer on Demand model gives companies flexibility and convenience to get access to different talents which are existing across the industry. Moreover, since resources can be found quickly (usually within 24 hours) there is increased productivity and less slack time.
- This approach reduces the overall cost to the company, increases efficiency, productivity and saves on crucial organization time.
“The smartest business decision you can make is to hire qualified people. Bringing the right people on board saves you thousands, and your business will run smoothly and efficiently.” – Brian Tracy
With so many advantages on the table, still one cannot nullify the importance of having some benched resources in this industry. Resources which specialize in certain skills and are high on performance are contracted so that they can be called upon as needed
The Developers on-demand model is beneficial as it makes underused software developers, both tangible and intangible. If companies come together and start sharing their underused resources or services, this will decrease cost and also will make sure that every resource is rightly utilized.
– Team iView