I’ve been in the tech industry for more than 20 years. From hands-on coding to senior leadership roles. From start-ups to large & established organisations. From product to services and to outsourcing companies. And there was so much to learn from all these business models, industries and technology stacks.

Recently, my focus has been primarily on the Romanian IT market and working closely with big brands which have local presence but also with Romanian-born companies. In my role, I connected with lots of peers from other local players, mainly outsourcing companies. All having the same challenges: the clients are deciding the way of collaboration in a client-supplier relationship and staff augmentation approach (body leasing or body shopping, the terms I frequently use). Usually, the discussion around a contract is the number of resources, skills, seniorities and rates. Which I find it a bit auto limitative. For both parties involved in this contract.

Don’t get me wrong, staff augmentation has its advantages, providing full flexibility for the client to ramp up or down and having access to highly skilled resources. And for the outsourcing companies, having little to no responsibility other than adding margin on top of the resources they supply.

While staff augmentation is a model which has worked, is currently working and will continue to work for the clients and suppliers, I believe the Romanian market needs to diversify on top of this approach so that it grows, adds more value to the clients and innovates.

Outsourcing companies need to move from this easy, comfortable and low risk model and embrace more challenging but more rewarding and value-adding models. While clients need to be more open and embrace collaboration and partnership in its true sense.

By shifting from a transactional relationship to a more integrated partnership, outsourcing companies can deliver greater value, driving innovation and contributing to the long-term success of their clients.

Some positive outcomes of a partnership vs a client-vendor model:

1. Understand the business of the client. A partner will go beyond technical delivery. They will invest time in understanding the client’s industry, business model, market challenges, and growth opportunities. This knowledge allows them to provide tailored solutions that are not only technically sound but also strategically aligned with the client’s objectives.

2. Create meaningful relationships within the client org chart at all levels, so that there is trust at each seniority level and departments. And whenever issues arise (which is inevitable), you know who to reach out and solve the issue together.

3.  Bring different perspectives, proactive innovation and continuous learning

• Create innovation hubs. Work closely with the client to explore new ideas, experiment with emerging technologies, and develop prototypes. This can help the client stay ahead of the curve in their industry.
• As a technology partner for the client, it’s the outsourcing company’s duty to stay up to date with technology trends. It anticipates needs and suggests improvements or innovations that can drive the client’s business forward. This proactive approach turns the partnership into a source of competitive advantage and allows the outsourcing company to act as a strategic consultant.
• Co-create and co-host technical events like hackathons and conferences
• Have your experts transfer knowledge into client teams so that there is same level of expertise and the client benefits from the the tech savvy resources from the outsourcing company in its entirety, not only delivering software.

4. Having common goals, sharing risks. Rather than being compensated for the hours worked, the outsourcing company is paid based on the results achieved. This could include metrics like time-to-market, product performance, or customer satisfaction. This model aligns the outsourcing company’s incentives with the client’s success.

Transforming from a supplier of technical resources to a strategic partner requires an outsourcing company to take on a more proactive, integrated, and value-driven role. By understanding the client’s business deeply, bringing innovative solutions, and choosing the right collaboration models, an outsourcing company can become a key part of the client’s ecosystem. This evolution not only benefits the client by driving better results but also creates a more stable and mutually beneficial relationship for the outsourcing company. On the other hand, the clients need to be more open, more flexible and focus more on their core business while creating trusted partnerships with technology providers while growing their internal capability with the help of the partner.