In a global economy characterized by instant communication and state-of-the-art technology, remaining competitive is both imperative and tricky.
But what should a company do if it has no internal resources to deal with an issue?
If you hire an in-house team, you risk spending too much energy, time, and money on recruitment, rather than project completion and launch—especially when you have a fast-growth and time-limited project.
That’s why more and more companies today are seeking IT outsourcing solutions. There are two well-known options in this area: staff augmentation and managed services. Both SA and MS models are viable alternatives to a full-time in-house team, but which model will be the most effective depends on your project type and size.
In this article, we compare staff augmentation vs managed services and discuss their relative advantages and disadvantages to determine which solution is better.
Next, let’s take a closer look at these two methods.
So, what is the actual difference between managed services vs staff augmentation models? What are the advantages and disadvantages of these two models? Let’s find out.
Imagine that your team is working on a software development project and keeps hitting the same roadblocks. Even though every teammate is immensely talented, you’re still missing the key skills required to launch your product.
One of the most affordable solutions is to incorporate IT staff augmentation into your workflow. Staff augmentation allows you to bring outside personnel on board to enhance the capacity of your development team. It combines the reliability of a full-time workforce with the flexibility of project outsourcing, enabling you to scale your team up or down based on your current needs. This approach can leverage existing resources or involve hiring contract workers.
It’s considered a temporary solution, as new employees are brought on and engaged for a limited period of time. As a long-term solution, staff augmentation has fewer benefits than long-term external sourcing models such as managed services.
The staff augmentation process in most companies involves three core steps:
There are two main types of IT staff augmentation models: short-term and long-term collaboration.
This type of model is commonly used by companies during busy periods as well as when an in-house specialist is on vacation or has taken sick leave.
These services are best suited for long-term projects when a company needs to fill a skill gap, cut operational costs, or save time in the in-house hiring process.
Staff augmentation can be further divided into three categories:
You require reliable employees to perform a specific task, but they don’t need to be highly skilled.
Examples include basic factory or warehouse work, retail, and events.
You’re looking for employees with specific skills, but their specific skill level is also not crucial.
Examples include data processing and basic copywriting.
You require a specialist with advanced skills.
Examples include software engineering and brand design.
Below are some of the pros and cons of IT staff augmentation.
Normally, the augmentation team members are treated as new hires for an expanding team. This means that your existing team will not feel that their jobs are being threatened and will understand that the additional members are supporting them, not replacing them.
However, new employee onboarding requires more time and effort from the established team. You should assign tasks to the appropriate team members to ensure a smooth transition for your new teammates. You should also consider security measures, access issues, and other contingencies for the work to be done.
Managed IT services means that you can outsource certain IT functions to a third-party provider, a so-called managed service provider (MSP). Services can cover almost everything, from cybersecurity needs to VoIP solutions to backup recovery and more. Organizations typically seek out outsourced IT support when they lack the capital to hire and manage their own in-house IT teams.
In an effective managed services relationship, you will benefit from predictable pricing and the ability to focus on core business concerns rather than IT management duties.
However, it’s important to note that serious problems could arise if you choose the wrong provider, which could lock you into a multi-year deal that doesn’t fit your business needs. It’s therefore crucial that you take the MSP vetting process seriously.
In this case, an MSP generally takes on the entirety of network tasks: establishing a LAN, WAPs, and various connections for your business. The MSP also manages backup and storage options.
This service for remote security infrastructure involves everything from BDR solutions to anti-malware options and keeps all such services updated.
This service covers the monitoring and management of messaging software, VoIP, data, video, and communication apps in general. In certain cases, your provider can operate as a third-party call center.
The provider offers a (usually subscription-based) software platform for businesses. Examples include Microsoft 365 Office apps, universal communication software, and antivirus software.
If you’re looking for monitoring services for data management, you will most likely need data analytics. This service encompasses business intelligence to target specific trends, creating roadmaps to boost business performance.
This option typically covers all services related to IT help, from troubleshooting routine issues to dealing with advanced cases.
The IT managed services model allows you to hire an entire team of professionals with the right skills, knowledge, and technical tools for the job.
To make sure you can rely on your new partner, you should ask for regular reports and analytical statistics so that you can keep track of the project. You should also ensure that your partner works according to the agreed plan and ensures that the case is completed on time and within budget. In this model, the project’s outcome depends mostly on your partner.
Check the partner’s previous experience and read reviews of their previous work. This will ensure that you are hiring an experienced team who will take care of your project and deliver a high-quality product. To avoid paying extra costs, review the pricing policy and check whether there are hidden expenses.
So, which outsourcing model should you choose for your business? The comparison table below explains the differences between the IT staff augmentation and managed services forms of outsourcing.
|IT Staff Augmentation||Managed Services|
|Processes||Outsources tasks and functions (inputs)||Outsources solutions and management (outputs)|
|Billing||Billed based on time spent on the project, often biweekly||Billed on retainer, often annually|
|Project types||Flexible and scalable; best for rapid-growth projects||Stable and reliable; best for long-term IT management|
|Recruiting||Recruited by vendor||Ready to go|
|Engagement||Full time||Full time or part-time|
|Communication||Direct||Via vendor’s PM|
|Best use cases||
As you may have noticed, the two methods are entirely different, and it can be difficult to determine at a glance which one is best. The answer largely depends on your needs.
If you are looking for a short-term solution that requires talent to come on board immediately and fill certain gaps for a short period of time, you should opt for staff augmentation. This method offers the flexibility and cost efficiency that you’re seeking.
If you intend to outsource entire projects, the managed services model is the most suitable option. You’ll have a dedicated team looking after your project. Since this makes your IT outsourcing costs predictable, you can save money over the long term.
After reading this article, take a moment to watch the following video, which explains the most significant differences between IT staff augmentation and managed IT services.
Are you choosing the best model for your business? Contact us, and we’ll help you select and apply the approach that will be the most effective for your specific business case.