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.
A properly chosen IT outsourcing business model will allow you to cut app development costs and save time. In short, the difference between staff augmentation and managed services is as follows:
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.
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.
Geert H. says:
Hi. Now I’m going to outsource my project to an IT managed services company. But I’m not sure that the same people will be assigned to my project during the development process. Is this a crucially important issue? How to find it out without asking the vendor directly?
Darya Tryfanava says:
This is an important question. You should determine if your vendor can deliver and retain staff experienced with your software during the development phase and provide support and enhancements over time.
Unfortunately, there is no clear answer. But before you get started, ask your provider a few follow-up questions about:
– Will your staff work full time on my project?
– Will I be told if you are changing the staff that works on my project?
– Are the assigned staff employees of your firm, or do they work as contractors?
– What is the turnover rate at your firm?
Hi. I want to hire a managed service provider. What should I do to verify their skills and knowledge? I should do interviews with each team member or should I just believe in their skills?
James W. says:
The first step is to look at the company’s reputation and case studies. If everything is ok with reputations and there are similar cases, ask your technical expert to do a small test task for managed service team to check what they are capable of.
In case you do not have a technical expert and you are not sure about the skill, then you can hire a certain person who will do this work for you.
But in my opinion, if everything is ok with the reputation and there are similar cases, then I would not worry.
Josh Wilcher says:
Hi, I’m thinking about outsourcing IT services to a managed services provider. Before signing a contract, I would like to find out how long it usually takes to write a complex IT Managed Services proposal?
I asked this question to solution providers and got the answer: “It depends”.
Darya Tryfanava says:
The length of time taken depends on countless variables. It can range from a few weeks to several months. For example, you can draft uncomplicated proposals in about a month. For more complex proposals, you could be talking 6-7 months or even more.
Key variables include:
1. Sector and jurisdiction.
3. The procurement mechanism.
4. The scale and scope of the service required.
5. A clear proposal template.
6. The effectiveness of your writing approach.
7. The quality of your Bid Management.
8. The experience, knowledge, and skills of your team.
Note, if you decided to create a public bid, there is no upper limit. Assuming a private bid, the actual writing of the proposal should be pretty straightforward. If you have a good proposal template with suitable snippets to handle various situations, actually putting it together might take a few days.
In a nutshell, the more time you spend upfront, the faster the proposal writing goes.