Staff Augmentation vs Managed Services One of a company’s most valuable assets is its workforce. Furthermore, companies have more options than ever before. They may now access a global talent pool and are not restricted by geography thanks to the advancement of technology and remote work.
An increasing number of businesses are opting to outsource project development and other crucial responsibilities. Actually, it is predicted that the worldwide outsourcing business will reach a valuation of over $260 billion and quadruple by 2030.
There are several outsourcing models, and each has advantages and disadvantages of its own. Let’s examine managed services and staff augmentation side by side so you can decide which is best for your business.
What is Staff Augmentation vs Managed Services?
What Is Staff Augmentation?
An outsourcing business model known as “staff augmentation” allows organizations to hire temporary outside workers to swiftly increase the capabilities of their present workforce. You may scale your workforce up or down in response to demand and access talent that is available onshore, nearshore, and offshore.
Businesses in the IT sector can employ staff augmentation for programming, workflow optimization, quality assurance, and quality control, among other phases of the development process. As a consequence, you may get beyond certain obstacles, hire crucial personnel that your team might be lacking, stick to a budget and schedule, resolve issues, and deliver your product more quickly.
Staff augmentation saves money and gives your company flexibility. Typically, it’s a stopgap measure that lets you make use of your current staff and resources while saving operating expenses and gaining access to outside talent.
What is Managed Service?
A managed services provider, or MSP, is a third-party provider that a firm entrusts with specific activities as part of an outsourced business model. Managed service companies accept nearly any kind of outsourcing from businesses. This might include software development, database management, data transfer, and cybersecurity.
Managed service providers work independently as opposed to becoming a part of the internal IT team of the business. After receiving clearance, they present a customer with a quotation and project timetable and begin working on the assigned assignment while keeping in constant contact with them.
Because it eliminates the need for overhead, HR labor, and resource management, the managed services approach is economical. Business can concentrate.
The Pros and Cons of Staff Augmentation
Pros:
Personnel adaptability:
Your team can be increased or decreased based on demand. Furthermore, individuals who supplement your internal team typically integrate and begin functioning more quickly than teams as a whole.
Selection of experts:
With staff augmentation, you may select the professionals that most closely match your qualifications in terms of experience, education, and certifications while also gaining access to top talent.
Integration of new team members with ease:
Your current team and the outsourced workforce collaborate as a single entity. Not only will you be able to onboard them rapidly, but you’ll also be able to monitor their development going forward.
More abilities at a reduced price:
When your internal team lacks the specialized expertise necessary to properly complete a task, staff augmentation is an extremely useful alternative. carry out an assignment or finish a development project. These workers won’t require any training because their hiring was based on their senior-level expertise and/or specialized abilities. Additionally, you just need to pay them for the while that they are employed by you rather than having to pay their whole wage.
Total command over the project:
You may maintain control over the project’s budget, schedule, and quality by using staff augmentation. Deadlines and processes won’t need to be changed, and since you can continually monitor the process, there won’t be as many unforeseen problems.
Keeping appointments:
There is no need to since staff augmentation can assist you in bridging the knowledge gaps in your own team. Pause or end the progress of a project. You may stick to your regular routines, adhere to deadlines, and do business as usual.
Reduced managerial problems :
By using staff augmentation, you may lower the expenses and responsibilities related to full-time employee recruiting. Additionally, you may immediately supervise the progress of the project, make important adjustments and choices, and be involved at all times as it progresses.
Lower chance of losing intellectual property:
You can ask your additional employees to sign nondisclosure agreements (NDAs), which guarantee that private data stays inside your company. You are in command of communication routes and project management, therefore there is less chance that an unauthorized third party would obtain sensitive data.
Cons:
Better suited for brief projects:
While staff augmentation assists you in addressing knowledge shortages and experience, as well as offering efficient short-term help (less than a year), it is typically more affordable to work with an internal team if you need committed long-term support.
Internal instruction needs:
Through staff augmentation, you can acquire specialized knowledge and abilities. Nonetheless, you will have to train your additional employees on the internal procedures of your company.
Need for internal procedures that are well-established:
In particular, if you will be outsourcing work to experts in other time zones, your organization must have established procedures and communication for your in-house team to collaborate with external personnel efficiently.
The Pros and Cons of Managed Services
Pros:
Skills and expertise: You can access a whole team of professionals who have access to the required tools and technologies and can get started immediately, saving you the trouble of assembling an internal team.
No training is required: Since a managed services team may start working out of the box, hiring, training, and onboarding expenses can be completely eliminated. This team includes a project manager or business partner to make sure your deliveries are always on schedule. access to a top-tier tech stack without having to pay for ownership. IT tools and technologies can be costly, and mastery of them requires practice and training. It is possible that a singular genius does not have access to this. Conversely, managed service providers typically purchase equipment to better serve their clients and write off the related costs as business expenses. As a result, you may anticipate a team with access to the newest equipment and proficiency in its application.
Prioritize your main business functions: Working with an internal IT team will require you or a committed employee to be actively involved in the development process, which will take away from their capacity to concentrate on other duties. You can focus your time and energy on other areas of your business, including growing sales and customer service, by outsourcing your IT requirements to a reputable managed services provider.
Committed project administration: For software development to be completed on schedule and within budget, your IT staff will gain from using DevOps and project management techniques. You might need to hire more employees if you operate with an internal team. Professional managed service providers typically handle project management duties in addition to having the tools and resources required to guarantee a productive and efficient development process.
There’s no need to rehire certain experts: Even with the best hiring practices, employees may leave for personal or professional reasons. This would need starting the hiring, training, and onboarding all over with a different expert, which might delay the project. If you contract with a managed services company for development, they will take on the duty of replacing any lost talent and won’t require more input from you.
Cons:
Have to offer a comprehensive project brief: A managed service provider needs to get comprehensive project requirements from you. By doing this, the likelihood of successful project completion and precise cost estimation will be increased. If not, your project could need adjustments, which would raise the total cost.
Control and security concerns: A third party that you outsource parts of your business to has access to confidential information and data about your company. The unreliability of your managed service provider might result in serious security problems.
Reduced communication frequency: Your communication with the external team will continue, but maybe less often, as the entire process or project will be outsourced to them. This might be a problem if you want to play a more active part in the creation of projects. Furthermore, it could be more challenging to identify and resolve problems and faults quickly.
Potentially greater expenses: Managed service companies could supply bundles of resources and tools that you might not require. Additionally, hiring a team and a project manager would cost money that you may not be able to afford compared to just expanding your current team by one or two workers.
Possible disputes: Businesses frequently outsource services to offshore managed service providers in order to save expenses. However, this might result in a breakdown in communication, a delay in decision-making, and problems related to language or culture, all of which could have a detrimental impact on the project’s conclusion. Furthermore, managed service providers maintain independence while making important daily decisions and can make decisions with which you may disagree.
Intellectual property rights: After the project is finished, ownership of the intellectual property must be clearly understood and stated in a formal contract.
Staff Augmentation vs. Managed Services: Cost, Flexibility
Even though each outsourcing business model has benefits and drawbacks, you must carefully evaluate the various facets of your company to decide which model is best for you. The following are the things to think about:
1. Flexibility
A certain amount of flexibility is provided by both managed services and personnel augmentation. Staff augmentation will be especially helpful if you are working with an internal team that needs more help or specialized knowledge. You may scale your team size based on your needs with this outsourcing strategy.
With managed services, you may work on projects or complete tasks without the assistance of internal experts. But MSPs often charge a retainer fee, and you might not be able to scale your workforce up or down with them.
2. Cost
You just have to pay for the time your additional staff works for you when you use staff augmentation. Both huge corporations and small and medium-sized firms with limited resources may find this appropriate.
However, managed service providers need a consistent investment. They charge yearly and on a retainer basis. This might be a very affordable option if you don’t have an internal IT staff. It normally costs more than staff augmentation, though.
3. Control Level
In comparison to managed services, staff augmentation gives you a lot more control. With staff augmentation, you may expand your current team and take an active role in the project’s progress.
A supplier of managed services in constant contact with you. On the other hand, you are far less in charge of daily operations and procedures. Decisions resulting from this could not be in line with your company’s objectives.
4. Safety
In both outsourcing approaches, carefully screening professionals is essential. However, staff augmentation has fewer potential dangers, which are readily mitigated with the use of an NDA.
Meanwhile, using managed services necessitates giving a third party access to private information. When hiring a managed services provider, you should also discuss intellectual property rights to make sure you don’t end up paying for a project for which you don’t ultimately control the rights.
5. Length of Project
Staff augmentation is a practical and economical alternative for short-term, low-budget initiatives as well as those that need adaptability. On the other hand, because managed services may help reduce money over a longer period of time, they are more suited for long-term demands and the outsourcing of complete projects.
Why Select Staff Augmentation
Short-Term Projects: Staff augmentation offers extra support or specialized expertise for a project. A great option for your company, when it requires temporary help for a particular project, is staff augmentation. It’s not necessary to commit to long-term employment. The ability to bring in expertise for the duration of the project is made possible by staff augmentation.
Scaling Flexibility: You may quickly add or remove employees thanks to staff augmentation. Staff augmentation allows you to quickly modify your team size if your project has high ups and lows. It works well for companies whose workloads fluctuate or their project durations vary.
Keeping Direct Control: Hiring More Workers gives the project immediate control. This covers the process of developing a project, choosing and managing team members, etc. Staff augmentation is a good fit for your undertaking. Regulate personal preferences. In order to accomplish project objectives, augmented workers may also easily merge with your team.
Why Selection of Managed Services
Long-Term IT Management: If your company needs long-term, all-inclusive IT management, managed services are the ideal answer. MSPs are the greatest option if you would rather outsource daily IT operations and support. It enables your internal staff to concentrate on strategic initiatives and key business operations.
Cost certainty: When you want budgetary or cost certainty, managed services are the better option. Usually, they have set monthly or yearly costs. It enables you to confidently plan your IT budget. This consistency makes financial planning easier and reduces unforeseen costs.
Enhanced Security and Compliance: Organisations that place a high priority on cybersecurity, data security, and compliance should choose managed services. MS Partners maintains a variety of compliance procedures and security safeguards in place. This guarantees that the IT environment you have is compliant with industry standards.
Intricate IT Infrastructure: Managed services work well for complex IT infrastructures that require proactive maintenance, support, and round-the-clock monitoring. MSPs are equipped with the resources and know-how to manage intricate technological systems.
Conclusion
From the foregoing explanation, it is clear that staff augmentation offers direct control and flexibility for short-term initiatives. It is perfect for companies where workloads vary Managed services, on the other hand, offer long-term IT management, cost predictability, increased security, and all-encompassing support. It works best in long-term collaborations with ongoing oversight.
It is up to you to decide which of the two models is best for your needs. Take into account the length of the project, the need for scalability, the predictability of your budget, security issues, and the complexity of your IT infrastructure. It’s simple. The best option if you need to cover a talent gap in project development is personnel augmentation. Additionally, if you’re expecting a team to begin working for you immediately and you require long-term assistance.
