The IT outsourcing industry has grown rapidly over the past decade. The advancements in development technologies, communication and project management tools has enabled businesses to quickly scale up their development teams with resources from across the globe.

Most businesses find themselves in the staff augmentation vs managed services comparison when they’re also considering IT outsourcing. These are two of the most common outsourcing methods.

Each has its own set of advantages and disadvantages. So it’s imperative to have a great understanding of the two in order to pick one that suits your needs the most.

Staff Augmentation Services

In the most simplest of terms, staff augmentation refers to the practice of bringing outside personnel onboard to augment the capacity of your development team. It’s largely considered to be a temporary solution, in that the new resources that are brought on are engaged for a limited period of time.

Staff Augmentation Features:

The primary feature of staff augmentation services is that they enable you to scale up your resources quickly. If there's a temporary spike in the workload, additional resources can be rapidly deployed to deal with task at hand.

It's a useful strategy to implement when there's a need to bring talent with specialized skills onboard. Instead of starting the hiring process from scratch for a full-time employee, organizations can rely on staff augmentation services to fill the gaps on an ad-hoc basis.

Staff Augmentation Advantages

Cost savings

One of the main reasons why staff augmentation is highly regarded is that it provides substantial cost savings. It’s going to cost a company far less to scale up their team through a staff augmentation service than it would to hire new employees for the company.

That’s because the resources acquired through staff augmentation are only utilized for a short period of time. They’re only paid for the amount of them that they’re required so when the work ends, so does the expense.

Access a larger talent pool

There may be times when the internal development team doesn’t have the kind of skills required for a specialized task. With staff augmentation, organizations can quickly access a vast talent pool of highly skilled developers, designers, project managers, and more.

It reduces the risk of disruptions to the project as people with the required skills can be brought on board quickly. They can get started and the work can continue so that the project can meet its deadline.

Scalability

If more resources are required at one stage of the project, they can be added quickly. Once that stage passes and they’re no longer required, the staff augmentation service provider can simply take that back.

This level of scalability and flexibility is only made possible by staff augmentation. That’s why it’s such a perfect way to fulfill short term requirements, no matter the complexity of the project.

Disadvantages of Staff Augmentation

Additional oversight

When onboarding external talent, additional oversight is required as the resources brought in to work on the project aren’t a part of the company. This may necessitate more oversight on the work that they do to ensure that nothing falls through the cracks.

Internal bottlenecks

If there are rigid internal processes that need to be followed for all of the work that’s to be done, this can often be a bottleneck. The new workers have to be brought up to speed first so that they can always be in compliance of the processes.

Longterm costs are higher

Any change in circumstances that result in the retention of the resources for a longer period of time can eliminate the cost efficiencies that staff augmentation provides. It’s not suited for longterm resource allocation.

BEST USED FOR

  • Short term needs
  • Low-budget projects
  • Projects that require flexibility

Managed Services

Managed services are entirely different from staff augmentation. They provide organizations with a comprehensive range of services. It’s meant to be a long term solution whereby the service provider becomes entirely responsible for managing a part of or the entire IT infrastructure.

Managed Services Features:

It often happens that business owners want to outsource their entire IT operations so that they can focus more on actually growing the business. Managed services are the perfect solution to those needs.

Third-party experts take on the entire IT infrastructure. They become responsible for maintenance, management, upgradation as well as any and all tasks that may be required by the client.

Managed Services ADVANTAGES

Focus on core business objectives

If the management of your IT infrastructure taking away too much time and not enabling you to focus on core business objectives? That can actually be detrimental to the future of your business.

By relying on a managed services provider, an end-to-end solution can be used to free yourself of the hassle of managing the infrastructure. Everything that needs to be done is done by the service provider, leaving you to focus on achieving your business goals.

Lower costs over a longer term

Utilize managed services only as a long term solution in order to take advantage of the lower costs overall. It can also help make IT expenses more predictable as the cost is packaged by the service provider either in a set monthly or annual payment.

Since the service provider also has the guarantee of a long term contract, they're willing to be more flexible on price as opposed to staff augmentation services where the average contract duration can often be mere months.

24/7 Support

Constant monitoring of IT systems is both a hassle and a necessity. Outsourcing the task to a managed services provider gives you the peace of mind that there will always be someone keeping an eye out.

Should a system go offline in the middle of the night or a problem arise out of the blue, someone will be on hand to provide support without delay.

Managed Services DISADVANTAGES

Lower flexibility

An internal IT team is open to different ideas, testing out different programs and frameworks to find the one that suits the organization best. It's possible that the managed services provider you choose may have a preferred framework or program. They may not be willing to work with your internal team to test different things.

Potential confidentiality issues

When outsourcing your IT management to a service provider, it's important to keep in mind that they could also be outsourcing some of their technical tasks, possibly to teams overseas. Always confirm with your managed services provider if that's the case and whether they will be willing to sign an NDA if you require confidentiality.

Service providers may have limitations

Many managed service providers have limitations around the way they approach the project. For example, while some might let you add users whenever you'd like, others might limit that to a set number of users at once. Again, discuss whether your service provider has any such limitation that you need to take into account.

BEST USED FOR

  • Long term projects
  • Outsourcing entire projects
  • Cost savings over a period of time

What to Choose Managed Services vs Staff Augmentation?

The IT outsourcing method that’s best suited for your organization depends on what the need is. Since both are such poles apart, it’s easy to realize at a glance which method is best.

Organizations that are need of a short term solution, that require talent to come on board immediately and fill the gaps for a relatively short period of time, they should opt for staff augmentation. The kind of flexibility and cost efficiencies that they’re looking for will only be obtained through this method.

On the other hand, managed services are better suited to organizations that want to outsource entire projects. This gives them the peace of mind because they’ll have a dedicated team looking after their project. It also makes their IT outsourcing costs predictable and enables them to save money in the long run.