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January 23, 2024 - by Devico Team

Staff Augmentation vs. Managed Services

Modern business is a race at high speeds. Companies are continuously striving to improve operational efficiency and shorten lead times in order to pioneer the market and leave their rivals in the dust.

Trying to keep up with this frantic pace, many companies resort to the help of external vendors. Staff augmentation and managed services are among the most popular modern outsourcing models helping organizations to operate seamlessly and quickly respond to new demands.

If you also feel that addressing everything in-house hinders your project development and would like to bring in external experts, the question arises whether to opt for staff augmentation or managed services. While both of them suggest collaboration with a third-party vendor, they still have significant differences. All nuances of these two approaches are covered in this article. Keep on reading to gain insights and understand which one better aligns with your needs and objectives.

What is IT Staff Augmentation?

Staff augmentation can be defined as an outsourcing model using which companies can quickly reinforce their in-house teams with the external labor resources they currently need. This way, a company can get at its disposal a developer, UI/UX designer, QA engineer, or any other IT specialist with a specific skill set while not employing them.

IT specialists provided by an external vendor join an in-house team and closely cooperate with it as long as their help is needed. Once a task or project has been completed, augmented specialists can be easily dismissed as there are no long-term commitments.

Staff augmentation is a great way to tackle short-term tasks requiring specialized skills or swiftly bridge skill gaps in an internal team.

Due to giving an opportunity to quickly engage required experts without long-term obligations, time-consuming recruiting and hiring process, and costs associated with the employment of in-house staff, staff augmentation is widely used today in the IT industry.

Types of Staff Augmentation

A few types of staff augmentation are distinguished. First of all, we can speak about short-term and long-term staff augmentation. This simple classification needs additional explanation. While staff augmentation primarily serves to tackle short-term tasks, quite often augmented staff stay engaged for years if a project needs them.

There is also one more classification. Let’s take a closer look at the three common types of staff augmentation:

  • Commodity-based Augmentation

Commodity-based augmentation implies engaging labor resources with common skills to fill standard positions within an organization. It is suitable for roles and tasks that do not require any highly specialized expertise. Commodity-based augmentation is deemed to be a cheaper way to staff essential but less specialized roles.

  • Skill-based Augmentation

This type of staff augmentation sparks more interest because it allows businesses to bring in talent with specific skills necessary for the successful completion of specialized tasks or the implementation of a whole project. Businesses opt for it when they require certain expertise that their internal team lacks. Skill-based augmentation provides an opportunity to obtain the precise skill sets needed without any long-term obligations.

  • Highly Skilled Augmentation

As you might guess, highly skilled staff augmentation enables businesses to quickly acquire top-tier experts with exceptional proficiency, vast experience, and a proven track record in completing complex and specialized tasks. These specialists are often sought after for critical projects where the highest level of competency is required. Highly skilled augmentation ensures that the most challenging and critical tasks are performed and managed by real domain champions.

Pros and Cons of IT Staff Augmentation

To see the big picture, let’s delve into the strengths and weaknesses of staff augmentation.

Pros of staff augmentation

  • Flexibility

The key advantage of staff augmentation is that it offers companies the flexibility to ramp their teams up or down according to current project needs. With its help, both the size and composition of a team can be adjusted quickly and painlessly without the heavy burden of long-term obligations and layoffs.

  • High performance

Augmented staff can join an in-house team to handle specific tasks or projects as well as assist with ongoing tasks so that the team can meet even the most stringent deadlines. So, augmented staff can provide you with extra hands whenever you need them to ensure a smooth development process and timely software version delivery.

  • Cost-effectiveness

It goes without saying that cost efficiency is what often makes staff augmentation particularly attractive. Using it, not only can companies bring in top talent at lower rates but also avoid expenses on recruitment, training, fringe benefits, workspace maintenance, etc. As a result, staff augmentation is a perfect solution for startups and SMEs on tight budgets.

  • Access to a vast talent pool

These days there is a significant talent scarcity in the IT sphere. Companies may spend a few months searching for a specialist with the needed skill set. Staff augmentation companies can quickly provide you with specialists possessing the particular expertise you need to address your needs. This access to specialized talent is particularly helpful for projects having a need for niche skills or expertise in the latest technologies.

  • Knowledge sharing

Augmented staff do not work on their own. On the contrary, they integrate with an in-house team and closely collaborate with it. In such a way, they bring new knowledge and best practices, which in-house staff also learn and adopt. This leads to better project outcomes and the ability to manage future projects autonomously.

Cons of staff augmentation

  • Additional managerial efforts

As a rule augmented staff works remotely. This imposes a need for additional managerial efforts. Managers should reconsider their current processes to align and coordinate the work of both internal and external staff with regard to the remote working of the latter and possible differences in time zones.

  • Communication gaps

Communication is a pivotal factor for the success of any collaboration and project development. Unfortunately, when it comes to staff augmentation, there is a risk of poor communication that can be caused by time differences, cultural misfits, and language barriers.

  • Quality risks

Quality risks are present in any cooperation model, including staff augmentation. To mitigate them it is essential to work with a trustworthy staff augmentation company, have a contract protecting your interests in place, and personally check every proposed candidate to make sure they are indeed the best fit for you.

What Are Managed IT Services?

Now, let’s turn our attention to managed services. In this case, companies outsource particular IT functions or processes to a third-party vendor that takes on the accountability for their planning, management, implementation, and maintenance on a long-term basis. So, Managed Services support and optimize specific IT operations, enabling businesses to completely focus on their core activities.

Companies have an opportunity to outsource almost anything: cybersecurity, DB administration, software development, cloud migration, network performance monitoring, and many others.

As opposed to augmented staff joining an internal team and collaborating with it, a managed service provider works on its own based on a signed service-level agreement. It provides a client with a price quote, time estimation, and plan and after getting a client's approval, works on the assigned task while ensuring regular reporting on work progress.

Types of Managed IT Services

Managed IT services can be classified based on the type of provided service. Let’s review the most popular ones:

  • IT infrastructure management

Companies can delegate to a managed service provider management and maintenance of their IT infrastructure including server maintenance, network monitoring, and data backups.

  • Application management services

Managed service providers also deliver comprehensive support for managing companies’ apps or websites throughout their lifecycle including their maintenance, updating, bug fixing, and performance improvement.

  • Managed cybersecurity

Security operations of a company can be also outsourced to a managed service provider specializing in cybersecurity. A reliable partner will handle vulnerability management, hazard hunting, incident response plan design, and many other related tasks to strengthen your cybersecurity posture.

  • Network management

This type of service suggests monitoring and maintaining companies’ network infrastructure. It covers such tasks as network monitoring, performance optimization, security management, and troubleshooting.

  • Cloud management

The use of cloud technology is beneficial for the majority of companies, and managed service providers assist them in migrating to the cloud, optimizing cloud resources, and ensuring solid data protection in a cloud environment.

  • IT support

Remote IT support and remote IT help desks are also offered to help companies address user inquiries, troubleshoot problems, and provide quick resolutions. This way either in-house staff or end users can swiftly access expert support.

Pros and Cons of Managed IT Services

Now, it’s time to study the advantages and drawbacks of managed services inside out.

Pros of managed services

  • Extensive expertise

Companies providing managed IT services are staffed with IT specialists who excel in the most diverse technology, tools, and domains. By leveraging their profound knowledge and vast experience you can introduce best practices and new trends as well as ensure the achievement of your business objectives.

  • Ability to focus on critical tasks

By outsourcing your non-critical functions to a managed service provider, you can enable your in-house team to concentrate on your company’s core competencies and critical tasks, while driving your business growth.

  • Flexibility

Managed service providers are able to adapt quickly to the changing needs of their clients. They can ramp up or down a team, extend a set of provided services, customize them, and come up with on-demand services.

  • Access to advanced technologies

Managed service providers make significant investments in advanced technologies, ensuring that their clients have access to the latest software and hardware. Obviously, it improves productivity and drives innovation.

  • Cost savings

Managed services are usually provided on a subscription or pay-as-you-go model, allowing businesses to drive down expenses on IT infrastructure and staff. This is especially beneficial for companies on a tight budget who cannot afford to establish and maintain corresponding in-house departments.

Cons of managed services

  • Limited control

The fact that your managed service provider takes on the full accountability for the management of a particular IT function or process relieves your burden but on the flip side, it deprives you of control over day-to-day processes and decisions.

  • Dependency on a service provider

By outsourcing IT functions, a business consequently becomes dependent on a managed service provider and its performance. If your provider experiences downtime or certain operational issues, it can affect your business operations as well.

  • Loss of in-house expertise

While managed services simplify your operations, they can lead to a situation where your in-house team may become dependent on external support, lacking the specialized knowledge needed to operate autonomously.

  • Security concerns

As a rule, cooperation with a managed service provider suggests granting them access to your IT infrastructure and sensitive data. If your partner does not have solid security measures in place, it can expose your business to compliance problems as well as lead to data breaches.

  • Quality risks

Again, service quality varies from provider to provider. Therefore, you should be careful while choosing a partner. Check reviews and portfolio as well as insist on providing a POC.

IT Staff Augmentation vs. Managed Services: Comparative Table

Now that you know everything about both approaches, let's structure our knowledge and compare them.

Criteria
Staff Augmentation
Managed Services
Goal
To reinforce an in-house team.
To entrust specific responsibilities and tasks to external experts.
Expertise
Brings in specific skills needed for particular task execution or project development.
Offers access to extensive expertise across the most diverse IT areas.
Flexibility
Highly flexible, giving an opportunity to easily adjust team size and composition.
Provided services can be adjusted with regard to client needs.
Control
A business manages augmented staff on its own, having complete control over them.
A business entrusts management of its particular tasks or processes to an outsourcing partner, which results in lax control.
Cost
A business is charged monthly based on the hourly rate of each augmented specialist.
A business is charged on a subscription or pay-as-you-go model.
Duration
Particularly suitable for short-term tasks but can be used for long-lasting ones as well.
Suggests long-lasting partnership with ongoing IT support and maintenance.
Knowledge sharing
Facilitates knowledge sharing as external staff introduce new practices and bring new knowledge that in-house teams adopt.
Does not foster knowledge sharing and may result in a loss of in-house expertise.
Team
Augmented staff join an internal team and closely collaborate with it.
A team of a managed service provider works autonomously.
Responsibility
A business holds the responsibility for the project outcomes.
A managed service provider is responsible for the quality of delivered services and solutions.

Wrapping up: Staff Augmentation or Managed Services?

Staff augmentation and managed services help companies to work smoothly and complete their projects successfully. Still, the former is better to choose if you want to control everything on your own, require flexibility, and have short-term needs, while the latter is more suitable for businesses that need ongoing assistance and would like to outsource entire projects. So, staff augmentation vs managed services is not a difficult choice if you understand the concept behind each approach and know your own needs and priorities.

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