If you are about to start a major project and your existing team is already stretched too thin, outsourcing provides a short-term solution to close skill gaps and meet immediate staffing needs. There are two main options available: staff augmentation and managed services. The question is, which solution is the best fit for your specific project?
To help make this determination, you can follow along with this staff augmentation vs. managed services comparison. It delves into the unique benefits of each outsourcing strategy, including when each option may be suitable for your business needs.
Staff Augmentation vs. Managed Services: What Are They?
Staff augmentation and managed services can help with software development and meeting your core business needs. Each strategy supports your in-house team, but the approaches are very different. Learning the basics of staff augmentation vs. managed services is a great place to start.
What Is Staff Augmentation?
Staff augmentation involves hiring external professionals or teams on a temporary basis to supplement your existing workforce. You can use the outside team members to tackle specific project requirements and support your internal staff members.
These professionals work under your direct supervision and integrate into your organizational structure to fulfill specific roles or projects. The staff augmentation model is particularly useful when you need to quickly scale your team for a project or fill skill gaps without committing to long-term hires.
There’s a common misconception that staff augmentation is only for short-term projects. However, this model can be tailored to your specific project needs. Top talent providers can connect you with skilled professionals for extended periods so you can complete long-term projects.
What Are Managed Services?
Managed services refer to when you outsource the management and responsibility of a specific function or process to a third-party service provider. A managed service provider (MSP) is an entity that offers outsourcing support. The MSP assumes full responsibility for delivering and managing the specific needs that you delegate to them.
Some of the specific tasks and workflows that you can delegate include:
- Cybersecurity
- Software updates and patches
- Data backup and recovery
- Network monitoring
- Cloud monitoring
While MSPs don’t take over entire projects or augment your IT team, they can lighten the workload of your full-time employees.
So how do you know that the MSP will handle all of their IT outsourcing responsibilities up to your standards? Enter the service level agreement (SLA). The SLA is a binding contract used by IT service providers to outline the minimum service you expect and identify the metrics by which their performance is measured.
Comparing the Two Models
Here are the key differences between managed services vs. staff augmentation:
Flexibility
Staff augmentation offers exceptional scalability. You can scale resources up or down based on project demands. If you need specific skills for an upcoming project, the provider can assign professionals with those talents to your team. If you don’t need as much support on your next endeavor, they can scale back support to provide cost savings.
Managed services also offer flexibility in terms of service delivery and scalability. With managed services, you can adjust the scope of services as your business needs evolve without the hassle of hiring or laying off staff.
Costs
Both solutions are cost-effective but in different ways. The managed services model uses tiered pricing based on the number and complexity of the responsibilities you are outsourcing.
If you outsource additional internal processes, the MSP will increase your monthly pricing. The predictable costs of managed services make it an appealing option for businesses looking to become more cost-efficient.
Staff augmentation offers lower costs than adding to your internal team. You pay for services only when needed, which can be great for meeting short-term needs. Using augmented staff offers indirect savings as well. For instance, you can avoid the costs associated with recruiting employees, advertising vacancies, and postponing projects due to worker shortages.
Level of Control
With staff augmentation, you maintain direct control over the selection, management, and direction of the augmented staff. They integrate with your development team, meaning you have complete control over their daily work. This ensures that your IT needs are met.
Managed services offer less control over the business operations that you outsource. These agreements focus more on service outcomes than direct oversight.
Security
Security is a critical consideration for both models. Staff augmentation requires robust internal security protocols to integrate external staff securely, providing direct oversight of data handling and access. Make sure that your augmentation partner thoroughly vets its team members so you can reduce the risk of data breaches during important IT projects.
Managed services also come with some security concerns. You will be reliant on the provider’s security measures and compliance with industry standards. It’s vital that you implement specific SLAs and partner with reputable providers.
Project Duration
Staff augmentation is ideal for completing short-term projects or closing specific skill gaps. You can add external professionals when you are taking on time-sensitive initiatives. You can also extend contracts based on specific project needs.
Managed services are suited for long-term initiatives or ongoing operational needs that benefit from continuous support. This model provides stability and consistency in service delivery over extended periods. Contracts and SLAs usually include a 12-month term, but some MSPs offer shorter and longer agreement options.
The Pros and Cons of Staff Augmentation
Staff augmentation provides numerous benefits. You can tap into immediate talent and access specialized skills that are critical to your development process. Augmentation is also incredibly flexible, enabling you to adjust your needs from one project to the next.
However, you must proactively manage augmented staff. They are your responsibility. If you scale up your development team without also expanding your leadership staff, managing your augmented personnel may become burdensome and time-consuming. Ensure that you have the bandwidth to manage additional employees.
The Pros and Cons of Managed Services
Managed services offer the advantage of outsourced management and expertise. You will enjoy predictable costs and can focus on core business activities. The MSP will ensure your IT infrastructure is secure and functional. MSPs also reduce the burden on your internal team while ensuring the consistent delivery of services in accordance with your SLA.
However, you will experience reduced control over operational details. You will be more dependent on external providers for service delivery. Before outsourcing to an MSP, make sure that giving up some control and direct oversight aligns with your IT needs.
When to Choose Staff Augmentation
Staff augmentation is ideal in scenarios where you need specific skills or expertise for a limited duration. If your business experiences fluctuating demands that require rapid resource adjustments, staff augmentation provides a flexible solution. It is also a cost-effective option compared to long-term hires. This makes it suitable if you are facing budget constraints.
For example, suppose that you are starting a short-term project that requires specialized IT skills. You don’t need those skills after you complete the project, so hiring a permanent team member doesn’t make sense. Staff augmentation allows you to quickly bring in the necessary talent without a long-term commitment.
When to Choose Managed Services
Managed services are a good option when you need long-term support and want to reduce the administrative burden on your internal staff. If you have a skilled team that is simply bogged down by daily IT tasks, consider managed services.
Hybrid Approaches: Combining Both Strategies
The staff augmentation vs. managed services debate does not have to be an “either-or” conversation. You can outsource some IT tasks via an MSP and use augmentation to meet fluctuating talent needs. A hybrid approach provides the best of both worlds, enabling you to remain flexible and agile in the rapidly evolving software space.
Which Option Is Right for Your Business?
Now that you know the difference between staff augmentation vs. managed services, the question is: which solution is right for your business? There aren’t any one-size-fits-all answers. By understanding the benefits and considerations of each approach, you can make informed choices that optimize efficiency and reduce costs as your company evolves.
