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Which Is Better For You: Managed Services or Staff Augmentation?

managed services May 5, 2023

Outsourcing of IT projects is often done with the addition of people as needed. You make the decisions on what to do, how to do it, and when to do it under this paradigm. You must have an established leadership structure on your side for this to work.

The portion of Managed Services when you take control of the whole process is much more constrained.

You may concentrate on running your business while having confidence that the supplier will handle providing the IT services you need. The supplier is accountable for ensuring that services are provided in accordance with industry standards.

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Staff Augmentation: What Is It?

Employers temporarily hire outside workers under the staff augmentation outsourcing business model to swiftly increase the capacity of their present workforce.

You may scale your team up or down in response to demand by using talent that is onshore, nearshore, and offshore.

Businesses in the IT sector may employ staff augmentation for a number of development-related tasks, including programming, workflow optimization, quality assurance, and quality control.

As a consequence, you may get over certain obstacles, hire crucial personnel your team might be lacking, stay within a limited budget and timeline, address defects, and quicken the product launch.

IT staff augmentation agency saves money and gives your company flexibility. It's often a short-term fix that enables you to make the most of your current team and resources while gaining access to outside expertise and lowering operational expenses.

Managed Services: What Is It?

According to the managed services model, you should work with a partner who has a broad range of responsibilities. A provider manages all aspects of IT, offers advice on a range of business issues, and handles a number of administrative tasks including recruiting, maintaining infrastructure, monitoring, and reporting.

Managed services and employers of record corporations are often confused. In order to be clear, an employer of record is an outside company that handles all matters relating to human resources, such as payroll, tax computation, and benefits. This service provider might also take care of additional related issues while minimizing your paperwork.

Which Should You Choose Between Managed Services and Staff Augmentation?

You might be wondering which is better for you: managed services or staff augmentation? Let's take a look at the pros and cons of each option.

Flexibility

A certain amount of flexibility is provided by both managed services and employee augmentation. You will get the most from staff augmentation if you are working with an internal team that needs extra assistance or specialized knowledge. You may adjust the size of your team using this outsourcing strategy to suit your demands.

You may carry out activities or build projects with managed services without hiring internal experts. However, MSPs typically charge a retainer fee, and it's possible that they won't let you scale your team up or down as needed.

Costs

You just have to pay for the hours your extra staff works for you when you use staff augmentation. Both large corporations and small and medium-sized businesses with limited resources may find this useful.

However, managed service providers need a consistent investment. They often charge on a yearly retainer basis. This might be a very economical choice if you don't have an internal IT staff. The cost is typically higher than staff augmentation.

Amount of Control

If you select staff augmentation over managed services, you have a lot more control over the process. Your current team may be expanded via staff augmentation, and you can take an active role in the project development process.

A managed service provider keeps in touch with you often. On the other hand, you have far less influence over regular procedures and activities.

Security

In both outsourcing models, it is essential to thoroughly vet professionals. Staff augmentation presents fewer potential risks, which you can easily cover with an NDA.

Meanwhile, managed services demand that you divulge private data to a third party. When hiring a managed services provider, you should also discuss intellectual property rights to avoid paying for a project that you will not retain the rights to when it is finished.

Project Timeline

In short-term, low-budget, and flexible projects, staff augmentation is a practical and economical solution.

While managed services can help reduce costs over a longer period of time, they are better suited for long-term requirements and the outsourcing of entire projects.

When you're deciding which option is right for your company, consider the following:

  • Manage the entire project. If you want to keep control of every aspect of the project, including staffing and communications with vendors, then managed services may be better suited for your needs.
  • Hire a dedicated team but manage the project yourself. If you want access to skilled resources without having to manage them directly (and potentially paying more money), then this option might be best for your business.

This option allows for flexibility in terms of how many hours or days per week each team member works, for example, some may work full-time while others only work part-time, and it also means that those individuals are always available when needed rather than having their availability limited by their other commitments (such as school).

The Best Approach for Implementing Managed Services or Staff Augmentation in Your Business

As we've seen, there are many factors to consider when choosing between managed services and staff augmentation. The best approach for your business will depend on the size of your company, how much time you want to devote to managing technical support, and what kind of skills are needed in your business.

If you're a small-to-medium sized business (SMB), then staff augmentation is likely the better option for you because it is more flexible and can be scaled up or down as needed.

On top of this flexibility advantage, SMBs may also find that hiring a full-time employee would be cost prohibitive due to high cost per headcount, the average annual cost per employee in an SMB is $34k!

But if you do decide on managed services over staff augmentation, make sure they're customized according to your needs so that they don't become too expensive over time (and remember: always negotiate!).

The Future of Managed Services and Staff Augmentation

As the use of AI and automation becomes more prevalent, it will be important for companies to ensure that they have data security in place. This means that they must ensure that the people working on their projects are fully trained in how to handle sensitive information, as well as any other relevant policies and procedures.

In addition, it's important for businesses to have flexibility when it comes to staffing: if a project requires someone with specific skillsets or experience levels (like knowledge of a particular software), then having access to those resources can make or break your project's success rate, and no one wants that!

Finally, we'd like you all to know that there are many ways in which managed services can help companies grow their businesses without adding overhead costs associated with hiring full-time employees who may not always be needed full time anyway.

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Conclusion

The debate between staff augmentation and IT-managed services has no clear winner.

These approaches, which vary in terms of scaling options, the length of the collaboration with a BPO provider, and the degree of control, all meet various business objectives.

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Zoi Kotsou

Copywriter - Content writer - Content Creator - Columnist

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