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Staff Augmentation vs. Managed Services – Understanding the Differences

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Staff Augmentation vs. Managed Services – Understanding the Differences

Published: 2024/02/05

7 min read

What is staff augmentation?

Staff augmentation is a popular outsourcing model. It enables organizations to hire temporary workers, usually with specialized skills, to fill specific IT job positions. This approach provides increased flexibility, cost savings and control over project execution. As such, it’s an ideal solution for short-term needs and addressing gaps in the IT workforce.

What are managed services?

Managed services are IT solutions that provide long-term, committed services. These services are at a fixed price and usually involve outsourcing IT functions to a service provider. The model is great for fostering IT planning documentation and knowledge. It also offers a variety of extra benefits.

Unlike staff augmentation, managed services focus on strategic, long-term outcomes and value creation. Successful managed services have committed partners who share risks and value the creation of team building. These factors distinguish them from more temporary solutions like staff augmentation.

Staff augmentation and managed services: a comparative analysis

Comparing staff augmentation to managed services can help you choose the best model to align with your business needs. Software Mind analyzed the two models – staff augmentation vs managed services. So, What is the difference between managed services and staff augmentation?

There are many different types of outsourcing. Staff augmentation and managed services are simply two of the most popular, but despite their similarities, they address distinctly different needs. Noticeable differences include project durations, control preferences, level of commitment and costs.

Staff augmentation provides temporary solutions. These solutions provide quick access to specialized skills and offer flexibility. However, there are challenges, such as higher costs and the risk of knowledge loss.

Check out our guide to staff augmentation in Latin America to learn more about its promising advantages.

The managed services model presents a more sustainable solution. It comes with dedicated services and reduced costs. It is perceived as more strategic and outcome-oriented. This approach may bring longer-term value. Yet, there are many other factors to consider.

*Note: When comparing outsourcing to staff augmentation, consider the balance between in-house expertise and external support. Evaluating the advantages of IT managed services vs staff augmentation is always challenging. In our research, we looked at the scope and depth of each service. We asked ourselves which approach best meets IT infrastructure needs.

Advantages of staff augmentation

Staff augmentation is perfect for meeting short to medium-term needs. It involves temporarily adding resources to a team, with the aim to fill skill gaps or increase capacity. Meanwhile, clients retain direct control and responsibility for managing the augmented staff. Here are some of its advantages.

Project control

Staff augmentation provides a way of having more control over projects. It also ensures those working on projects are aligned with a company’s goals. By having more staff work in-house, clients can exercise more control over them. This means that an external team will work closely with your in-house team. They will adhere to internal working regulations and report directly to your managers.

Flexible deadlines

Project timelines can be stressful and challenging due to accelerated deadlines. Effective planning, communication and collaboration of staff augmentation can help. This approach brings with it agile methodologies. They can offer adaptability and flexibility to make the process more manageable. This approach enables teams to deliver better results, while minimizing the negative impacts of stress and pressure.

Internal processes integration

Staff augmentation integrates skilled IT resources into an organization’s existing internal processes. This approach promotes cohesion within the company. It also provides a flexible means of outsourcing IT resources. This process can also reduce a company’s expenses, time and effort.

Smaller projects

Staff augmentation can be more cost-effective. This is particularly true for smaller projects where outsourcing could come at a premium. The approach allows businesses to adjust their workforce according to their present needs. By hiring external professionals, companies can bridge any skill gaps. They can also gain fresh perspectives and access specialized knowledge and expertise.

Freed-up resources

Staff augmentation enables organizations to free up their in-house resources. This means businesses can focus more on their core projects without the distraction of external issues. As a result, this can lead to improved productivity, efficiency and better use of company resources.

Existing staff control

With staff augmentation, organizations can exercise control over their current staff. The same is true for their leadership and project priorities. This extends existing teams while allowing companies to participate more actively in project development.

Geography flexibility

Organizations are no longer restricted to hiring talent within their immediate geographical area. This is mainly due to the rise of technology and remote work which enables companies to expand their teams quickly while overcoming geographical barriers. This offers a flexible and reliable way to access top talent worldwide.

Streamlined recruitment

IT staff augmentation has become a valuable solution. With talent shortages affecting companies worldwide, it can bridge skill gaps. IT staff augmentation is an efficient hiring solution. It can save time compared to traditional hiring processes and provide companies with quick access to skilled workers. This simplifies and expedites the hiring process. This enables companies to onboard experts for their projects quickly.

Project scalability

In the staffing world, there is often a debate between staff augmentation and staffing, and one of the critical factors in this debate is scalability. Staff augmentation enables companies to ramp up their workforce quickly. Staff augmentation also allows them to scale down when the project is completed. This approach is often favored because it meets companies’ immediate needs. It does so without overstaffing or underutilizing resources. Traditional staffing can be more rigid. It requires companies to commit to a certain number of employees for a set period. This can make it challenging to adjust resources based on changing project needs.

Fewer permanent employees

Staff augmentation allows businesses to adapt to ever-changing business needs. This means covering employee leaves, addressing seasonal demands, or managing short-term projects without compromising productivity.

Advantages of managed services

Managed services means outsourcing specific functions or processes to a third-party provider, who assumes end-to-end responsibility for delivering the agreed-upon services under defined SLAs. They also often have more predictable pricing models. The benefits of the managed services model include:

Committed teams

Managed services usually guarantee the provision of particular services with a pre-agreed cost. This eliminates the ambiguity that can arise when it comes to budgeting and planning. This approach allows you to understand clearly the costs associated with the services you require and also ensures that there are no hidden or unexpected expenses.

Fewer risks

Managed service providers create an incentivized environment to work more efficiently and productively. This is because they take on delivery risks, which encourages the team to take calculated risks. The provider assumes the responsibility for any potential losses or damages that may occur during the delivery process. This arrangement also enables the provider to maintain control over the delivery process. It also ensures that it is executed in a manner that aligns with their standards and expectations.

Transparent costs

The managed services pricing structure is designed to be transparent and clear. Most providers can give you a detailed breakdown of the costs associated with each service. This way, you can easily understand what you are paying for. This allows you to avoid any confusion or surprise charges.

Improved IT operations

There are lots of benefits of IT managed services vs staff augmentation. It can significantly impact the overall IT operation model, both positively and negatively, which can result in an improvement or degradation of the IT operation model. Therefore, it’s essential to carefully consider and evaluate the influences and implications before implementing any changes.

Alignment and interconnectivity

This feature simplifies understanding the interconnectivity between various services, identifying their alignment with business requirements and determining their associated costs.

Balance of cost and quality

The managed services approach emphasizes the importance of balancing the expenses incurred and the quality of service provided. It promotes the idea of not solely focusing on costs. Instead, it tries to deliver the highest quality possible within the given budget.

Minimizes knowledge loss

Effective documentation practices play a critical role in retaining and sharing valuable knowledge. Managed services tend to document essential details, procedures and insights. Teams can use this to enrich their collective expertise. It preserves it and makes it accessible to all. Ultimately, this leads to greater efficiency, productivity and success.

Encourages issue resolution

Managed services are motivated to address any problems that may impact the quality or effectiveness of their offerings. They understand that poor performance can negatively affect their reputation and credibility. Therefore, they take proactive measures to identify and resolve any issues. This ensures that their customers receive the best possible experience and outcomes.

Data compliance

A company’s data is subject to a lot of regulation, which is in place to keep information secure. A managed services provider handles the complexities of compliance and auditing. This means companies don’t have to worry about violating data security regulations and saves in-house teams thousands of hours.

Which model should you choose?

Knowing the differences between managed service vs staff augmentation can help streamline the allocation of resources within your organization.

Choosing between staff augmentation and managed services depends on your company’s needs.

Staff augmentation might be preferred when:

  1. There’s a need for temporary or project-specific expertise.
  2. You want direct control over the augmented team.
  3. Flexibility in resource management and scalability is vital.

Managed services might be preferable when:

  1. There’s a need for outsourcing entire functions or processes.
  2. You want to offload responsibility for managing specific tasks or operations.
  3. Predictable costs and service level agreements are priorities.

Ultimately, the best choice will depend on factors such as the nature of the project, available resources, desired level of control and budget considerations.

About the authorSoftware Mind

Software Mind provides companies with autonomous development teams who manage software life cycles from ideation to release and beyond. For over 20 years we’ve been enriching organizations with the talent they need to boost scalability, drive dynamic growth and bring disruptive ideas to life. Our top-notch engineering teams combine ownership with leading technologies, including cloud, AI, data science and embedded software to accelerate digital transformations and boost software delivery. A culture that embraces openness, craves more and acts with respect enables our bold and passionate people to create evolutive solutions that support scale-ups, unicorns and enterprise-level companies around the world. 

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