Managed Services Vs Staff Augmentation

15 Nov · 6 min read

Managed Services Vs Staff Augmentation

In a global economy characterized by instant communication and cutting-edge technology, staying competitive is both necessary and difficult.

But what should a company do if it lacks the necessary internal resources to address a problem?

If you hire an in-house team, you risk devoting too much energy, time, and money to recruitment rather than project completion and launch—significantly if your project is growing quickly and has a short timeline.

As a consequence, an increasing number of organizations seek IT outsourcing solutions. In this area, there are two well-known options: staff augmentation and managed services. Both the SA and MS models are viable alternatives to a full-time in-house team, but which model is the most effective depends on the type and size of your project.

In this article, we compare staff augmentation vs managed services and discuss their relative benefits and drawbacks to determine which solution is superior.

Let's take a closer look at these two approaches now.

What is Staff Augmentation?

Due to a lack of available human resources to complete their projects, IT companies often choose a staff augmentation model. This type of BPO service provides clients with the expertise and skill sets needed to meet their business objectives. Furthermore, staffing firms can easily find the developers your company is missing - or say good-by to them once the work is completed. As a result, executives can benefit from the model's flexibility by scaling the team up or down as needed. Another important distinction is that, unlike traditional outsourcing, the client company adjusts capacity and retains control over staff selection. As a result, by augmenting your staff, you can gain control of the situation and have more direct communication with the contractors.

Concerning the risks of augmented staff, it is critical to highlight the lack of dedication you receive from external employees. They lack a sense of ownership over your product and may be unconcerned about the future of your company. Furthermore, when viewed over time, the cost-effectiveness of such a model is called into question. Staff augmentation is ideal for short-term projects, but it incurs additional costs when working with a vendor on an ongoing basis. As a result, you will be required to pay a service fee, commissions, or a buy-out fee to keep the developers on board for a longer time.

What are Managed Services?

Collaboration with a managed service provider has distinct advantages. For example, it gives you access to a wide range of skills and knowledge that are relevant to your goals. Furthermore, such a partner not only manages hardware or software but also assists in the development of a comprehensive business idea. This task is accomplished through close communication with the client and frequent consultations. As a result, this model is also a time-saving solution.

It does, however, have some drawbacks. The first and most serious risk of managed services is the provider's dependability. Similar to outsourcing, losing control of transferred processes, even the most critical ones, is easy. Finally, by delegating a great deal of control, keep in mind that you are responsible for all unexpected outcomes. Furthermore, this solution is not known for being cost-effective. Make no mistake: partnering with an MSP is costly due to upfront investments and ambiguous pricing, which combines all payments into a single category called "provider fee."

So now we will look at Staff Augmentation VS Managed Service Providers in greater detail.

  • Pocket-Friendliness vs. Specific Results

The parent company's goal is the first and most important distinction between the two.

Businesses can choose between the two models based on their preferences. Staff augmentation enables a capital-efficient staffing model, significantly lowering operational costs. It is the best option for businesses looking to expand their business scope while remaining cost-effective. Furthermore, if the company has specific needs, it should consider Managed Services. These businesses collaborate with MSPs to achieve specific objectives. MSPs then have control over the process to be used to achieve the desired results. As a result, staff augmentation achieves the cost-cutting goal, whereas managed services encourage the achievement of desired results.

  • Accountability vs. Flexible Hiring

The two IT outsourcing models have distinct advantages and disadvantages. Staff augmentation enables the parent company to conduct the hiring process quickly, i.e. on the fly, while still meeting the project's requirements. The parent company's ability to hire staff for short periods demonstrates the model's flexibility. MSPs, on the other hand, place a premium on their accountability to the parent company. MSPs prepare a list of goals and objectives to commit to before entering into any partnership. As a result, MSPs are accountable for all commitments as well as timely delivery. As a result, these two outsourcing models address distinct sets of requirements. While staff augmentation provides a flexible model of expert supplementation, managed services ensure accountability and are accountable to parent companies.

  • Short term vs long-term relationship

Another distinction is the length of time they have been associated with the parent company. The relationship between the service seeker and the provider for staff augmentation is only temporary. The majority of this connection is transactional and fleeting. When the parent company drills for staffing assistance from staff augmentation firms, the relationship goes into hibernation. When a new need for staffing arises, the relationship is frequently resurrected.

MSPs, on the other hand, have a very close relationship with the parent company. This relationship is built on mutual trust and information sharing. The parent company is then dependent on the MSP for technical expertise and information dissemination. For both partners, the relationship between an MSP and the parent company is long-term and mutually reinforcing. As a result, staff augmentation provides short-term service while managed services foster long-term relationships.

  • Project Scaling vs. Operational Scaling

When it comes to scalability, both staff augmentation and managed service have advantages and disadvantages. Because of the increased demand for qualified professionals, IT staff augmentation has the potential to provide significant options for project scaling. Any additions to the current workforce are extremely beneficial in meeting the scalability requirements and demands. However, it does not provide any feasible solutions for scaling operations or sharing knowledge. Managed services, on the other hand, can provide full consultation when it comes to scaling operations. Adding responsibilities to an existing project is easier than forming a new task force. Despite its flexibility, the latter may be time-consuming if used continuously. As a result, the two models provide different scalability options to meet a variety of needs.

  • Authority vs Discretion

Though both models are equally weighted, the second major distinction between staff augmentation and managed services is the autonomy and discretion in project management and execution. In the case of staff augmentation, the parent company has a strong position in process management. As a result, the parent company retains the final say.

However, when we talk about managed services, we also mean the transfer of discretionary authority. In MSP, project autonomy is transferred from the parent company to the MSP. Management under staff augmentation is thus the responsibility of the parent company, whereas managed services delegate this responsibility to the MSP.

Final Thoughts

In our current reality, managed capacity vs. staff augmentation will be a valuable resource for achieving the best results. If you use these models correctly for your business, taking into account their benefits and drawbacks, you will not only achieve the desired success but also reach new heights. Understanding the distinction between staffed augmentation and managed services, as well as how to apply the models correctly, is critical.

In any case, these systems are not only popular but also important for development, as effective components for increasing your company's influence, because IT managed services vs staff augmentation demonstrated their strength rather than some virtual competition between them.

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