Staff augmentation and managed services are two IT outsourcing models. They help companies to fill their talent void without having to build an in-house team.
Further, they also offer all the tangible benefits of IT outsourcing including cost savings, and technological innovation, among many others.
Although the purpose of both staff augmentation and managed services might seem similar. They are both starkly different from each other. The commitment or the offer provided to clients forms the major point of difference.
Also, both models work at different levels helping their clients solve critical challenges. Staff augmentation offers to provide talent or resources that will complete specific tasks or projects.
Managed services offer to undertake full-fledged functions or handle processes like cybersecurity, cloud infrastructure management, etc.
Staff augmentation promises to provide a specific number of hours of specific personnel to the client.
While managed services offer to upkeep a function, a service, or a quality of service that is stipulated by the agreement.
For example, a staff augmentation software developer might develop a program for 30 hours in a week.
Whereas under managed services, an entire function like cloud services, IT service management, etc. might be handled by the service provider.
Broad Differences Between Staff Augmentation and Managed Services
The table below shows the broad differences between staff augmentation and managed services:
| Staff augmentation | Managed services | |
| Activity | Focuses on the bigger picture of a function | Focuses on completing specific tasks based on instructions or scope of work |
| Offered by | MSP (Managed Service Providers) | Offered by hires, personnel, talent, etc. |
| Training | PRovided by the MSP to their personnel | The hired personnel has to be trained on the client processes and work practices |
| Commercials | Charged as a monthly or project-based fee for a specific period | Charged based on the working hours * the number of personnel on hire |
| Coverage | Defined by SLAs (Service Level Agreements) | Defined by the scope of work |
A Closer Look at Staff Augmentation
In simple terms, staff augmentation can be referred to as hiring talent on contractual basis instead of building a permanent in-house team.
It allows a company to work with experienced specialists on a temporary basis.
In a way, it allows access to the best talent in the industry on an as and when needed basis.
This makes staff augmentation a perfect choice for projects that are short-term in nature and may not serve the business afterwards.
Pros of Staff Augmentation
- Complete project control
Staff augmentation helps retain complete control over the project. The client does not have to change deadlines, add or remove components, or modify workflows. This helps keep quality in check.
- Choice of experts
Staff augmentation gives access to top-notch talent from across the globe and at affordable commercials. The experts can also be handpicked based on their certifications, experience, special skills, etc.
- Short-term engagement
The personnel taken on hire can be engaged for the short term. Once the task completes, they can be relieved without any need for continued employment.
- Risk reduction
There is a significant risk reduction in staff augmentation since there is an employment contract, employer obligations, and so on that are otherwise required in a full-time employment contract.
Cons of Staff Augmentation
- Require stringent internal processes
Staff augmentation might sometimes involve working with people from other geographies and time zones. To keep the work progressing at a steady pace, it is necessary to establish stringent processes.
At each stage of the workflow, the specialist must know what needs to be done and how. Even the reporting process must be well-defined to avoid misunderstandings and misfires.
- Cannot expect loyalty from specialists
Since the agreement is for the short-term, and specialists are hired only for specific tasks without any further bearing, it is not plausible to expect loyalty from specialists.
They are hired talent and will have to be relieved of their duty once it is complete.
A Closer Look at Managed Services
Under managed services, a company outsources certain IT processes or functions to another company, usually an IT outsourcing service provider.
The processes outsourced include cloud infrastructure maintenance, security, backup recovery, platform migration, etc.
The managed service provider (MSP) has to operate based on broad parameters provided by the parent company.
They must comply with quality parameters and specifications as defined by Service Level Agreement (SLA).
Further, managed service providers usually have a project manager who oversees the overall program and ensures that the show runs without any bottlenecks or quality deviations.
Pros of Managed Services
- Bringing focus to operations
Managed services spares the executive team from having to focus on the day-to-day operations of the business.
They can focus on bigger strategic decisions that will drive the business forward. It gives them the liberty to set expectations which will be fulfilled by the MSP.
- Saves time and resources
Recruiting, training, assigning, managing — the whole circle of talent management can be eliminated with managed services.
It saves a lot of time and resources which can be fruitfully used for bigger priorities, like driving sales, improving offerings, challenging competition, etc.
Cons of Managed Services
- Expensive than staff augmentation
Managed services offer a lot more than staff augmentation. It is capable of reforming an entire function and process that cannot be possibly done with internal resources.
Staff augmentations bring a number of developers, managed services bring a whole team of experts and managerial staff for your service. As a result, it is also more expensive than staff augmentation.
- Compromised autonomy
Under managed services, it is necessary to give the MSP adequate control and autonomy to make critical decisions on everyday matters.
They cannot interfere in this decision-making process since it will slow them down and defeat the ultimate process for which they were engaged. This compromised autonomy is an inherent downside of managed services.
Bringing it all together
Like mentioned earlier, staff augmentation and managed services are two IT outsourcing models. They make it easy for enterprises to meet their resource and operational requirements without building an in-house team.
However, both models have their own pros and cons. What is an inherent strength for one model could be the weakness for the other. As a result, the choice is to be on a contextual basis.
When our requirements are of small scale and can be met in the short term, staff augmentation is ideal. On the other hand, managed services help with long-term operational process management.
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