Staff Augmentation vs Managed Services: Which is better?
Staff augmentation allows companies to reinforce their team with additional professionals with specific competencies. They work as a normal employee, but for a fixed period of time. Managed service providers work autonomously to fulfill their responsibilities. One is hands-on, while the other is more independent.
Here you will find a summary of the main differences between staff augmentation and managed services.
What is Staff Augmentation?
Staff augmentation is a flexible outsourcing strategy that allows companies to hire technology talent on a project basis. This model is often used to fill gaps for companies that do not have long-term hires. For example, if a company wants to integrate AI into its operations but lacks the necessary skills, it can augment its team just for this task.
While this approach is ideal for short-term needs or specialized skills, it can also work for the long term. If a talent is the right fit, he or she can easily become a full-time hire. In addition, you can adjust the size of the team based on project requirements.
What are managed services?
Instead of individual engagements, managed services involve outsourcing business operations to another team. Companies hire outside experts to handle specific tasks. These can range from IT support to cybersecurity.
This model offers continuous, long-term support. It shifts the responsibility for certain IT tasks to an external provider so that companies can focus on their core business.
Main differences between Staff Augmentation and managed services
Let's take a closer look at the main differences you should consider when making a decision.
Control and management
Staff Augmentation allows you to maintain control of the project. The reason is that the augmented staff works under your direction, maintaining your influence over the progress and direction of the project. This model is like temporarily augmenting your internal team, allowing you direct supervision.
Managed services relinquish control to the service provider. They manage the outsourced function with their methods and processes. This setup means you rely on their expertise to achieve the project objectives, reducing your day-to-day involvement. The hands-off approach is a good thing if that's what you're looking for.
Cost structure
Staff augmentation services follow a pay-per-use model, which means that you only pay for the hours worked by the talent.
Service providers typically use a fixed or subscription-based pricing model. Basically a price is agreed upon for services rendered over a period of time. Costs are predictable, but less flexible than in the case of Staff Augmentation.
Flexibility
As mentioned above, Staff Augmentation offers great flexibility, as you can quickly expand the size of your team according to project requirements.
In contrast, managed services often tie you to a contract. This limits your ability to adjust quickly to changing needs. This configuration can offer stability, but may not be best for projects with fluctuating demands.
Skills
In both options, you can access the skill sets required to meet your needs. The main difference in this regard between Staff Augmentation and managed services is that with Staff Augmentation, you rely on the individual's skill set. Service providers are teams, so they have multiple professionals and resources to manage any project.
But if the scope of the project is defined, then the augmented staff will have just the skills you need.
Duration
Staff Augmentation basically consists of reinforcing your team for specific projects. Therefore, it is often used as a short-term solution.
Service providers tend to be more long-term partnerships. Companies opt for managed services for ongoing support and maintenance, and offer a strategic solution for functions they prefer to outsource on an ongoing basis.
However, both options can work in the short or long term.
Responsibilities
The differences will depend on the degree of involvement the company wants to have in the project. Staff Augmentation means that the responsibility for the results of the project remains with the company.
Companies may also decide to transfer responsibility for the success of the project to the supplier. They may be responsible for the delivery of the agreed services and results.
The pros and cons
When it comes to IT, most companies end up needing an extra hand. As companies evolve, so do their IT needs. At that point, choosing between Staff Augmentation and managed services is key.
That decision will be defined by the pros and cons of each solution. Consider the main differences. Staff Augmentation gives you more control and flexibility, but the skill set you gain depends on the people you hire. Managed service providers have all the skills and resources you need to solve complex problems, but sacrifice control and flexibility.
Pros and cons of Staff Augmentation
Pros
Flexibility: Scale the size of the equipment as needed.
Access to competencies: Quickly hire specific experts.
Integration: External staff joins internal teams.
Control: You supervise the project and the staff.
Profitability: Pay only for the work needed.
Speed: Fast configuration and start-up of projects.
Cons
Short-term approach: Best for temporary needs.
Training needs: Some guidance is required.
Process integration: It must fit into existing workflows.
Management overload: Requires supervision.
Variable costs: May increase with the scope of the project.
Dependency: Depends on the availability of external talent.
Pros and cons of managed services
Pros
Experience: Access to a team of specialists.
Concentration: Allows you to concentrate on your core business.
Predictability: Fixed costs to facilitate budgeting.
Efficiency: MSPs offer streamlined processes.
Technology: Access to the latest tools.
Long-term assistance: Continuous and reliable assistance.
Cons
Less control: MSP leads the project.
Fixed contracts: Less flexibility to change scope.
Integration problems: May not be combined with in-house equipment.
Security issues: Sensitive data is handled externally.
Communication: Less frequent updates.
Costs: Potentially higher for long-term services.
Choosing between Staff Augmentation and managed services
With the differences in mind, here's what you need to consider to determine which type of service best suits your needs.
Scope and duration of the project
The first thing to do is to understand the scope and duration of the project. Then you will know if you need a short or long term solution.
Control and integration needs
In this phase, you must define how much control you want to have in the project. A member of the Augmentation Staff will work as a normal full-time employee under your direction. You dictate the direction and execution of the project. In comparison, managed service providers handle all operations. They work autonomously, relying on your expertise.
Flexibility and scalability
Flexibility and scalability are crucial factors that should not be overlooked. If the demands of your project evolve, making it necessary to expand the size of the team quickly, Staff Augmentation is ideal.
If you want a structured service, a provider is the best fit. Managed services have a more fixed structure, usually tied to long-term contracts. This arrangement may offer less immediate flexibility, but ensures consistent support over the long term.
Costs
As with any other business project, budget is a deciding factor. Staff Augmentation is more cost-effective because it avoids the long-term financial commitments of hiring full-time employees or managed services.
The second option could mean overpaying, as companies pay for a full team of professionals with a long-term commitment. If there has to be a change, there is not much to do.
Skill requirements
Evaluate the skills required for your project. Staff Augmentation is ideal when you need to quickly fill a specific skills gap. For example, cloud technology or big data.
Managed services are most appropriate when the project requires a wide range of skills and expertise that a single provider can offer.
The following steps
Now that you have compared Staff Augmentation versus managed services, you need to find a high quality partner you can trust. The success of your project will depend entirely on the quality of the professionals and services they can offer you.
Regardless of the solution you choose, Ancient offers the best IT talent and managed services. Leading fintech, banking, insurtech, healthcare and telecommunications companies trust us to augment their teams and develop custom software solutions that drive real impact.
Tell us about your project, and we will provide you with the perfect solution to fit your budget.
