Companies of all sizes and skills are being pushed to create digital goods, apps, websites, software, and more as part of the digital transformation.
Most of these companies specialize in a single sector and lack the necessary IT departments or personnel to take on projects of this nature. There are, however, options, as there are various types of external recruiting modes.
Staff augmentation and managed services are two of the most common types of collaboration. Although SA and MS have proven to be time and cost-effective solutions, there are significant differences between them.
We'll go over their main points and contrast staff augmentation vs managed services. As a result, selecting the best type for your ongoing projects will be much easier.
What Is the Difference Between a Staff Augmentation Model and a Managed Services Model?
Staff augmentation refers to the process of expanding an existing department by hiring additional resources to work on a project. It is a type of temporary employment that will end when the case is completed. Businesses choose this type of collaboration when they do not need to hire someone on a long-term basis.
Another type of outsourcing practice is managed services, which entails hiring a fully-equipped organization of professionals who will be in charge of maintaining and supporting the case.
When the project is completed, the customer is billed for the on-demand service performance.
So the distinction between these two types is as follows: Unlike the SA model, which allows you to expand your in-house team with additional skilled resources, the MS model requires you to hire the entire team, for example, if you do not have an internal IT department.
Let's take a closer look at the upsides and downsides of these two modes and compare managed services vs staff augmentation.
Principles of the IT Managed Services Model
The IT managed services model is a customer-driven and strategic partnership in which a third party provides specific expertise, technologies, and processes to achieve the desired outcome.
This hiring model allows you to recruit an entire team of experts with the requisite expertise and experience, as well as all of the project's technical resources.
Companies thinking about hiring a third-party contractor to handle particular projects should weigh the following factors:
- Reliability: Make sure you can rely on your new partners; request daily updates and analytical stats to keep track of the project, and make sure your partner follows the agreed-upon plan.
- Background: look into the partner's previous experience, contact their customers, or read the reviews to ensure you're hiring a professional and experienced team that will handle your project from start to finish and deliver a high-quality product.
- Prices: review the pricing policy and ensure that there are no hidden costs so that your company does not incur additional expenses.
When you choose managed services as a hiring format, the success of the project is entirely dependent on your partner. The company assumes complete responsibility for the project and ensures that it is completed within the timeframes specified and within the budget.
Pros and Cons of IT Managed Services Model
By using Managed Services as a hiring model, you gain several benefits that will benefit your company and ensure a successful project outcome. Let's go over the model's advantages and disadvantages in detail.
Pros of Managed Services model:
- Time and cost-effectiveness: The MS model helps you to recruit an entire team of qualified and seasoned professionals with all of the requisite tech tools and resources to work on your project. You save time, money, and effort because you get everything you need in this manner. Their programs have a set price that is determined by the amount of work completed.
- Control: A service provider oversees the project from start to finish. However, it is critical to choose an established and dependable company that has a track record of delivering high-quality goods and excellent performance.
- Monitoring: During the project, the supplier tracks all procedures and ensures that all appropriate equipment and services are available.
- Outcome: The outcome of the project is determined by the vendor. MS company estimates all risks and has a suitable project schedule.
Cons of Managed Services model:
- Accountability: Make certain that you choose a reputable organization. Before choosing a vendor, read the reviews of previous customers, contact them, and learn more about the business, how it operates, and so on.
- Costs: It is not always possible to obtain a complete set of tools and resources for a low price. Some of them have higher fees. Extra costs are the customer's responsibility if a vendor makes a mistake or fails to meet the customer's expectations.
Outsourcing Model of Staff Augmentation
The staff augmentation model is used when it is necessary to temporarily involve outside staff to increase your company's capacity to develop new products or upgrade existing ones.
In this case, the project's outcome is determined by your in-house team, while temporary staff provides the necessary input. So, when do businesses consider using Staff Augmentation? Here are some of the reasons:
- Increased capacity: there is a need to increase the company's efficiency to complete daily tasks during a project run;
- Bridge to hire: if you have recently relocated to a new location or launched a new product line, you can use SA while hiring permanent employees;
- Specialized skills: the ability to find the right resources to cover specific tasks for a short period of time;
- Strategic planning: staff augmentation is a quick way to hire a flexible team of experienced professionals to help you be more agile, and increase speed to market, resulting in gaining an advantage over your competitors.
While staff augmentation is a temporary solution, it provides multiple benefits and adds value to businesses that consider this mode of talent outsourcing.
Pros and Cons of the Staff Augmentation Model
The staff augmentation model, like the MS model, has advantages and disadvantages. Companies can face SA disadvantages if they choose the wrong form of outsourcing that does not meet their needs. Let us look at the model from both sides.
Advantages of the staff augmentation model:
- Cost-effectiveness: With staff augmentation, you only pay for the expertise and time spent on the job that is needed. There is no need to retain full-time workers in permanent positions and pay high annual taxes when additional services are only needed for a limited time.
- Flexibility: you can easily obtain missing capabilities and expertise, as well as cover personnel shortages caused by unforeseen incidents during the project's execution.
- Control and risk reduction: SA enables you to control the project's outcome and track every step of the process. The project manager of the team will assign tasks accordingly to ensure that the final product is of high quality. When you outsource to a third-party vendor, you give up ownership of the production processes; however, with SA, you house the entire team in your company and oversee the project, lowering the risk of delivering a subpar product.
- Simple employment: you simply sign a contract with one or more employees who will provide you with the requisite skills during the development process.
Disadvantages of staff augmentation model:
- Reliance on third-party providers to help you find the right talent, which can have an impact on your plans;
- Inability to find a single person with all of the necessary qualifications, experience, and expertise. Hired employees can require some time to thoroughly research your product before joining the team and providing you with a high-quality product. It means you'll have more time to devote to recruiting and educating new employees.
- Not ideal for long-term projects because augmented workers can leave before the project is completed, and you will have to restart the hiring process any time anyone quits.
- Outsourcing is becoming more common, but finding a committed external development team may be difficult. There are numerous companies that offer their services, and it can be difficult to choose, particularly if you have never collaborated in this manner before.
We, at Otimbi Labs, are a leading outsourcing provider and IT solutions company well known for delivering high-quality results with great value for our clients. At Otimbi, we offer creative and personalized solutions for your business across multiple platforms, 24/7, with no hassle.
Contact us to learn all you need to know, from pricing to post-project support, so your team can reap the full benefits of outsourcing software development.