Many companies today outsource tasks to focus on core operations and scaling. However, not everyone knows that outsourcing comes in different types, each with its advantages and disadvantages. Understanding these can help you choose the model that aligns with your business goals. In this blog post, we will explore what is the difference between staff augmentation and managed services, the two most popular outsourcing models.
Staff Augmentation And Managed Services
When we talk about outsourcing, we mean getting tasks done by outside experts. But outsourcing is a name for a whole group of frameworks from staff augmentation to managed services.
Staff augmentation means hiring external help to extend your current team. For example, if this is DevOps staff augmentation, you bring in specialists with skills in DevOps but manage them as part of your in-house team. This model keeps you in the manager’s role — you direct the project’s course as you usually do.
Managed services, on the other hand, means you’re handing over entire projects or specific operations to an external team. This team is a service provider that manages itself. It brings both manpower and technology to the table. It offers expertise but doesn’t imply direct management.
Pros and Cons of Staff Augmentation
The best way to understand the difference between managed services and staff augmentation is by reviewing the pros and cons associated with each approach. So, let’s start with the advantages and limitations of augmented staff.
Pros
- Large Choice of Talents
Through team augmentation, you’re handpicking experts from a global talent pool. Need a developer proficient in a new coding language? Or a designer who specializes in emerging UX trends? You won’t be limited by geography when hiring them.
- Seamless Integration
Augmented staff would normally slot in with your existing team. They adopt your tools, attend your meetings, and contribute to your projects as if they were hired full-time.
- Cost-Effective Skills
You only pay for what you need. This approach sidesteps the long-term financial commitments of full-time hires, such as annual salaries, benefits, and pensions.
- Control
Augmented staff follow your lead and align with your quality standards. There are good guarantees that the project remains true to your original vision.
- Low IP Risks
Augmented professionals work under the same data protection and confidentiality agreements as your full-time employees.
Cons
- Short-Term Focus
The model shines in sprint scenarios but might not be very suitable for long-term projects. It’s designed for immediate, flexible support, not necessarily for building the foundational team that will drive your company’s growth over the years.
- Training Required
Augmented staff will need a ramp-up period to fully understand your company’s workflow, culture, and specific project nuances. This requires time and resources.
Pros and Cons of Managed Services
Now, you must have a better idea of the managed services vs staff augmentation differences but we still need to review the pros and cons of the former to see the big picture.
Pros
- Complete Teams
Having a whole team at your disposal instead of assembling it piece by piece can be a serious plus. The framework allows you to work with a cohesive unit, seasoned in working together.
- No Training Needed
Outside teams come fully equipped with their processes and technology. This may be especially good when you need the project to kick off without delay.
- Tech Access
You also get access to the latest technology and methodologies. This can be a game-changer for some projects.
Cons
- Control
The flip side of delegating is the potential reduction in your control over how tasks are executed daily. This means your project takes a slightly different path than you’d envisioned.
- Specification Challenges
Communicating the full scope and nuances of your project to an external team can be very difficult. You’ll need a good communication plan for that.
- Conflict Risks
Whenever multiple parties collaborate, there’s a chance for misunderstandings or differing opinions on the project’s direction. Delegated services are no exception. To use this approach effectively, you’ll need to show excellent diplomacy and conflict-resolution skills.
- IP Risks
Handing over the reins to an external team involves trusting them with your intellectual property. While contracts and NDAs provide legal protection, the inherent risk of sharing sensitive information with an outside entity remains a consideration. In effect, this is one of the major reasons why many companies choose augmentation after evaluating the staff augmentation vs managed services model implications.
Factors to Consider When Choosing the Right Model
If you are considering IT staff augmentation vs managed services, here are four major aspects to reflect upon.
- Flexibility
Augmented staff is about quick adaptability and scaling to project demands. It’s ideal if you anticipate changes or need to adjust team size frequently.
- Cost
Delegated services might seem pricier upfront but consider the value of an all-in-one solution versus piecemeal hiring. Team augmentation can be more cost-effective for specific skill sets or short-term needs.
- Level of Control
If you want to maintain direct oversight, augmented staff is more favorable. Delegation, in turn, requires trust in the provider.
- Project Duration
Short-term or variable projects align well with team augmentation. For ongoing operations or projects with a clear, long-term scope, managed services might be more suitable.
Final Thoughts
If you are deciding which outsourcing model will best meet your project’s specific needs, evaluate your desire for control, costs, and management aspects in the first place. Team augmentation offers flexibility and control for short-term projects. Managed services provide a comprehensive, self-managed team for larger or longer-term initiatives.