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“IT managed services vs. staff augmentation” are topics connected with outsourcing and outstaffing, which have become drivers for any business today. According to Grand View research, the global IT services market is expected to rise at an annual growth rate of 7.7% from 2023 to 2027.

Whether you're looking for long-term IT support or need to scale your team quickly, this article will help you choose the right approach. We will dig deeper into the difference between staff augmentation and managed services. You will explore their features, benefits, drawbacks, and use cases. We also will touch upon the roles of outstaffing and outsourcing models, discussing their impact on your business success.

Managed services vs. staff augmentation: what do they mean?

What is a managed services model?

The managed services model is a business relationship that involves delegating particular IT functions or operations to an external service provider, allowing businesses to outsource these tasks to a trusted third party.

Imagine a world where your IT infrastructure's day-to-day management and maintenance are smoothly taken care of by an experienced team. With IT-managed services, this is as simple as that.

A third-party provider will handle your tasks. Using a managed services model, you can delegate functions – usually, the vendor's project manager controls everything, including finding the necessary tools and resources. You only need to define requirements in Service Level Agreement (SLA).

By entrusting your IT operations to a specialized managed service provider, you will focus on your strategy, not system monitoring, backup and storage options, security, software updates, and all network tasks and other permanent issues. Your IT environment will be very well-organized and work toward a winning strategy. It's like having a dedicated IT department but without extra costs and unnecessary hardships.

You can entrust any part of a company's infrastructure, even business-critical ones. What’s critical for business? You can determine yourself. The generally established opinion is that a client company can be outsourced to everything except for direct core functions.

What is staff augmentation?

Staff augmentation is a flexible approach where companies hire external professionals or teams for a short period to fill skill gaps or meet project needs.

Sometimes, your organization may require additional IT expertise to tackle specific projects, bridge skill gaps, or accommodate sudden surges in workload. Obviously, you want to avoid long-term commitment and expenses associated with traditional hiring. That's where staff augmentation comes into play.

By augmenting your existing IT team with external professionals on a temporary or project basis, you gain access to a pool of workers who bring fresh perspectives, specialized skills, and the ability to hit the ground running. This flexible approach allows you to scale your internal resources immediately and meet project requirements effectively.

The staff augmentation process includes the following stages:

• Identifying skill gaps.
• Vendor selection from multiple options (including specialized staffing agencies, freelancers, or independent contractors).
• Onboarding and integration.
• Project execution.
• Ongoing management.

Managed services model vs. staff augmentation: what are the benefits?

Benefits of a managed services operating model

For many businesses, managed services providers are an effective way to operate better than competitors. Before the pandemic, many companies considered moving to a managed services operating model. Even now, this option is on the front page because it offers more than significant benefits.

• Reduced cost. Managed service providers offer flexible pricing models, allowing companies to pay for only the needed services without hardware and software investments. You also can save money on hiring and training an in-house team.
• Security. In order to save sensitive data, IT managed services employ robust cybersecurity measures – firewalls, intrusion detection systems, data encryption, and regular security audits.
• Technical expertise and management resources. You have access to a development team of highly skilled and certified professionals. The expertise can be leveraged to address complex technical challenges and implement new technologies.
• Proactive monitoring and maintenance. Managed service providers employ advanced monitoring tools and proactive maintenance practices to identify and address potential IT issues before they become significant problems.

Benefits of staff augmentation model

Now we will bring you up to speed with the benefits that business gains from using the IT staff aug model.

• Scalability. With staff augmentation, companies can quickly scale their IT teams up or down based on project requirements.
• Access to specialized skills. The right talent with advanced skills is always available at the right time.
• Cost-effective solution. You can save on the recruitment process, training, and employee benefits while still having access to highly skilled professionals who can contribute immediately.
• Complete control and collaboration. Staff augmentation allows you to maintain control over its projects. The new external employees collaborate closely with the in-house team and follow the company's established workflows.
• Reduced time-to-market. The company can meet strict deadlines and accelerate its development process and bring products or services to market much faster.
  

Staff augmentation and managed services: what are their typical examples?

Examples of IT-managed services

IT-managed services embrace a wide range of offerings that provide comprehensive outsourcing of various IT functions and operations. Let's explore some examples of IT-managed services companies commonly leverage to enhance operational efficiency and focus on core business objectives.

• Network infrastructure management. A managed services company oversees and maintains a business's network infrastructure, including routers, switches, firewalls, and wireless networks. This ensures network availability, optimizes performance, and implements security measures.
• Cloud services. You gain cloud-based solutions, such as infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and software-as-a-service (SaaS). They manage and monitor cloud environments, providing businesses with scalable and cost-effective IT resources.
• Data backup and recovery. To protect critical business data, a third-party vendor performs regular backups, tests restoration processes, and ensures data integrity during system failures or data breaches.
• Help desk support services. A managed services company addresses IT-related queries, resolves issues promptly, and provides a reliable point of contact for permanent employees seeking assistance.

Examples of staff augmentation

Here are some examples of how businesses utilize a staff augmentation approach.

• Software development. Many companies turn to this approach to hire specialized software developers or testers with key skills to supplement their existing team and meet project demands. This allows them to handle increased workloads, develop new features, and work on multiple projects simultaneously.
• Cloud computing. As businesses migrate their operations to the cloud, they often require new team members with expertise in cloud technologies – cloud architects, engineers, or administrators.
• Project management. Staff augmentation enables you to hire experienced project managers to oversee planning, resource allocation, risk management, and coordination among various stakeholders.
• IT support. Organizations may utilize staff augmentation models to enhance their IT support capabilities, helping desk professionals to provide remote or on-site support, troubleshooting technical issues, and ensuring smooth operations.
• Data analysis. To bolster analytical capabilities, companies can leverage staff augmentation to hire data scientists or analysts. These professionals bring expertise in data mining, statistical analysis, and data visualization.
• Cybersecurity. Staff augmentation allows businesses to augment their cybersecurity teams with professionals specializing in network security, vulnerability assessment, incident response, and risk management.

Key difference between managed services and staff augmentation

Let's review the table below to compare staff augmentation vs. managed services.

Now, let us turn your attention to the core. As you can see from the table, staff augmentation offers greater control and flexibility, with you retaining direct supervision and resource management responsibilities. It is well-suited for specific project needs or short-term resource gaps. Managed services provide comprehensive outsourcing of entire functions or operations, relieving you of resource management and offering specialized expertise. It is ideal for long-term engagements and complex offloading operations.

One of the key benefits of IT staff augmentation is the heightened control you gain over your external team members. This control empowers you to guide their efforts. You can harness their expertise and drive your projects forward by keeping these talented professionals within your influence. Yet, it's important to tread cautiously, as increased control also demands heightened supervision and management overheads.

While the expertise of external team members holds immense potential, they must first navigate your unique processes and organizational culture. The smooth integration of workers with diverse skill sets and backgrounds can be challenging, notably if your company needs a well-organized framework.

Service-level agreements (SLAs) are rock-solid foundations, delineating the expected level of service quality and ensuring a seamless project execution. However, sometimes some moments surpass the boundaries of conventional agreements – your unique needs call for customized solutions. In these instances, managed services are not a better approach.

Final takes

There you have it – everything you need to know about managed service vs. staff augmentation. These distinct approaches present you with choices that can shape the future of your business.

If you intend to outsource entire projects, consider the managed services model. But if you want to supplement the existing workforce quickly, opt for staff augmentation. Since both approaches are practical and cost-savvy, they will live up to your expectations and help you succeed in your goals.

However, what if you’re looking for a loyal partner that can provide diverse skills to support your product development efforts and guarantee high results. In this case, project outsourcing might be the best choice for you to stay agile, competitive, and ahead of the curve.

Still, trying to figure out where to begin? Contact our Factor Dedicated Team now!

FAQ

What is staff augmentation services?

Staff augmentation services refer to a practice where companies add their existing workforce with external professionals to fulfill specific needs. It involves hiring temporary or contract-based specialists with the desired expertise and integrating them into the team.

What is another word for staff augmentation?

Another term commonly used to refer to staff augmentation is "staffing augmentation" or simply "augmented staffing." This concept centers around the idea that a company can immediately expand its workforce with external resources.

Different types of staff augmentation services include:

• Temporary staff augmentation.
• Contract staff augmentation.
• Project-based staff augmentation.
• On-demand staff augmentation.
• Remote staff augmentation.

By leveraging them, companies can sort out problems – short-term workload spikes, filling skill gaps, managing specific projects, and accessing additional resources.

What are the 4 types of outsourcing?

The four types of outsourcing include Business Process Outsourcing (BPO), Information Technology Outsourcing (ITO), Knowledge Process Outsourcing (KPO), and multisourcing. They enable businesses to focus on the core while delegating non-core functions to external partners.

What is the difference between BPO and managed service?

The key difference between BPO and Managed Services lies in the scope and level of control. BPO typically involves outsourcing entire processes, while Managed Services cover specific organizational functions or areas. BPO often involves a higher degree of operational control transfer, while Managed Services maintain a closer collaboration between the company and the service provider.

What is a managed services business model?

This model involves the transfer to an outsourcing company of a part of the typical functions of the IT department of an enterprise that requires round-the-clock support. Almost all IT functions can be transferred: management of local networks, virtual private networks, security systems, telephony, data centers, various applications, etc.

What is an example of a managed service?

An example of a managed service is managed IT services, where a company outsources the management and support of its IT infrastructure and systems to a managed service provider. This includes network monitoring, security management, software updates, and technical support. The service provider monitors the day-to-day operation and maintenance of the IT environment, ensuring its smooth and efficient functioning.