Demand for qualified IT specialists and skilled laborers is growing faster than ever. Digital transformation also pushes IT enterprises to look for optimal solutions to meet critical projects. To grow their business faster, IT companies go for two of the best models such as staff augmentation and managed services.
However, companies don’t want permanent or long-term resources for short-term projects. This is why enterprises trust staff outsourcing models. The staff augmentation model means adding external resources to the existing team. Managed service means a third-party agency that manages customers’ IT requirements, and expected outcomes.
Comparison between staff augmentation and managed services
| Comparison | Staff augmentation |
Managed Services |
|---|---|---|
Best for |
Short-term projects |
Long-term projects |
Risk |
Client |
Service provider |
Engagement |
Full-time |
Part-time/full-time |
Processes |
Responsibility to giving an input |
Responsibility to delivering an outcome |
| Management | Client |
Service provider |
Pricing level |
Pricing based on availability and days or hours worked |
Pricing based outcomes and service levels |
Staff Augmentation and its Pros
With the IT staff augmentation model, IT enterprises can retain project autonomy. When enterprises choose the staff augmentation model, they can get some benefits.
Retain Project Control
The staff augmentation service helps IT companies to keep complete control of projects. Only a job of this outsourcing model is providing qualified candidates for a short-term or particular project. The hired resource will act as a team member until the completion of projects.
Reduce Cost and Increase Output
Hiring new resources can drastically increase expenses, including the cost of further office space, software, hardware, and more overheads associated with the full-time resource. Cost-cutting is a huge advantage of the IT staff augmentation model. Cost-effectiveness is a primary reason most IT enterprises look to outsourcing intentionally.
The in-house team has to be paid every month. IT companies also have to provide additional perks to the in-house teams. These overheads issues will create unwanted buzz when a small-scale IT company hires an in-house employee for short-term projects. Having an inexperienced in-house team is also a problem when it comes to completing an important project. Staff augmentation can rescue any size of IT company by providing skilled, experienced, and opted human resources to the need of companies.
Lesser Legalities
Staff augmentation agencies take care of their employee’s taxes, payroll, and other benefits so IT companies. There are no legal issues in hiring staff augmentation instead of a full-time resource. Staffing agencies only get paid basis on projects or hours.
Cons of Staff Augmentation Model
Suits only for Short-term IT support
Staff augmentation is a phenomenal solution for small-scale IT companies only. Most large-scale IT companies always keep bigger projects in hand so that they don’t go for staff augmentation models. All the bigger IT companies have skilled resources to handle all types of projects.
Requires Management Resources
Staff augmented resources will be under the management of the IT company. It might be the right choice when companies don’t have a vision of huge achievements in the future.
Managed Service and its Pros
A company that outsources some IT processes to another company is called managed services. It’s also a popular outsourcing model.
Retain the focus on Operations
When managed services offer their project management operations, the parent IT Company can step back and focus on its other services. Managed service team takes care of technical functions and project development, while parent company involves themselves in other activities.
Effective time management
If an IT company hires in-house employees, they need more time to manage projects. Managed service companies contain a lot of skilled resources so choosing managed service outsourcing model helps complete IT processes quickly as possible.
Most small-scale companies face lacking technical expertise and other management resources. Managed service can be a practical solution for companies looking for a short-term or long run team of experts.
Cons of Managed Service
Higher Cost
Since managed service model covers both project management and IT functions, the expense of handing over processes to other IT companies may be higher than the staff augmentation model.
Loss of Autonomy
Managed service is not the best choice when IT companies need full control over the projects. IT industries can only expect outcomes from a reputed managed service.
Conclusion
In this digital era, IT companies want to commit to suitable software outsourcing models to meet their project requirements. Both staff augmentation and managed services are working well. Most small-scale companies would like to choose a staff augmentation model which is slightly better than managed services.
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