Remote work is the genie that you cannot put back inside the bottle now – it’s out, and the trend is rising exponentially. This shift towards remote work has opened up innumerable opportunities for companies to find resources from a global talent pool.
Not only this, but businesses now prefer to outsource entire projects to other companies instead of hiring in-house talent. All this is evidenced by the rapidly expanding outsourcing market, which is currently worth $260 billion and is expected to double by the end of this decade.
Business outsourcing is a broad term that encompasses many outsourcing models. Two of the most popular models are staff augmentation services and managed services. Each model has its pros and cons.
This article explains the top differences between staff augmentation and managed services.
Let’s discuss Staff Augmentation vs. Managed services and their respective benefits.
What is Staff Augmentation?
Staff augmentation, also known as resource augmentation, is a hiring strategy whereby businesses hire talent from third-party vendors temporarily. These resources can be onshore, nearshore, or offshore. Hiring reasons include supplementing an existing team, filling in temporary vacancies, or acquiring the missing skill set to bolster your in-house team’s overall capabilities.
IT staff augmentation refers to hiring top IT talent from across the different options (onshore, nearshore, and offshore). Whether you want to hire a data analyst or a software developer, resource augmentation is an excellent way to quickly augment your team’s capabilities without handling all the complexities of the hiring process.
All you need to do is contact the right staff augmentation vendor for your needs – that vendor is responsible for providing the resource(s) to you.
Benefits of Staff Augmentation
Let’s talk about some of the benefits of staff augmentation now.
- Access to Specific Skill Sets – one of the best things about augmenting your staff through this model is that it provides you with access to individuals with specific skills. Whether it’s IT security, Salesforce development, or Flutter app development, you can find just about the right resources for your requirements using this model.
- Speedy Hiring & No Recruitment Burden – another great benefit of resource augmentation is that it takes a lot less time to deploy the required resources than hiring them yourself. Therefore, you don’t have to go through the recruitment burden as vendors have these resources readily available, saving you precious time and dollars!
- Knowledge Transfer – when you hire external experts to supplement your team capacity, an amazing opportunity for knowledge transfer arises. Your in-house team can then learn specific tricks of the trade from the external resources. Staff augmentation best practices are very beneficial for your company.
- Fulfillment of Temporary Needs – perhaps the greatest advantage of resource augmentation is that you can fulfill your temporary hiring needs without getting into long-term and costly employment contracts. This could be due to an in-house employee going on vacation, a sabbatical, or a peak in workloads due to high demand or tight deadlines.
- Quality Resources – staff augmentation service providers possess high-quality technical and IT resources because they have very strict assessment and evaluation processes. These resources thus provide reliability, high-level skills, and the necessary support to the teams they join temporarily.
What are Managed Services?
Managed services are a popular business project outsourcing model whereby companies outsource certain operations to third-party organizations called managed services providers (MSPs). While staff augmentation refers to having a resource or set of resources join you temporarily, managed service providers typically take control of an entire function or operation.
For example, a company can either hire a cybersecurity professional temporarily for its in-house needs – which is staff augmentation – or it can outsource all its cybersecurity-related tasks to a managed service provider – which refers to managed services.
Managed service providers can take over database administration, ERP implementation and management, software development, and much more.
Benefits of Managed Services
Let’s look at some of the benefits of managed services.
- Project Management Expertise – managed services providers excel at project management, a critical skill for meeting tight project deadlines. These companies have all the relevant resources needed to manage and execute your project on time and within your budgetary constraints. You don’t have to hire an expensive in-house project management team for your projects.
- Skills & Expertise – again, the benefit of choosing a managed services provider is that you don’t have to create an in-house team with a specific set of skills. Instead, you can just choose a managed service provider to look after certain company operations, ready to work the moment you sign the contract. No training or additional costs.
- Focus on Core Business – when you outsource important business operations to a reliable MSP, you get the time to focus on more strategic matters related to your business. For example, you can spend time working on improving your sales and marketing team while the MSP looks after your IT software development.
- Access to Latest Tech Stacks – most of the leading MSPs already have access to the latest tools and technologies. As a result, you don’t have to pay for any ownership costs and can still benefit from cutting-edge technology.
- Resource Replacement – in case a resource from your MSP’s team resigns, it is their headache to ensure a replacement as soon as possible. This ensures that your involvement is not required to ensure project continuity.
Differences Between Staff Augmentation and Managed Services
Understanding staff augmentation vs. managed services requires a comprehensive knowledge of both models. Here’s a table that can help you understand the salient differences between managed services and resource augmentation.
| Aspect | Staff Augmentation | Managed Services |
| Scope | Hiring external resources to meet the needs of your in-house team. The resources work with your teams and are usually hired through a third-party vendor to fulfill some temporary need or bridge a skill gap. | On the other hand, managed services are to outsource an entire function, operation, or project to an MSP, which is responsible for planning, executing, and maintaining the operation. |
| Control | You get complete control over the resources you hire. The resource follows your directions and integrates with your team, even if working remotely. | Here, the MSP has more control than the outsourcing company. Although you lay down your expectations and operational goals, the MSP decides how to achieve them. |
| Responsibility | You are responsible for managing the external resources. The resource is answerable to you for their performance. However, if the said resource does not meet your standards, you can change the vendor or ask for a replacement. | An MSP is responsible for the end-to-end management of its resources that work on your project or business operations. It is the managed service provider’s responsibility to meet your project goals and deadlines. |
| Costs | Costs are typically incurred on an hourly, weekly, bi-weekly, or monthly basis. You have the flexibility, therefore, to scale up or down as needed. | Managed service providers offer a subscription or a fixed-price model. The costs are based on the services delivered and not the number of hours worked. |
| Duration | Short-term or project-based duration, allowing for greater flexibility. | Long-term and on an ongoing basis. It also offers scalability and flexibility. |
| Specialization & Expertise | You hire these temporary resources for the specific skill sets they possess. | These are not stand-alone resources but entire teams with specialized skills and expertise. |
Conclusion
To wrap it up, both staff augmentation vs. managed services offer unique business benefits to companies in an ever-evolving business and technology landscape. The model you choose depends on your business requirements.
If you’re looking for something long-term, go for managed services. If you want a temporary solution to your staffing needs, staff augmentation is the best option for you.
Xavor offers both models. We have expertise in a wide range of IT services – Managed Cloud Services, BI & Data Analytics, Mobile & Web App Development, PLM solutions, and much more.
Drop us a line at [email protected] to explore how Xavor can help you meet your business goals more efficiently.