Introduction

Countless outsourcing models have emerged as software development outsourcing has gained popularity as an alternative to in-house development. The two most well-liked approaches are staff augmentation and managed services. Both involve hazards, as well as advantages and disadvantages. 

What are managed IT services? What exactly does the term “IT staff augmentation” mean? What distinguishes them from one another and how can you choose one that is appropriate for your project? Exactly that is what we shall cover in the following. Regarding these two types of software development outsourcing, we will offer thorough solutions to these and many other crucial topics.

What is Staff Augmentation, A Short Guide!

A great number of information technology (IT) departments have turned to staff augmentation agreements with IT service providers or direct contracts with independent contractors in recent years. They choose this path in an effort to increase their agility, address short-term capability deficiencies, and accommodate the effects of hiring restrictions. This method provides a lot of benefits over the alternative of directly recruiting personnel as a temporary tactic. 

The tremendous expansion of the adoption of contingent employees by businesses throughout the world is one of the most important developments in today’s industry. The practice isn’t very new; it basically started when administrators borrowed from other organizations to temporarily cover responsibilities due to absences, sickness, and the like. Today, contingent labor may take many different forms, with staff augmentation being the most popular.

Staff augmentation is a very widespread practice, it is estimated that the worldwide staffing market, one of the main sources of talent for staff augmentation, supports $490 billion in yearly spending. Freelancing, which has been established for centuries but has only lately acquired popularity due to the growth of international freelance platforms, is another source of staff augmentation expertise. In the US, 34% of employees are thought to freelance, and over the next ten years, that percentage is anticipated to increase gradually.

What are Managed IT Services and How Do They Work?

 In a managed service agreement, the managed service provider is still in charge of the equipment and IT service’s operation, and the consumer normally pays a monthly fee to use the service. The goal of all managed IT service products, which come in a wide variety of forms, is to relieve the client of the responsibility of managing IT. A customer gains from predictable pricing and the flexibility to concentrate on important business issues rather than tedious IT management tasks in a successful managed services contract.

One typical kind of managed IT service is the remote management and monitoring of servers, desktop computers, and mobile devices. A managed services provider’s core, foundational provision is frequently remote monitoring and administration. There is fierce rivalry and pressure on profit margins because there are several managed services provider companies that provide this service.

Basic managed services becoming commodities has forced managed service companies to customize their offers. Managed security services is one of the most common directions. Customers are requesting more and more help from service providers with IT security. In order to deliver cybersecurity services, service providers are either building managed security service practices or collaborating with security vendors.  

Cloud services have become a part of managed IT services as a result of the development of cloud computing. For instance, service providers could concentrate on infrastructure as a service (IaaS), offering managed public cloud services alongside cloud providers like Amazon Web Services (AWS), Google, and Microsoft. Additionally, service providers may promote managed platform as a service (PaaS) services or collaborate with software as a service (SaaS) suppliers like ServiceNow in the service management industry and Salesforce in the CRM industry.

Pros and Cons Of Staff Augmentation

In order to satisfy skill shortages and tap into external expertise, organizations are increasingly turning to staff augmentation as a preferred alternative. In this post, we’ll examine the benefits and potential drawbacks of staff augmentation in the context of the current fiscal year.

Potential Benefits of Staff Augmentation 

Enhanced Flexibility and Scalability 

Unmatched flexibility is provided by staff augmentation, which enables businesses to swiftly adjust to shifting business requirements. Staff augmentation gives you the flexibility to quickly grow or reduce your workforce, whether you need more personnel for a brief project or to scale up your team to handle rising demand. 

Access to a Pool of Specialized Skills 

Accessing the correct individuals with specialized knowledge is essential in today’s fast-paced and specialized industries. Businesses may access a wide range of talent through staff augmentation, as well as individuals with specialized capabilities. Augmented team members bring special talents to the table, whether it be in the form of cutting-edge data analytics, cutting-edge technology, or specialist marketing techniques.

Cost-Effectiveness Aspects

Staff augmentation can be less expensive than conventional hiring techniques. Businesses may save money on hiring, onboarding, training, and employee perks by utilizing augmented workers. The organization can save money since augmented personnel are already competent and experienced and need less supervision and ramp-up time.

Time-to-Market Practices 

Speed is key in today’s competitive environment. Organizations may shorten project timescales by promptly bringing in qualified personnel thanks to staff augmentation. Companies may overcome workforce shortages, decrease project delays, and enhance their time-to-market, gaining a competitive edge, by integrating augmented workers seamlessly into their current teams.

Potential Drawbacks of Staff Augmentation 

Integration Hurdles 

There may be difficulties fitting additional workers into current teams in terms of communication and coordination. To guarantee smooth cooperation with in-house personnel, it could be necessary to put out more effort given the varied histories and working styles of augmented experts. To promote efficient integration, adequate communication channels and team-building exercises are crucial.

Knowledge Transfer and Retention

Due to the frequent temporary employment of expanded employees, there is a chance of knowledge gaps and a loss of long-term institutional memory. By putting in place effective information-sharing procedures and documentation, organizations must proactively address difficulties with knowledge transfer. This encourages constant learning throughout the organization and guarantees the retention of important information.

Cyber and confidentiality Threats 

Concerns concerning data security and confidentiality arise when using external resources in staff augmentation. Depending on the scope of the project, augmented personnel can have access to confidential data, proprietary information, or customer information. To properly limit these risks, strict security measures, non-disclosure agreements, and data protection policies must be established.

Dependency On External Resources  

While staff augmentation provides rapid access to specialized expertise, relying too heavily on outside resources might prevent internal talent from developing. Utilizing additional people while also investing in the development and skill-upgrading of internal staff members is a delicate balance that organizations must achieve. This guarantees a long-term personnel plan and lessens reliance on outside resources.

Pros and Cons Of Managed IT Services 

Employing a managed IT services provider might have a number of advantages for your company, but it also has disadvantages. Here are the main advantages and disadvantages you should be aware of if you’ve been debating whether or not to outsource your IT requirements to another business.  

Potential Benefits Of Managed IT Services

Cost-Effectiveness

Reduced operating expenses for organizations are one of the major benefits of managed IT services. By choosing a managed IT services provider, you can immediately stop spending money on things like purchasing new gear, training IT workers, paying the wages of in-house IT specialists, and other charges. 

Knowledge and Skills 

You outsource your company’s demands to experts who have received the necessary training to give an ever-deepening degree of knowledge when you sign up with a managed IT services provider. This enables you to maintain your competitiveness since you will have access to their limitless experience. 

Security Breaches 

Although security breaches are more common than ever, outsourcing your IT requirements to a supplier gives you access to professionals who are knowledgeable on the most recent defenses. Since security measures are provided to make sure your company complies with security requirements, this will help lower the chances of data breaches.  

24/7 Availability 

The fact that managed IT service providers are constantly on hand to handle problems that can negatively impact your company is another benefit. In contrast to an internal staff that has set office hours, managed IT services providers are always accessible, which helps to increase up-time. 

Potential Drawback Of Managed IT Services 

Loss Of Dedicated IT Team 

Every business is unique. By using a provider’s services, you are giving up the chance to have an IT staff that is solely focused on your company and is familiar with its quirks and idiosyncrasies. This might restrict how effectively the provider can satisfy your IT needs.  

Physical presence 

When you sign up with an MSP, you decide to let another business remotely handle your technology. This implies that you will be responsible for handling the majority of any on-site problems yourself.  

Scope

A managed services company seldom handles every single area of technology, in contrast to an internal IT team. When you require help for more than the programs you signed up for, you might have to select from a list, which means you’re probably on your own.  

Security And Control 

You grant access to the private information and data that power your company when you engage a provider’s services. This can be a problem if the nature of your company places a high value on data security and information control.  

How and Why Managed IT Services Are Better Than Staff Augmentation? 

Managed services and staff augmentation are two types of IT outsourcing. They enable businesses to cover skill gaps without having to assemble an internal staff. Additionally, they provide all the observable advantages of IT outsourcing, such as cost savings and technology advancement, among many other advantages. Despite the fact that managed services and staff augmentation appear to have comparable goals. They are both quite dissimilar from one another. The primary point of distinction is the promise or offer made to clients. 

Managed services are provided to handle tasks like cybersecurity, cloud infrastructure management, etc., or to take on full-fledged roles. With staff augmentation, the customer is guaranteed a certain amount of hours with a certain employee. While managed services promise to maintain a feature, a service, or a level of quality that is specified in the contract. For instance, a software developer for staff augmentation may work 30 hours per week on a program. In contrast, managed services allow the service provider to handle the entirety of a task, such as cloud services, IT service management, etc. 

Locking The Thoughts 

Managed services and staff augmentation are two IT outsourcing methods, as was previously noted. They make it simple for businesses to fulfill their operational and resource needs without setting up an internal workforce. Each type has advantages and disadvantages of its own. What is a fundamental shortcoming for one paradigm may be a strength for another. The decision must thus be based on the circumstances. Staff augmentation is great when our needs are modest in scope and can be satisfied quickly. Managed services, on the other hand, provide long-term operational process management.