Staff Augmentation vs Managed Services: What to Choose?

So, what should the company do if there are no internal resources to handle the growing scope of work? How to extend the team with top-quality resources at reasonable terms? In this article, we’ve compared staff augmentation vs managed services to determine the advantages of each model.

List of the Content

• Staff augmentation vs managed services: how to approach?
• What is IT staff augmentation?
• What are managed IT services?
• What is the difference between staff augmentation and managed services?
• Staff augmentation vs managed services: comparison
• Staff augmentation vs managed services: what to choose?
• Conclusion

STAFF AUGMENTATION VS MANAGED SERVICES: HOW TO APPROACH?

It is common when the company planning team extension or seeking assistance in non-profile areas evaluates different engagement models. After all, anyone who has ever been engaged in a time-sensitive project with significant financial investments understands the importance of a sufficiently staffed team. A lack of well-trained professionals can complicate even routine tasks. There is a slight chance of giving the complex and time-consuming job to a small team as everyone understands its direct consequences to the process efficiency and final results. Therefore, finding more specialists with the right expertise is always essential for businesses with rising demand.

Analyzing the available market practices, companies have a broader choice of adopting various hiring approaches. It becomes a flexible and effective way to apply for the services of third-party providers instead of filling full-time positions. It’s interesting to discover that external assistance can be required by almost every company at one or another stage of the workflow. The most well-known approach to external service methods is outsourcing, which often embraces various models. In short, IT outsourcing is a practice of delegating some components to others instead of relying on internal resources. It has become so popular that the revenue in IT outsourcing reached  $395 billion in 2022, with an annual growth rate of 8.26% for the following years.    

What’s more, types of outsourced services vary a lot, and you could find anything development implies: from application outsourcing to web hosting or administration outsourcing. Businesses have the possibility to outsource both the specific tasks as well as the entire process flow. That’s why their typical concerns often relate to finding a suitable model and arranging a smooth process flow for it.

When the company decides to get external assistance, it’s always worth considering several models. Like in the case of staff augmentation vs managed services, we’ll focus on a detailed comparison to broaden the understanding of each model.

The first misconception is that these terms are often used interchangeably. Of course, both models are related to leveraging external resources to complete the broader scope of the project’s tasks. However, staff augmentation and managed services remain different at their core. Serving the exact purpose of filling the resource gaps, they apply some opposed approaches to offering their services and arranging the delivery process.

Team augmentation involves the outsourcing model of hiring remote specialists to extend the existing team. It allows businesses to fill the expertise gaps and develop a partnership for set periods. This model is workable for short- and long-term engagements as it only depends on the rising needs of the client. The third-party contractor takes responsibility for offering required experts, whereas the client’s side is fully responsible for arranging and managing the augmented staff through the entire process. 

In their turn, managed services vs staff augmentation focus on engaging professional providers to cover some specific IT-related activities. The important thing is the service delivery goes in conjunction with other internal processes. It only requires partial engagement with the existing team, as the assigned specialists tend to work independently to handle the outlined tasks. It’s a great market practice to outsource such tasks as cloud infrastructure deployment, server administration, or data analysis to experienced providers. Often it’s related to complex and time-consuming tasks requiring specific expertise. It is more efficient and faster to apply for the experts in this area than retraining or extending the internal resources for these particular skills and expertise.

Defining the meaning of models won’t be enough for the comprehensive comparison of staff augmentation vs managed services. Therefore, we’re going to proceed with more details on each approach.

WHAT IS IT STAFF AUGMENTATION?

As mentioned above, the augmented team is one of the hiring options at the rate from one to several remote developers to the fully equipped team in the in-house office. The only difference is that, unlike regular hiring, team augmentation reckons only a temporary use of the resources, analogically to outsourcing.

“Why team augmentation?” you may ask. “Why not hire a few more people for the project on a permanent basis?”. That is simple: the business doesn’t need additional staff permanently. They look for highly-qualified and narrowly-aimed professionals for the work to be done or to improve what they have already started. Let’s consider some of the core advantages it brings.

• Filling the expertise gap – With the high demand for qualified professionals, it becomes harder and harder to involve the required experts. It especially refers to when the team looks for some rare expertise or needs specialist involvement for a specific period. Extending your team with augmented staff is a workable solution to gain expertise and not be limited to the terms of regular hiring. 
• Flexibility – Being adaptable in the business is sometimes even more critical than staying powerful. Flexibility is a great feature to help reach top lines in your business area. That is very simple to increase your team’s capacity with the augmented staff and remain scalable when required.
• Cost-effectiveness – What is the reason to pay for the additional workers annually if you need them only for a short period? With team augmentation, you pay only for the necessary work and the expected skills at the right time. By paying no full-time wages annually, companies save huge financial resources in short- and long-term perspectives.
• High-level control – Applying this model, it is clear how to maintain complete control of all the aspects of the project developed. The main thing is that it doesn’t differ from regular engagement. The project manager from the client side monitors and allocates available resources for each specific operation. Besides, they can assign tasks based on skill level, resource availability, and task priorities. Along with controlling the process, they embrace the quality control of the end product. 
• Lower risks – Augmenting staff allows businesses to apply one of the outsourcing models but still keep the entire process in-house. The client side continues managing all the engaged resources, holding the situation under control, and reacting to any rising issue.

Like any other engagement model, it is also accompanied by some possible disadvantages if not properly addressed:

• Project detail awareness – Finding the universal all-knowing specialist might be challenging, so the augmented staff may require additional detail sharing to get done with that or another task. Besides, proper project knowledge transfer is required for fast onboarding and better collaboration. 
• Management flows – If there are some drawbacks in the internal company management processes, it is impossible to address them with augmented staff. Indeed, the extended team requires additional attention and a total involvement with the rest of the in-house team. Great management brings all involved parties together to promote efficiency and improve the overall workflow.
• Not result-oriented – The key point is that companies leveraging augmented staff only get the resources. Ideally, the company is getting top-quality resources, but not the result. It remains under the client’s control to arrange the process and work toward the expected results.

WHAT ARE MANAGED IT SERVICES?

Contrary to the augmented staff, another method of outsourcing components of your project is managed IT services. It embraces such distinct characteristics as permanent control, feedback, and a high level of business adaptation. This model might require additional clarifications as it can be explained from several perspectives. The classic definition offered by analytic agencies and some vendors is that it involves services implying external control of the company’s non-profile systems. In this very context, the client is not only outsourcing the development components. It also delegates complete control of them. The third-party providers share responsibilities to maintain, support, and control business-affecting indicators, monitoring, and reports of assigned process components.

Let’s proceed to common advantages describing the model’s meaning closer. Also, we’ll see how it can differ in light of the staff augmentation vs managed services comparison.

• Time-saving – The primary purpose of managed IT services is to save clients time. Having available resources and extensive expertise, the provider can relieve the client’s team from complex tasks, excessive time, and often extra financial expenses. They bring their knowledge and skills to complete the assigned processes easily and in a shorter period.
• Stable control – These services are about both engaging the required workforce and finding reliable business partners. Along with transferring certain responsibilities, you should entrust your business processes to experienced and trusted providers. It eliminates the need to control everything on your own though remain the monitoring channels open for both sides. It increases the strategic value and allows teams to focus on other business tasks. Properly delegated processes help to reach better control through the entire workflow. 
• Improved pricing models – Companies can leverage flexible pricing models based on the number of chosen services or additional requested options. Often providers have preliminary formed prices for the standard service requests. The involved parties can negotiate individual prices in the case of big-volume or non-standard projects. However, the main benefit remains that the client pays for the services they utilize.
• Managed infrastructure – Taking full responsibility for the execution, the vendor is also responsible for managing the process. As for the client, only overall tasks and details are described; all the other management aspects are under the vendor’s control. It’s worth noting that this model is always result-oriented compared to only providing resources in team augmentation. 

The disadvantages of managed IT services are similar somehow to those related to team augmentation or outsourcing: risk, reliability, and sometimes management.

• Vendor reliability – There’s a common concern about engaging external resources and how reliable they turn at the end. It’s essential to look for trustworthy providers having extensive experience in the required domain to fill necessary expertise gaps. One of the efficient approaches to finding the right contractors and avoiding such risks is referring to recommendations, comments, and previous customers’ feedback.
• Higher costs – The managed service vendor can offer rare skills and/or technical equipment. However, all these instruments are not so simple, cheap, and fast to get. The qualified and experienced services could involve significant expenses. Of course, it is relatively cheaper and significantly faster than using in-house staff, but the price seems to be higher than for team augmentation. However, we shouldn’t forget the fact that comparing managed services vs staff augmentation, it involves more responsibilities and quite complex processes like data transfer, cloud infrastructure security, computing, etc.
• Strategic planning – It’s hard to benefit from any services if the business lacks a well-defined strategy. Therefore, it requires excellent specifications and avoiding outsourcing the wrong processes. The client has to specify their needs and find the right resources to address them. It’s always important to focus on future growth and what resources are best allocated for each specific component. That involves the efficient engagement of both internal and external resources for your business.

WHAT IS THE DIFFERENCE BETWEEN STAFF AUGMENTATION AND MANAGED SERVICES?

Gathering each model’s pros and cons helps get closer to the more detailed comparison of staff augmentation vs managed services. In fact, some fundamental differences are often turned into potential benefits for one or another company. Based on its contrasting aspects, teams have the opportunity to pick an especially suitable alternative to cover the project needs.

The option of delegating some tasks to other specialists apart from the internal resources has definitely changed the approaches to hiring required staff. More and more businesses have acknowledged that regular full-time engagement is more complex to arrange. Moreover, it usually costs more and only covers some of the defined needs. The good market practice of adopting more flexible service models considerably increased over recent years. With well-arranged models, teams have efficient outsourcing methods while meeting the outlined project expectations.

Comparing staff augmentation vs managed services shows that both models support access to a much larger pool of experts. The third-party providers can offer flexible approaches to partnering with qualified staff where agreement terms are negotiated based on the client’s needs. 

Team augmentation helps to engage qualified personnel in active collaboration with the existing in-house team. It’s a great alternative to regular full-time hiring, though it brings more flexibility. The augmented staff can be both fully involved in the processes and assigned to the specific scope of work. Moreover, the main benefit is that the partnership doesn’t rely on duration terms and can be adapted to the client’s needs. It doesn’t really matter if the team needs specialists for short and long-term cooperation. The service providers help to find the necessary staff resources, whereas the clients take on the responsibility of involving, managing, and controlling desired outcomes.  

Discussing IT staff augmentation vs managed services, we can observe the significant difference between them. Managed IT services are primarily about the possibility of completely delegating specific processes and tasks to an experienced team. This model doesn’t require project management or rigid controls from the client, as the service contractors are accountable for the process delivery and outlined results. It’s reasonable to share some tasks with experts in the required domain. Having specific expertise, they are more proficient and faster in addressing needs. There is no need to extend or retrain internal resources as managed service providers specialize in these tasks regularly. As a rule, these services involve such use cases as cloud infrastructure deployment, server administration, data transfer, performance analysis, etc. Leveraging managed IT services is outlined by more specific goals and comes with high expectations. It’s more about getting professional help and involving the full-fledged team to handle defined processes. The experienced specialists are more efficient and faster in delivering these services and providing the client with the final results. It doesn’t require the client’s engagement apart from receiving detailed reports and updates on the process implementation.

Therefore, services that seem similar at first are applied in different use cases. One of the business requirements is to understand the difference between staff augmentation and managed services to leverage them regarding the actual needs.

STAFF AUGMENTATION VS MANAGED SERVICES: COMPARISON

Continuing with the topic of staff augmentation vs managed services, we would like to find even more details on each model. Both approaches have seen wide adoption on the market. Regardless of the domain, businesses could adopt a different option, though make it highly beneficial for the project. The main thing is to clearly understand the engagement method and set the right expectations for the partnership outcomes.

Like with any other partnership, it should start with clearly outlined requirements and a full understanding of the available options. Based on rising needs, companies can refer to outsourcing service providers. Applying for a professional consultation and agreeing on the best suitable model is recommended. Many providers offer a wide variety of services, from team augmentation to managed IT services or project outsourcing. 

Discussing engagement models in detail reveals a number of essential aspects. It is obvious that they have broadly similar aims of providing top-quality resources for clients’ needs. However, the operational methods are quite different and delivered on contrasting terms. In order to make the right choice for staff augmentation vs managed services, it’s vital to specify your needs using the following aspects.

• The company size
• Capabilities of internal resources
• Project duration 
• Required operational method
• Management responsibilities
• Control capabilities
• Pricing models
• Future growth capabilities

Whereas this table can provide additional details as it contains some distinctive characteristics to help us make the managed services vs staff augmentation choice.

Focusing on all of these details enables making informed decisions and meeting the needs with a reasonable approach. Provided that teams know how to outline the requirements, they have no problems in choosing the outsourcing model. Careful analysis and strategic planning allow them to fill the expertise gaps, determine the contract terms, and gain more benefits. When the scope of work is smaller and requires only temporary involvement, it can be addressed by applying for team augmentation services. However, the complete implementation of the separate process component needs the engagement of the cross-functional team to share expertise and manage the operational model. Some companies also find it efficient to leverage several approaches for the projects. For instance, transitioning from staff augmentation to managed services has worked for many teams. They start with more simple tasks and then decide to delegate more responsibilities to third-party providers.

STAFF AUGMENTATION VS MANAGED SERVICES: WHAT TO CHOOSE?

It’s worth saying that it’s a common question to address when looking for professional help. External resources often become a reasonable solution to meeting a variety of needs. Applying for one or another engagement model allows achieving immediate results and streamlining the development process.

Qualified resources always remain a decisive aspect. A suitable cooperation model helps to embrace better results and develop successful partnerships. Businesses have to undergo a comprehensive requirements analysis before choosing any model. It helps to identify the resource gaps and possible ways to fill the expertise. 

After carefully considering staff augmentation vs managed services, we can see they suit different use cases. Let’s gather the common use cases to leverage these engagement methods. 

Team augmentation: use cases

• Specific skills – The developers of rare expertise are harder to find and often more expensive to collaborate with on a regular basis. 
• The in-house team reinforcement – Even though the company has great internal resources, they can benefit from temporarily involving additional expertise. 
• Tight deadlines – One of the strategic goals of team augmentation is to bring extra hands for faster process implementation.
• Long-term perspective – The model allows turning short-term employment into a longer partnership when required.
• Balanced budget – Temporary engagement allows balancing expenses as the companies pay for provided services and exclude regular recruitment and utility costs.

Managed IT services: use cases

• New technology adoption – Technology-powered managed IT services also embrace client-centric approaches to introduce advanced solutions. Along with detailed technical and business analysis, they focus on improving operational efficiency and enabling digital transformation.
• Proactive management – Besides filling the expertise, the managed service providers take full responsibility for overall process implementation and remain committed to delivering outcomes.  
• In-depth knowledge – Don’t underestimate the value of first-hand experience brought by leading providers. Specializing in a particular domain, they handle assigned tasks with the full knowledge required for it.   
• Future growth – Flexibility and operational speed have never been more important in the market. As long as the businesses decide to delegate some scope of work, their internal resources can focus on the operations they specialize in. In this case, they choose to address all needs and not leave some tasks for later.

Any business can reach the point where engaging external resources could definitely address rising needs. The engagement models can vary, but the main thing is that it supports partnering with top-quality resources at flexible terms. As a result, finding the answer to the question of staff augmentation vs managed services: what to choose mainly depends on the outlined needs and how they’d like to arrange the service delivery. It often happens that even companies with excellent internal resources might need some additional assistance. Team augmentation becomes a great alternative if it’s about a temporary need for one or a few developers. But if the business has to handle specific processes and needs more expertise, managed IT services are one of the best approaches.

CONCLUSION

Knowing the difference between staff augmentation and managed services is a valid point. It allows choosing and leveraging the suitable model regarding growing needs. That is a fact that both approaches have found their successful adoption and brought valuable expertise to so many projects. Regardless of the domain or company’s specifications, there is always a way to embrace the suitable engagement model to get the most out of it. We hope you find this article helpful in comparing and contrasting staff augmentation vs managed services. The right combination of business-specific requirements and understanding of each model enables making informed choices and going with the best alternative.