Staff Augmentation Vs. Managed Services: What's the Difference?

Staff Augmentation

The use of external professionals by a business to increase the size and specialized skills of its current workforce is known as staff augmentation.

Whether it be for a few weeks, months, or even a whole year, the expanded workforce works for the company on a temporary basis. The outsourced staff are temporary workers who can work either as an extended team of your in-house counterpart or as independent individuals based on your business goals. By tapping into onshore, nearshore, and offshore talent, businesses swiftly augment the capacity of the current in-house team.

Although the augmented staff are not your regular staff members, they are often thoroughly incorporated into the internal team and often have the same level of access to the resources and systems.

The most notable benefit of staff augmentation is its cost-effectiveness. Without too much financial investment in hiring full-time employees, the business still has full and rapid access to the necessary skills.

Managed Services

The purpose of managed services involves outsourcing the management and support of your business in order to enhance operational effectiveness. The manager of the managed service provider, or MSP, takes on the role of a full-time employee. However, they work independently. After receiving the client’s approval regarding the project schedule and quote, the MSP works on the assigned tasks while maintaining regular contact with the client.

Anything can be outsourced to managed service providers, ranging from data migration to database monitoring to software development.

Managed service providers assemble a dedicated team of experts to lighten the load of a diverse client base, freeing them up to focus on the core business activities and eliminating the need to hire and retain in-house employees.

As mentioned earlier, the merits of managed services are cost-effective and operationally effective, as this project outsourcing model reduces overhead and resource management.

Benefits of Staff Augmentation

Eliminates Hiring Efforts

This is one of the distinct advantages. The responsibility of finding and hiring the right people now is the external providers’. As a result, you are saving a lot of time, effort, and money put into the recruiting process and only focus on choosing which talent you wish to cooperate with.

Staffing Flexibility

Staff augmentation allows you to scale your entire team up or down with ease, depending on the complexity of the project at hand.

Smooth Integration with an In-house Team

The onboarding of the augmented staff typically doesn’t take very long. Also, they have temporarily joined your team, so you can keep an eye on their work.

Complete Control over the Project

Staff augmentation gives you full, direct control over the project. You have control over the project schedule, how it is executed, and most importantly of all, the quality. No need for you to modify any workflows or replace components. The project manager ensures quality is the top priority, along with on-time delivery.

Easy Access to Desired Skills at a Lower Cost

Not only do you have access to a large talent pool on short notice, but you can also access specialized expertise at senior or specialist levels.

Risk Reduction

There is less chance of critical information being leaked because you have complete control over the project process. You can, however, always ask your partners to sign an NDA.

Drawbacks of Staff Augmentation

Not a Long-term Solution

Staff augmentation is often not recommended as a long-term solution. In the long run, there might be additional requirements or even greater reliance on a third-party provider. This might also challenge the cost-effectiveness of the solution. Therefore, staff augmentation services are trusted to address skill gaps for short-term projects.

Internal Training Needed

Even though this outsourcing model provides you with experienced professionals, you still need to instruct them on internal processes and workflows.

Well-Established Internal Work Processes Are Needed

A solid work process is necessary, especially when your outsourced team lives in another time zone. Everyone needs to be crystal clear about what tasks need to be executed and what the next step is.

Benefits of Managed Services

No Internal Training Needed

No need to spend time on training or the onboarding process, as your managed services provider has you covered. They have a dedicated project manager and an independent operational team working on delivering the best product.

Increasing Focus on Core Business Operations

Unlike staff augmentation, managed services spare you from involvement in the development process. Your team only needs to specify the demands. The rest of the time can be spent on other value-driven business processes and strategic initiatives, such as optimizing revenue, boosting sales, etc.

Access to Skills and Expertise

Just like the staff augmentation model, managed services provide access to a large pool of specialized talent. With skilled professionals at hand, you can get started right away. These experts may also open up brand-new growth opportunities for your business.

Guaranteed Outcome

A service level agreement (SLA), which outlines the parameters for each project’s scope and duration, is often signed between the client and managed services provider. Therefore, the MSP needs to deliver the desired results in order to get paid, keep its reputation, and have its position value increased.

Best Project Management Practices

Having a credible managed services provider means that your team benefits from project management practices and DevOps procedures while still meeting the deadline and staying under budget. Should you only rely on in-house staff, you might find the need to hire additional employees to guarantee a smooth development process. Now, you have that weight taken off and no longer need to constantly oversee the process.

Drawbacks of Managed Services

Compromised Independence and Security Concerns

The managed services company needs to be given sufficient control and autonomy to make vital decisions. As the service provider assumes control in the development process, it also means that they have access to sensitive information. This is one of the key reasons why selecting a reliable service provider is essential.

Potentially Expensive

Managed service providers often offer a full package that might include tools you don’t really need for the project. In a lot of cases, adding a few temporary staff is cheaper than having a managed service provider because the model doesn’t bring on board an entire team of experts and managerial staff.

The Need for a Well-Written Brief

As mentioned earlier, the client’s team wouldn’t need to follow closely on the project, but a specific brief is needed. The more detailed the brief, the higher the chance of success. It also helps with accurate cost estimation. However, over-specification can be a problem too. Sometimes, this problem prevents the team from performing optimally.