Staff Augmentation or Managed Services? How to Choose Wisely

Outsourcing projects to external teams is becoming more and more popular. But how do you know which outsourcing model is the best fit for your business needs? Have a look at this article that outlines the pros, cons, and major differences between staff augmentation and managed services.
Raluca Olariu
Raluca Olariu
Published on May 19, 2021


As digital transformation has forever changed the world of business, more and more companies are interested in IT outsourcing. In fact, the global staffing industry, one of the primary suppliers of staff augmentation talent, is estimated to support $490 billion in annual spending.

While this trend is growing fast, there is still some uncertainty regarding the healthiest and most convenient way for a business to use outside personnel. This article discusses two of the most popular contingent working models—staff augmentation and managed services—and how to choose the best option for your business needs.


What is staff augmentation, and how can it help you?


Staff augmentation allows companies to expand their in-house team with additional skilled resources to join a particular project. This type of outsourcing model chases once the project is over, and it's suitable for companies that don't need to hire someone permanently. 

Staff augmentation is best used for short-term projects and can also be used as a "trial run" for potential full-time employees. 

With this type of outsourcing, organizations can leverage specific skills on a per-project basis without going through costly and time-consuming hiring processes. 


What is managed services, and how can it help you?


Unlike the staff augmentation model, which enables companies to expand their team with additional skilled professionals, managed services outsourcing practices imply hiring a fully-equipped team of professionals to take care of your specific project. 

With the managed services model, you save many resources—time, costs, and effort—as you hire an entire team of skilled professionals who have the right tools and tech to complete your project. 

While a service provider will handle your project on its entire length, from beginning to end, your job is to ensure that you select a reliable company that you can trust will deliver positive business outcomes. 

The managed services model is the best fit for companies looking for stable and reliable long-term business cooperation. 


Which one should you choose?


To help you figure out which one of these outsourcing models is the one you should choose for your organization, let's have a look at the pros and cons of staff augmentation and managed services. 


Pros of staff augmentation:

- Project control and lower risk. Staff augmentation allows you to gain project autonomy and create outcomes based on specific requirements. You have the power to monitor the project on its entire length and have complete control over the development process, thus reducing the risk of ending up with the wrong project outcomes. 

- Flexibility and easy scaling. By choosing staff augmentation services, you gain the flexibility to quickly access missing skills cover staff shortages. You also get to scale your staff according to your current demands without worrying about lengthy hiring processes.

- Reduced costs. Contingent working models like staff augmentation provide you the opportunity to work remotely with worldwide outsourced professionals. This allows you to cut the additional costs of office space, hardware and software expenses, as well as get rid of monthly employee taxes. 


Cons of staff augmentation:

- Not suitable for long-term projects. Staff augmentation is practical only as long as you look for short-term business engagements as projects come and go. 

- Increased dependence on third-party talent organizations. This can put your sustainability plans more at risk. 

- Lengthy staff integration. New professionals that join specific, complex projects may require some time to get familiar with your products and expectations. 


Pros of managed services:

- Gain more resources for other projects. Since an entire outsourced team will handle your specific project, you can step back and let them do the whole job. In this way, you'll have more time and energy to focus on other important tasks within your organization. 

- Organized project and predictable outcomes. A managed services organization assesses the risks and predicts the results by developing a suitable structure for your project. 

- Less time spent on managing IT. If you lack technical expertise and management resources, hiring a managed services company will help you save time and money at the end of the day.


Cons of managed services:

- Hard to ensure security. When opting for the services of a provider, you provide access to sensitive data and assets. Therefore, companies that require high levels of data and information security might want to think twice before choose a managed services outsourcing model.

- Higher costs. Although hiring a managed services company might be cost-effective in the long run, it's not always possible to get the complete services package at a low price. The costs of handing over your project to an IT firm might be higher than when opting for staff augmentation since managed IT services cover both IT functions and project management. 

- Less control and autonomy. If you are looking to internalize your project management process and supervise outsourced staff, a managed services model might not be the suitable option for you. 


Wrapping up

Although outsourcing is becoming more popular, finding an external reliable development team can be a struggle. There is a plethora of options available on the market, making it challenging to make a choice. A wise choice. 

At Optasy, we understand how important it is to have a dedicated team of professionals that can handle a wide range of projects. So have a look at your services and contact us to learn more about how we can collaborate for success. 


Image credit: Annie Spratt on Unsplash.




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