It’s logical that managed services and staff augmentation are often used interchangeably, given that they both have their origins in IT outsourcing. In truth, comparing managed services with staff augmentation is like comparing a telescope and a microscope; despite a few fundamental similarities, the two are completely distinct in both shape and function.
Managed Services
Management duties and strategic tasks are outsourced to a Managed Services Provider (MSP) under a pre-determined contract under a managed services model. The customer and the supplier define and negotiate the services and rates. The services offered are termed “managed” since the MSP is in charge of not just the job but also the delivery model, personnel, training, procedures, and tools needed to execute the task.
When an MSP provides a service, it makes a number of explicit agreements with the customer. The MSP and the client work together to monitor the provider’s performance against the Service Level Agreements (SLAs) that are related to those promises. This procedure not only increases the MSP’s responsibility but also instills a feeling of ownership in the personnel who represent the provider.
MSPs take a proactive approach, looking at possibilities for continuous development. As a consequence, they evaluate both the current position and the future objectives of the organization, which often leads to a solid relationship between the MSP and the customer.
Staff Augmentation
Outstaffing services function more like a microscope; instead of scanning the horizon for areas for improvement, staff augmentation focuses on one chosen target area to fix an issue.
The goal of staff augmentation is to fill skill shortages among the client’s current personnel for a given project. Staff augmentation businesses supply staff depending on the demands of their customers. Costs are often measured incrementally—either per resource or per hour worked—because they offer time-in-seats rather than services. Typically, the client manages the resources rather than the business, which may provide the consumer with a stronger feeling of control.
If a company is struggling to meet approaching project deadlines, staff augmentation may provide a rapid and effective boost. The additional resources may assist in completing projects while avoiding many of the additional expenses and hazards involved with employing internally.
Staff augmentation is, by definition, more reactive than managed services; the narrow emphasis on projects and shorter engagements provide less time for workers to contribute and influence the client’s overall business objectives.
Weighing the Alternatives
Some IT executives may be apprehensive about the possible loss of control that comes with using an MSP; others may be concerned about transitional interruptions or internal IT team opposition. These companies often favor staff augmentation due to apparent cost savings and feelings of better control. Working with an MSP may not be the greatest answer for firms that just need help with one or two short-term projects.
While there are certain short-term advantages to staff augmentation, staff augmentation over a long period of time—or across numerous projects—has significant hidden costs as compared to managed services. As an example:
- Although subject-matter training is not required for specialists, every new staff augmentation resource must be taught on client-specific procedures and technologies. Once an MSP has a good understanding of your environment, they will train their resources.
- Although recruiting internal personnel may save money, staff augmentation adds management expense. MSPs reduce both of these expenditures by managing their own resources.
- When you need more staff augmentation resources, your prices rise dramatically since each extra resource costs nearly the same. With an MSP, you are paying for a fixed-price service.
Managed services are also a more appealing alternative for IT executives seeking to enhance performance across all IT initiatives over time. Staff augmentation is about completing projects, however, it might be difficult for a staff augmentation resource to generate outcomes utilizing the same, defective internal procedures that hindered internal personnel from resolving the issue on their own.
MSPs provide not just issue solvers, but also individuals who understand why problems emerge. As a consequence, IT projects are completed, and customers proactively improve the way they operate by following detailed recommendations based on industry best practices—all at a predictable cost.