IT Staff Augmentation Vs. Managed Services: Choose the Best One For Your Project

Jun 14, 2019

IT outsourcing is a practice that involves delegation of components of a web-based application development process. Plenty of outsourced services such as testing, coding and design can be used in development, although outsourcing comes with risks that are caused by the low control level from the client company.

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That is why a company decides on staff augmentation vs managed services.

Information technology departments that need to implement new projects will need to outsource them to meet their goals as scheduled. IT outsourcing can be used to supplement the expertise of permanent employees.

The two models used to enhance the workforce include IT managed services vs staff augmentation. They are two reliable solutions that should be carefully evaluated and understood before choosing one that works well with the selected projects to fulfill the objectives.

Here are the specifications of the two models that will help firms choose according to their specific requirements:

Staff Augmentation

Staff augmentation is an option that implemented when the company’s in-house team cannot fill the gap because of lack of particular skills that are necessary for project completion. The staff augmentation approach comes into play when an organization brings in outside qualified workers to work together with the in-house team and fill in the skill gaps for the particular project.

This approach allows companies to meet deadlines without compromising the project quality. Additional resources through staff augmentation also help to save the costs of internal hiring.

Augmentation outsourcing firms allow enterprises to assess their needs and hire employees according to the project requirements. Since there is no permanent commitment to this approach, employers can flexibly add or reduce the number of employees based on any changes in requirements. Staff augmentation helps to zero-in on earmarked areas in order to solve a problem.

Below are the advantages and drawbacks of staff augmentation:

  • Flexibility of adapting to business conditions – Staff augmentation fills in when varying skill sets are needed to fix problems such as staff shortages or when there’s the need for business application modernization. Seasonal fluctuations can also require beefing up of IT support teams when needed. Adaptivity will help an organization to reach its set goals;
  • Cost-effectiveness – Permanent employees need retirement plans, health insurance and various other costs when hired. But with augmentation, an organization can get specialized skills quickly and pay for the necessary work within a given time. This saves them money in the long run;
  • Low risk and impact – The outsourcer shoulders all the responsibility of the web-based application development and minimizes control and status monitoring of the project. This lowers any risks as you concentrate on in-house employees where you are in full control. Augmentation staff are designed to flow into the project with minimum interruption. They allow IT to complete their projects without any disruptions to the operating models;
  • Counteracting attrition – Augmented staff help to fill in the need for software engineers during economic upturns when attrition in IT is ineludible;
  • Control – With augmented staff, the project manager only monitors those allocated to various areas of the project. The offshore augmented team maintains full control of all the aspects of the project. Taking control of the process means controlling the quality of the completed product;
  • In most cases, when staff augmentation is used as a permanent fixture within a company, its value decreases. Augmentation is only ideal for short-term projects that have a defined need and an endpoint. This helps to keep the costs in check and also leverages enhanced abilities that will meet the demands flexibly.

Here are some of the drawbacks associated with long-term staff augmentation:

  • Effect on resource management – Augmented staff may increase, prompting the management to pull in new resources. When the IT manager relies on augmented staff instead of utilising the internal team with proper knowledge and in-depth context of the project, the resource management of the company will suffer;
  • Companies that use staff augmentation benefit from the resources but not the results. They are ideally responsible for the project quality control and development process, which means that the outcome is also their responsibility;
  • Overload of augmented staff – Long-term staff augmentation can result in augmented staff overload that translates to high-cost billable hours. Too many augmented staff make it hard for management to quantify their value when completing mission-critical projects, which may result in performance issues.

Managed IT Services

Managed services offer permanent control, high levels of business adaptation and feedback. The managed services approach is a traditional IT sourcing approach that offers solutions with minimal internal maneuvering and training. This is where the client company sources the maintenance of the system and also delegates all the aspects of the business application modernization project including support, and control of the main business affecting monitoring, reports and indicators.

The outsourcer holds all the risks involved in meeting the timelines and goals of the project. They have all the incentives to ensure the projects are completed according to schedule and the client’s satisfaction.

Here are the benefits of managed services:

  • Guaranteed outcomes–A managed service should offer the client defined outcomes. The tasked managed services firm should complete the offshore .net development project and others within the given time and at a price is tied to the end result. If the project is easy or more complex than expected, the resources will be scaled up or down;
  • Access to a variety of skills and technologies – Managed IT services firms are often large and offer their customers a broader base of skills, knowledge and solutions that are documented and kept by the hiring company. The company can access the latest technologies and also benefit from expert support while running its business. This helps them to deploy and implement right away and save the business resources and time;
  • Focus on the core competencies – The software development team provides the technical solutions while the hiring firm will have time to focus on business core competencies. This allows them to expand and manage their business with ease.

Here are the disadvantages of the managed services approach:

  • Vendor reliability – The hiring firm puts its resources at risk with no significant influence on the workflow;
  • High running costs – The rare skills and technologies offered by managed services are subject to significant expenses, making it costly to the client;
  • The responsibility of the project is in the hands of the client company. In case there are flaws, the client will shoulder the compensations outgoings. In such a case, the expenses will outrun the contract cost.

Final thoughts

There is no single versatile approach to development project sourcing for most companies. Some requirement can be executed well with managed services while others with staff augmentations. At other times a combination of the two approaches is what will work for the project.

The choice of managed services vs staff augmentation approach will depend on the hiring company’s assessment of their needs, budget and other essential requirements. Both models are highly reliable, but a well-calculated decision has to be made.

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