IT outsourcing has long remained a widely used staffing technique by companies across the globe to reap the several benefits it provides. However, modern workspaces, driven by the need for affordable functioning, hiring talent that is not restricted by geographical boundaries and doing anytime, anywhere business, have undergone a transformational change.

This change has resulted in more and more companies adopting the outsourcing model and hiring remote employees to fit into the changing dynamics of a modern workplace.

Moreover, the changing technologies have made it possible for businesses to let their employees work from anywhere and still get the work done most efficiently. So, if a company can have its business running without having a big in house team of expanding staff, choosing outsourcing models makes complete sense in today’s cost-sensitive market.

Staff Augmentation vs Managed Services

Amongst many staffing solutions, Salesforce Staff Augmentation and Salesforce Managed Services  have emerged as the two of the most reliable and widely practiced IT outsourcing working models. And even though these two terms are widely used interchangeably, the differences between managed services and staff augmentation are many and businesses must carefully choose between the two depending on their requirements.

Although the aim of both these service models is to help clients solve critical business issues, the two work very differently. Staff augmentation is all about providing the resources that will take care of specific tasks or projects and managed services take control of full-fledged functions or handle specific processes including cybersecurity, cloud management, etc.

How are Staff Augmentation and Managed Services Different

Staff augmentation and managed services are quite different from each other. Staff augmentation aims at providing a defined number of hours of staff to complete the tasks, while managed services help in managing a specific function or a service as described in the agreement.

For instance, Staff augmentation service provider may provide software development support for 40 hours a week, while managed services will take care of everything that needs to be done, irrespective of the number of hours required, to upkeep and manage various functions of a business.

In short, Staff augmentation mostly focuses on the bigger picture while managed services address specific services and delve into the functional nitty-gritty.

Furthermore, in Staff augmentation, the training is provided by the MSP while the hired personnel are trained by the clients on their processes and work practices in managed services.

Even the commercials involved are different. While Staff augmentation charges are levied on a project basis, managed services charge on the number of working hours for the number of employees hired.

Find out the major difference between managed services and staff augmentation model in this table – 

	Staff Augmentation	Managed Services
Activity	Focus on big picture	Focus is on the completion of specific tasks and work at hand
Who offers it	MSP	Hired professionals
Training	Provided by MSP	Hired personnel must be trained by the client
Commercials	Charged on monthly or project basis	Charged on working hours and number of people hired
Coverage	As per service level agreement	As per the scope of work

What is the Staff augmentation model?

The debate around Staff augmentation vs managed services has been a long-running one. Let’s look at the two models individually to get a better understanding and know their differences.

Evgeniy Altynpara, a member of the Forbes Council of tech professionals, explains Staff augmentation as, “It’s a cooperation model where a company expands its in-house staff by temporarily hiring one or several outsourcing IT specialists. Augmented specialists become a part of an in-house team and cooperate with the company’s employees for a short time commonly.”

In short, staff augmentation is hiring an employee to complete certain tasks. The only way it differs from regular staffing is that these employees work remotely for your business on a contract basis to fulfil a pre-defined purpose.

If figures can give any indication about how IT staff augmentation is great for your business, a recent report suggested that IT Staff Augmentation Service Market Size is estimated to become a multimillion-dollar industry by 2028.

When hired through staff augmentation, the experts might not be permanent employees, but they get fully integrated into your system and work just as all other members of your full-time workforce. This reduces hiring time and costs for the company, especially in countries where there are stringent and lengthy hiring and relieving processes.

This is why it is important that you choose the right staff augmentation company. Here are a few tips for doing so.

Pros of staff augmentation

IT staff augmentation is a widely used technique for hiring professionals for specific requirements. The fact that this industry has witnessed steady growth over the years indicates that it provides several benefits. Let’s look at them individually:

Reduced hiring cost and time

A recent study by Glassdoor showed that an organization spends an average of $4000 on hiring a new employee. In addition to that, it can take up to 6 months to find the right employee and put together an in-house team. These are expensive propositions for every company as going without the right employee for six months straight is a huge loss of business.

However, staff augmentation exempts businesses from all these hassles. Hiring through staff augmentation is a quick and cost-effective process where you get highly skilled and trained experts to complete your work.

Additionally, since experts working through the staff augmentation model work on an hourly basis, their rates are comparatively lower. You also save other expenses like equipment and office set up.

Since the personnel hired through staff augmentation are usually engaged for short-term purposes, they can be easily relieved once the project is over. This is a much quicker and hassle-free process, unlike relieving a permanent employee, which can be a time-consuming and exhausting procedure.

Additional flexibility

Flexibility is yet another benefit of staff augmentation. You can hire as many IT experts as you want as it is extremely easy to scale up and down the team. You can also choose the payment method and terms at your convenience. You can pay employees on a daily, weekly or monthly basis.

This kind of flexibility is not at your disposal when you opt for hiring full-time employees. There are certain HR terms and conditions that you must follow, which are not always the easiest ones to adhere to.

Increased productivity

Since the employee hired through staff augmentation dedicatedly works for your projects, the productivity is a lot higher. This is a much better situation than outsourcing your projects as those teams simultaneously work on several projects, diluting their efforts and concentration levels.

You can also enjoy complete project control through staff augmentation as the hired employee will work on the projects on the terms per-defined by you.

Higher growth and adaptability

Since most employees hired through the staff augmentation model come on board on a short-term basis, there is a higher adaptability involved. The growth prospects are also a lot higher as the number of people involved in a project can be increased or decreased as per your requirements, without having to commit to a full-time workforce. Staff augmentation allows more flexibility as you can hire on a project basis and then dissolve the team instantly after project completion.

Cons of staff augmentation services

Before you finalize which model to follow, you must also know the disadvantages of the staff augmentation process. Here are a few cons that come with this staffing model:

• It requires a stringent internal process to be implemented
• There will always be a certain degree of ambiguity when it comes to loyalty and dedication since most personnel hired through staff augmentation are hired on a short-term basis
• You must be prepared to solve critical issues and challenges on your own. So, the final result depends completely on your entire team

What is the managed services model? 

Another way of hiring qualified and expert professionals is through managed services. The managed service model allows you to transfer the control of project management and other management resources to another set of professionals.

The main difference between managed services and staff augmentation is that the former is part of outsourcing while the latter falls under the out staffing category.

The client company can hand over most of its core technical concepts, management resources, support services, data analytics, and several other such services to the third-party provider and let them take care of it all.

The managed services company works within the broad parameters established and agreed upon by the parent company. The managed service providers must comply with the quality and security standards mentioned in the service level agreement.

MSPs usually also provide a project manager who looks over all the work and ensures that everything remains well within control and processes are managed properly.

Pros of managed services 

As staff augmentation provides a number of benefits, so is the case with managed services. This is also a productive work model that can help companies dedicate their time and effort to more fruitful and critical operations. The benefits of managed services include:

Time saving

Once you outsource your project responsibilities to managed services provider, you no longer need to spend time and effort in completing immediate deliverables and the nitty-gritty of how the project will be completed. All these aspects are taken care of by the project manager and the outsourced team they deploy for your services.

Increased focus on operations

As managed services save a lot of the company’s time, the client company can utilize this freed-up time on the more critical aspects of their business such as marketing strategies, etc. Such increased focus can help you take complete control of your strategic planning, complete specific tasks and increase your business growth.

More scalability

With much of your work being done remotely by the experienced team of the outsourced company, the cost thus saved can be used to scale your business. When working with your in-house team, you need to provide for them and even a single addition to your team means more expenditure. Scalability becomes an easier and more plausible option for businesses opting for the managed services model.

Minimum downtime

Downtime is one of the major reasons for business and productivity loss. This can happen due to system failure, computer malfunctioning, electrical disruptions, cyber attacks, data loss etc. Not all businesses have the wherewithal to handle all this.

However, you can save up on downtime and maintenance costs if you outsource your work to a managed service provider.

Cons of managed services

As many benefits as managed services come with, there are certain downsides to them as well. These include:

Costlier than staff augmentation

Managed services often take up entire projects, functions and processes. This might require the managed service provider to employ more people, hence increasing the overall cost. It is broadly estimated that managed services are slightly more expensive than staff augmentation.

Loss of autonomy

To be able to manage and handle entire processes, you must provide complete autonomy to the project managers so that they can take critical decisions during emergencies. This means that you lose out on the autonomy of your projects.

Staff Augmentation vs Managed Services – Which One to Opt For

Now that we know what staff augmentation and managed services are and the kind of pros and cons that come with them, the next big question that arises is – staff augmentation vs managed services – which is a better fit for your business.

Both these models have their strengths and weaknesses and require a certain degree of letting go as well. So, you must choose the service model that fits best into your requirements.

If your company is bustling with ideas but doesn’t have the kind of technical expertise and manpower required to manage and implement those ideas, then managed services are ideal for you. Additionally, if large-scale companies wish to maximize their production and make a shift over to an online working model that didn’t exist previously must also opt for managed services.

Staff augmentation, on the other hand, is the perfect solution if you wish to hire subject experts and don’t have the availability of reliable resources in your area. This is an effective way of finding just the right candidate to do your job without going through the cumbersome hiring process.

If urgency is a factor, then too, staff augmentation is the right choice. If you have a project going live and you need personnel to take charge of things, you can quickly hire a specialist through staff augmentation.

Frequently Asked Questions about Staff Augmentation vs Managed Services

What are managed services?

Manages services are processes and functions that are outsourced by the parent company to a service provider, who in turn manages and operates them to provide business support to the parent company.

Managed service providers usually take care of processes including cloud infrastructure maintenance, security, backup recovery, platform migration, etc.

What is staff augmentation?

Staff augmentation is the process of hiring professionals on a contract basis instead of developing a whole team of experts. It lets companies work with the best industry professionals at a much lower rate.

It also gives them the benefit of having access to services at all times. Staff augmentation usually happens for a short period of time with limited roles and responsibilities given to the outsourced person. So, from reduced cost to lower downtime, these services deliver multiple benefits.

Which is better – staff augmentation or managed services?

These processes are often used interchangeably. However, the essential difference is how they support your company. You must choose the one that fits the best into your requirements. Companies with limited manpower and resources must opt for the managed services model, while those looking to hire the best talent for a limited period should go for staff augmentation.

Conclusion

Today, most companies are looking to outsource their services to maximize the benefits that such services add to the business. Among all, staff augmentation and managed services are the two most popular ones.

Both these models help organizations meet their business goals by optimizing the hiring process. Whether it is short-term hiring through staff augmentation or letting the outsourced company handle the entire process through managed services, it is all about meeting the business goals.

Wish to know which model will suit your business the most? Let us help you with that. Contact us for more.