Lots of businesses could use some extra help with their internal IT processes. If you’re among the 1 in 5 business owners fighting with technology, you’ve probably already figured that out. Even if you’re not, there’s always room for greater efficiency. IT outsourcing can help with this, yet not all outsourcing models are alike. Consider staff augmentation vs. managed services.
Staff augmentation and managed services are both common IT outsourcing models. Both have their benefits, but you should take the time to truly understand each. That’s because one may be a better fit for your needs than the other.
That’s why this article is here to help. It will provide a decent jumping off point to give you a better understanding of which service model makes the most sense for your business.
The staff augmentation model is essentially a strategy for filling skills gaps within your existing team on a short-term basis. Think of it as skilled professionals for rent. You maintain complete control over the project but ‘rent’ a handful of temporary team members on a short contract.
Generally speaking, augmented workers are paid an hourly rate. Although, this may depend on your contract and their agency. They behave exactly like anyone on your in-house team, but they aren’t permanent.
On the other hand, the managed services model is a long-term engagement. A managed services provider (MSP) sticks with you over the duration of many months, years, and multiple projects. If augmented staff are ‘rented’ professionals, MSPs are like full-time advisers who will offer strategic advice towards big picture business solutions.
| “Success with technology relies on the combination of People & Process. Without the process, strategy and methodology of a Managed Service Provider, adding people is often just adding cost with little to show for it.” Ray Sweeney, Chief Commercial Officer, Sensible Business Solutions |
Paying for an MSP usually works like most other subscription services. You would pay a flat rate on a regular basis depending on the services you ordered. This fee may initially seem more expensive than an hourly worker, but it’s better in the long run if you constantly need help.
Managed services also fully take over project management. They often provide their own project managers and take the whole task off your hands. This can be a huge time saver, especially if technology is just not your thing.
Staff augmentation is best if you only need temporary help for a short while. Some business owners may also choose it if they aren’t fully comfortable handing project ownership over to a third-party provider.
| Learn More About How Technology Can Improve Business Operations |
It’s easy to assume that cost-effectiveness is another benefit of staff augmentation over managed services. However, this is not entirely true. If you need help with many different projects, you’ll need to re-contract your augmented team each time. That adds up.
If you think you’ll need help with multiple projects or an ongoing task (such as IT support or network monitoring), then it’s best to opt for managed services. Since an MSP contract is ongoing, you won’t need to rehire them every time you need them. You’ll always have someone you can count on just a call away
| There’s a Lot That An MSP Can Do…. |
Managed IT services are also generally more flexible than staff augmentation. That’s because when you hire augmented staff, their work is limited to the space you hired them for. MSPs do also have service level contracts, but they generally cover a comparatively wider scope.
For a quick run-down of the key differences, keep this table on hand.
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Staff Augmentation |
Managed Services |
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| Definition | Staff augmentation is a strategy that involves adding skilled, specialised professionals to the team on an as-needed basis. | Managed services is a strategic approach where a company outsources specific processes and functions intended to improve operations and reduce expenses. |
| Control | High level of control as staff report directly to the company. | Less direct control, as the outsourced company manages the services. |
| Responsibility | The company is responsible for the direction, supervision, and output of the augmenting staff. | The service provider assumes responsibility for the performance of the services. |
| Cost | Variable cost based on the number of staff and length of engagement. | Generally a fixed cost based on a contracted service level agreement (SLA). |
| Expertise | Allows for specific expertise to be utilised on a project basis. | Provides ongoing access to broad expertise and advanced technologies. |
| Focus | Staff augmentation helps the company focus on core activities by providing extra hands and brains for project-based work. | Managed services allows the company to focus on core activities, as the provider handles operational details. |
| Risk Management | Risk management is the company’s responsibility. | The service provider assumes a share of operational risks. |
| Change Management | The company is responsible for managing changes in staff or project direction. | Managed services providers manage change within their scope of work, reducing company's internal load. |
| Long-term Value | The added value ends when the project is completed or the contract ends. | The service provider often adds long-term value by continually improving processes and systems. |
| Training | Training is usually the responsibility of the company. | The service provider is responsible for the training of their own staff. |
| Staff Loyalty | Staff may have less loyalty, as they are temporary and contract-based. | Although staff are external, MSPs can be very loyal to their clients’ needs and goals. |
As an MSP ourselves, we may be a little biassed, but we really think most businesses can get more out of managed services than they can from staff augmentation. The choice is yours, however, if this article has convinced you that an MSP is best for your business, we’re here.
Sensible Business Solutions stands out in the managed services world. We offer a unique combination of business acumen and tech-savviness that not many other MSPs can claim. Plus, we were recently ranked the #2 best provider in Australia and NZ.
If you think you’d like to give us a whirl, please don’t hesitate to reach out.
