IT Outsourcing: staff augmentation vs managed IT services
Outsourcing is a good way to help business organizations save costs and have access to a large pools of talents as well as latest technologies. Obviously, business organizations need to reduce on the large spending of many IT related services and focus on their core business functions. Managed IT services and staff augmentation are the two popular outsourcing models choices which help companies address many of their IT challenges. In this article, we examine the two models and find out which one is suitable for your It requirements.
Staff augmentation compared to managed IT services
What is Staff augmentation?
Staff augmentation, in the case of IT outsourcing, is to add IT professionals on-demand from a service provider to complement with your in-house team for a varying length of time. Staff augmentation provides several benefits as follow:
For many it projects, business does not necessarily require additional IT staffs permanently. Full-time hiring would results in inefficient resources allocation. With staff augmentation, businesses only have to pay for the costs (to highly qualified IT professionals) when they are in need of the service.
Access to large pools of talents and new technologies:
Business organizations can easily have access to the skills and technologies required for their It projects. Additionally, organization can certainly scale their size up and down according to project requirement.
Lower staff-turnover rate:
Today, many companies find it a challenge to hire and retain permanent staff. Especially when it comes to hiring IT professionals, with a growing demand of IT service leading to shortage of skilled developers. Staff augmentation makes it easier for companies by helping to fill in qualified developers quickly to help make the projects running according to schedule.
Staff augmentation would seem like an ideal for short-term requirements. However, this outsourcing model also has some minor disadvantages as it does not offer any other service commitment rather than man hours performed by the contractors.
Furthermore, many companies would be in need of a long-term solution with regards to technological development. If this is the case, employing managed IT service can help address the long-term technological development issue.
According to Techtarget: “A managed IT service is an information technology (IT) task provided by a third-party contractor and delivered to a customer.”
With managed service model, the service provider assumes the control of an organization’s IT service and/or equipment as well as taking on the responsibility for the functionality of it. Managed service has all the benefits of staff augmentation while at the same time overcoming many of its disadvantage:
Better cost model.
Managed IT services vendors tie pricing to the outcome. This means, if a customer’s demand for particular services diminishes or grows, the price will change respectively.
Managed IT services providers offer their service together with a service level agreement (SLA). Here, service provider must meet the commitments, so they are motivated to maximize the value of their work.
By providing access to a broad range of skills and expertise, managed IT services providers would be usually bigger than staff augmentation companies. Hence, they can offer customers companies a much wider range of services, solutions and knowledge which is crucial to meet customers’ requirements which are constantly evolving. As a result, IT managed service allows business organizations to focus on the core business functions while outsourcing the non-core to a reliable and experienced contractor.
Choosing between staff augmentation and managed it services
To choose between the two options should be based on the specific IT requirements of your business as well as a detailed cost-benefit analysis. If your organization needs a dedicated team of skilled developers/IT professionals for only a specified period of them but which are not already available within your own in-house IT department, then staff augmentation is an appropriate choice. On the other hand, if your organization is looking for an outsourcing model with a predictable pricing method, scalable on demand and continuous for a long period then you can consider managed IT services.