In the current business landscape, the array of options for hiring staff has expanded significantly. Thanks to technological advancements and the prevalence of remote work, businesses are no longer bound by geographic constraints and can access a global pool of talent.
More and more opt to delegate essential tasks and project development. The global outsourcing market is currently valued at over $286 billion and is projected to witness a twofold increase by 2030.
Two prominent outsourcing models, staff augmentation and managed services, offer distinct advantages and pose unique risks. Let’s delve into a comparison to help you discern which aligns better with your company’s needs.
What Is Staff Augmentation?
Staff augmentation is an outsourcing model that involves companies bringing in external personnel temporarily to boost their current team’s capabilities. This method allows access to talent from onshore, nearshore, and offshore locations, making it easier to adjust team size according to fluctuating demands.
Best for:
- Businesses developing a new tech product with a team of programmers, seeking additional global talent in a rare skill set
- Companies in partnership with a project outsourcing firm but prefer direct communication with the team for better integration
Pros:
- No need for permanent hires; pay for highly qualified professionals only when needed
- Access to rare skills based on project scope, and easy scaling of the IT team up or down
- No challenges in finding and retaining permanent staff with niche skills in the latest technologies
Cons:
- Higher labor costs due to management overheads may not be sustainable in the long term
- Limited visibility into augmented staff’s work beyond work hours, potentially affecting productivity
- Cost structure doesn’t adjust proportionately as the need for augmented resources increases.
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What Are Managed Services?
Managed IT services involve outsourcing the management and support of your business to enhance operational efficiency. Acting as a full-time staff member, the managed service provider maintains a skilled team of specialists. This relieves the technological burden for a diverse customer base, enabling businesses to concentrate on their core operations without the hassle of acquiring and retaining in-house workers.
Best for:
- Growing companies with expanding teams
- Businesses looking to swiftly implement new technologies
- Companies looking for predictable IT spending as an investment
- Businesses that must maintain compliance with industry regulations (like HIPAA or PCI DSS)
Pros:
- Pricing adjusts based on service demand, providing flexibility
- Backed by SLAs, ensuring commitments are met for incentivized and valuable results
- Larger MSPs (managed service providers) offer a broad range of skills, knowledge, and solutions to meet evolving customer needs
Cons:
- Potential misalignment with business goals
- The pricing structure may be less transparent
- Security issues
- Difficulties in communication, delays in decision-making, and challenges arising from language or cultural differences
Broad Differences Between Staff Augmentation and Managed Services
The primary distinction between staff augmentation and managed services lies in the fact that staff augmentation offers additional personnel, whereas managed services encompass both personnel provision and their management.
If the requirement is for additional personnel to accomplish specific tasks or projects, staff augmentation may be the preferred choice. And if the emphasis is on someone managing the new staff, then opting for managed services might be a more suitable fit.
| Criteria | Staff Augmentation | Managed Services |
| Personnel Provision | Provides additional personnel for specific tasks or projects | Offers both personnel provision and management |
| Management Responsibility | Client retains management responsibility for the augmented staff | Managed service provider handles management of staff |
| Suitability | Ideal for organizations needing extra hands on specific projects | Suitable for those wanting to outsource staff management |
| Flexibility | Provides flexibility in scaling teams based on project demands | Offers flexibility with the added benefit of managed support |
| Resource Allocation | Requires client resources for internal management of augmented staff | Offloads the burden of staff management to the service provider |
| Communication Structure | Direct communication and coordination with augmented staff | Managed service provider oversees communication and coordination |
| Cost Structure | Cost-effective for temporary personnel needs | Pricing often tied to outcomes, ensuring cost efficiency |
| Focus | Focuses on augmenting specific skill sets or fulfilling short-term needs | Focuses on holistic management of personnel and services |
| Decision-Making | Client maintains decision-making authority for the augmented team | Decision-making may involve collaboration with the service provider |
| Examples | Hiring additional programmers for a development project | Outsourcing IT management, including hiring, to a service provider |
IT Staff Augmentation with Red Jumpers
Red Jumpers can help you cover your IT staff augmentation needs. Our robust vetting process and stringent development procedures ensure a smooth and reliable outsourcing experience for business owners.
Outsourcing comes with inherent risks, such as unfamiliarity with candidates and concerns about final product quality. That’s where Red Jumpers becomes your smart choice to help you alleviate these worries and provide peace of mind. With our extensive expertise and over 7000 vetted engineers, we are sure to meet all your requirements and maximize your company’s resources.
Conclusions
Given the uniqueness of every business, the strategy for selecting the right IT outsourcing model varies. When faced with the choice between staff augmentation and managed services, weighing the outlined benefits and drawbacks is crucial for an informed decision.
If you’re still uncertain about the best option for your project or team, the experts at Red Jumpers specialize in guiding you towards the most effective method tailored to your needs. Feel free to get in touch with us today.
