Outsourcing is probably the best decision you can make during economic recessions or other turbulent times. With rising demand for hard-to-find talent and experience in technology and change, 32% of executives expect a rise in outsourcing budgets. But if you are a first-timer, many different models and solutions seem almost identical. How can you choose the one that will help your business prosper? You need to consider the similarities and differences of the models you consider. Understand which one fits your business goals perfectly. Prepare your existing team for change. Keep reading to learn more about staff augmentation and managed IT service models, and how they can aid the digital transformation of your company.
Staff Augmentation Model — the Basics
Staff augmentation can be defined as a model which implies supplementing or extending an organization’s software development team with extra tech experts. In recent years, the model has become increasingly popular. Those tech companies that feel the need for a bigger team of developers choose staff augmentation for good. All a company has to do is find a trusted service provider. This “partner” will be responsible for recruiting IT personnel with specific skill sets, and assigning them to work with the client’s existing team.
Advantages
- Access to specialized skills and expertise. Staff augmentation allows organizations to tap into a wider talent pool. You can find professionals with specific domain knowledge that may not be available internally.
- Flexibility and scalability. You can scale up or downsize whenever you need. This model goes hand in hand with agile resource relocation. If you want to be able to change your team size to align it with the project requirements, the staff augmentation model will be a perfect fit for you.
- Cost-efficiency. Companies that use staff augmentation can save money on the costs of acquiring and retaining full-time employees. They can save money on things like recruitment, training, benefits, and overhead. Essentially, you’ll pay for the hired workers only for the time of their engagement, which can result in cost savings.
- Faster resource acquisition. You can hire new people within weeks, not months. Staff augmentation allows organizations to quickly onboard professionals who already have the required skills. This eliminates the need for lengthy recruitment processes and enables faster resource acquisition.
- Knowledge transfer and collaboration. The augmented staff cooperates with the existing internal team, fostering knowledge transfer and collaboration. It helps people come up with new ideas and solutions, often leading to better results.
- Reduced administrative burden. Staff augmentation enables businesses to delegate certain administrative activities to a service provider or staffing agency.
- Risk mitigation. The model ensures that critical projects are adequately staffed, reducing the risk of delays or failure due to resource constraints.
Disadvantages
- Limited control over external resources. With staff augmentation, the external resources are not under the direct control of the organization.
- Potential integration and communication issues. Incorporating external resources into an existing team can be challenging when it comes to integrating them into the team dynamics, work processes, and communication channels.
- Dependency on external providers. Organizations relying on staff augmentation may become dependent on staffing agencies.
- Knowledge retention and continuity. As external resources are typically engaged for a limited period, there is a risk of knowledge loss when they transition out of the project or organization.
- Long-term costs. While staff augmentation can provide short-term cost savings, if the organization relies on external resources over an extended period, the cumulative costs might surpass the expenses associated with hiring and training full-time employees.
- Cultural and team dynamics. The introduction of external resources may disrupt the existing team dynamics and work culture.
- Security and confidentiality risks. Engaging external resources introduces potential security and confidentiality risks.
Managed IT Services Model — the Basics
Managed IT services is a business model in which a company contracts with a third-party service provider to handle its IT operations. This service provider is sometimes referred to as a Managed Service Provider (MSP). Under this model, the MSP takes on the proactive management and monitoring of the client’s IT infrastructure, systems, and services. In a managed IT services model, the MSP assumes responsibility for various IT functions, such as network management, data backup and recovery, help desk support, and more. The MSP typically offers these services on a subscription basis, providing ongoing support and maintenance.
Advantages
- Proactive IT management and monitoring. The model enables proactive monitoring and management practices to identify and address potential issues before they escalate.
- Predictable pricing and cost structure. You’ll enjoy a predictable and transparent pricing model, allowing for better budgeting and avoiding unexpected expenses.
- Access to specialized expertise and skills. Managed service providers work with skilled IT professionals with expertise in various areas, ensuring efficient handling of complex IT tasks.
- Scalability and flexibility. The managed IT services model allows businesses to scale their IT support and resources up or down based on their evolving needs.
- Focus on core business objectives. By outsourcing IT operations to a managed service provider, organizations can free up their internal resources to focus on core business goals, innovation, and strategic initiatives.
- Enhanced security and compliance. Managed service providers focus on cybersecurity and compliance measures, implementing robust security protocols, conducting regular audits, and ensuring that the client’s IT infrastructure adheres to industry regulations and standards.
- 24/7 support and help desk services. Managed IT services often offer 24/7 help desk support. It ensures prompt assistance and issue resolution anytime, day or night, to minimize downtime and maintain smooth IT operations.
Read also: Software vendor selection criteria that will help you choose a trusted partner
Disadvantages
- Dependency on the service provider. Companies may become overly reliant on the managed service provider, which can pose challenges if the provider experiences issues or fails to meet expectations.
- Limited control over IT operations. Outsourcing IT functions may result in reduced control over decision-making processes and flexibility in managing IT operations.
- Integration challenges. Integrating the managed service provider into existing workflows and organizational structures can be challenging and need effective coordination.
- Potential communication gaps. Differences in organizational culture, communication styles, or time zones may lead to delays in issue resolution.
- Limited customization options. Standardized service packages from the managed service provider may limit customization options to meet unique organizational needs.
- Risk of vendor lock-in. Switching to a different provider can be difficult and costly once an organization has invested in a specific service provider.
- Security and confidentiality concerns. Entrusting critical IT functions and sensitive data to a third-party provider may raise security and confidentiality concerns, requiring robust agreements and security measures.
Final Words
Staff augmentation entails recruiting outside IT workers to supplement the client’s team, offering flexibility and skill-specific expertise. The managed IT services model outsources entire IT services to a specialist provider, who provides management and other services. Staff augmentation is concerned with resource provision and project ownership, whereas managed IT services — are with service scope and provider accountability. The approach to resource management and the level of control kept by the client differs between these models. If you’re interested to learn more, contact Nearshore Friends to start working with agile professionals today.
