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12 December 2022



IT Staff Augmentation vs. Managed Services. What’s better?

Sooner or later, any tech business will seek a cooperation model that’ll best satisfy their needs and enable constant growth. Why? Because hiring in-house employees is an expensive and time-consuming process that only sometimes brings the anticipated results. One of the core advantages of hiring an external team is that you can focus on your business while an outsourcing agency deals with the rest. As a plus, you also don’t have to worry about other things that naturally come with hiring local developers. Are you interested to learn more? Keep reading to discover which model will be a perfect fit for you and your business.

Managed Services

Managed IT services enable you to quickly locate a low-cost contractor to complete specific work for your organization. At the same time, you are not responsible for workplace organization or problem-solving (for example, official employment, paying taxes, insurance, etc.).

This saves the client’s time, allows them to discover any professionals (with any qualifications and considerable expertise), and necessitates reduced charges (since in some countries, the pace of IT development is much lower than in countries with highly developed economies).

However, there are several limitations to this hiring model, most of which are related to the lack of transparency in the development of service costs (dishonest contractors can calculate man-hours to their advantage). Then there could be a high number of fixes as a result of a misunderstanding of the end product requirements.

Read also: Recession-proof Your IT Department

IT Staff Augmentation Model

Let’s now discuss the definition of IT staff augmentation services. Employees are recruited to the staff (typically by an outsourcing agency), and you have complete control over all stages of the development process (or a manager you appoint takes the lead).

The main difference between this type of cooperation and typical office work with extended staff is that these additional employees can be located in another country and operate in an office arranged by a specialized staffing agency.

These are the main benefits of IT staff augmentation model:

  • Employee mobility (you can plan a business trip to meet your new team in person);
  • Pricing transparency (you manage how many and which of your staff spend hours on other duties);
  • Easier search for new personnel (you won’t be constrained by territorial association, unlike the search for long-term office staff);
  • Maximum commitment to the project (employees will only be involved in the execution of your project, unlike outsourcing, when contractors can work on multiple projects simultaneously);
  • The option of choosing employees with reduced rates (for instance, Eastern European developers charge far less for their services than their Western counterparts);
  • A high degree of reliability (the staffing agency, who is the official employer of your new employees, is solely responsible for cooperation success);
  • The possibility for complete control throughout the project’s development (which is especially important for startups).

Despite the clear benefits of the staff augmentation model, it won’t be a good fit for those clients who are unable to manage the development process or expect to find a team for a challenging project within a week (as it may take longer to find specialists with a specific tech stack).

Related: How Much Does Software Development Cost?

Managed IT Services vs. Staff Augmentation: Which Model Should I Choose?

Although staff augmentation has certain short-term advantages, the strategy has more hidden costs than managed services. For instance:

  • Experts might not need special training, but every new hire should be educated in the procedures and equipment used by each client. An MSP trains its resources once it is aware of your environment.
  • Although adding internal workers can result in cost savings, staff augmentation raises management costs. Both of these cost categories decrease since MSPs control their own resources.
  • Your charges drastically increase if you need to expand your team because you are paying nearly the same amount for each extra resource. Yet you pay a set fee for a required service with the MSP model.

For CIOs hoping to see better returns over time for all IT projects, managed services are also a more appealing alternative. Growth is project-driven, but it might be challenging for an augmented team to provide results using the same deficient internal procedures that made it impossible for in-house staff to resolve the issue on their own.

MSPs provide professionals who can both solve problems and understand why they occur. As a result, customers actively develop their working methods under careful guidance based on industry best practices, all while enjoying predictable costs.

Basically, when your internal IT team needs additional help, they might turn to an outsourced IT team under a staff augmentation model. It is also practical when launching sizable, complex IT projects like switching to Office 365 or setting up a new VoIP (Internet phone) infrastructure. Business owners that lack the funds to recruit extra contractors and 24/7 full-time staff should choose managed IT services.

Final Words

It can be challenging to meet all of the company’s needs with solely internal professionals. IT service providers can help you hire dedicated developers that’ll have all the skills needed for the success of your projects. As a result, you will have access to highly skilled personnel who can begin working on the project right away. Keep in mind that before choosing any cooperation model, you should first analyze your needs and business objectives to achieve better results. Contact us to receive first-class consulting, and together we’ll determine which model fits you best.

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