Managed Services or Staff Augmentation, or Both: What Works Best for You?
Blog: NASSCOM Official Blog
The fast-moving world demands that enterprises stay upbeat and ahead of the competition. Such times ask for alterations and enhancements in the existing processes to meet the changing needs. There are no plug-and-play methods that work universally for all enterprises. Transformation is a journey of individuals and no company will have an exact blueprint, hence it is important to carefully devise a systematic approach.
The first step often is to map an existing model with new technologies and practices. This helps in identifying the gaps between the present and the future, setting a unified direction for the transformation. The later part of detailing and planning the actual implementation gets challenging as it involves multiple deciding factors such as budget, infrastructure, time, skillset, and more. The associated complexities increase in trying to keep the balance while juggling timelines, budgets, and skills.
The most common dilemma faced by IT leaders is whether to go for staff augmentation or managed services while adhering to the timelines and budgets. Let’s get into the details of both the services to evaluate what works best for you.
Staff augmentation is also popular as a flexible Business Process Outsourcing (BPO) plan that facilitates a pool of IT talent integrated into your internal IT team. This process enables the addition of temporary staff to the team to fulfill the required business goals. Staff augmentation allows a vendor to fill the positions as per the customer’s need and capacity from the pool of available talent globally on a short-term or long-term basis.
Advantages of Staff Augmentation
It helps organizations save costs incurred on hiring permanent staff when the requirement is temporary. Staff augmentation allows to hire a professional for a specific period.
Changing project requirements demand various skilled professionals, and this can be easily achieved with staff augmentation. It helps in finding project-critical resources in a short period as per the business need.
Project requirements keep on changing with the continuous evolution of technologies. This makes it difficult for companies to retain the staff skilled in niche areas. Staff augmentation can come to their rescue in such cases.
Limitations of Staff Augmentation
The cost associated in managing the augmented staff can add to the overall costs, which may prove to be a not-so-cost-effective solution for long-term projects.
If the project planning and managing processes are not efficient, it will become difficult to track the work done by the remotely augmented staff, which may, in turn, slow down the process.
Managed Services involved complete outsourcing of the IT management, support, or any project for improved business operations. In this case, a managed service provider (MSP) works full-time as an extended team by providing the required support and services as well as an internal team. Companies can leverage managed services to get professional business help to meet specific requirements without any need to hire an in-house IT professional.
Advantages of Managed Services
MSPs offer a scalable cost model, where the pricing is dependent on the outcome delivered to the customer, which can be changed as per the service demanded by the customer.
MSPs have a large pool of talent, comparatively larger than staff augmentation companies, which helps in providing a larger group of skilled individuals to meet the constantly changing customer demands.
MSPs are bound by timelines, service level agreement (SLA), and scope of work, which helps in gaining timely deliveries as MSPs are committed to delivering the planned work on time, helping improve the business value.
Limitations of Managed Services
It is important to find the right kind of MSP that aligns with your business goals to ensure you get what you expect.
The pricing model in managed services can be difficult to understand as they charge on an hourly basis. It often gets difficult to align the pricing with the work completed.
Staff Augmentation vs. Managed Services: What works best for you?
After understanding both staff augmentation and managed services, and their benefits and limitations, let’s now understand what works best for your business. It all zeroes down to the type of business requirements you need to fulfill. Both services work best for some or the other business needs. Choosing one model over the other might not be a solution, you might have to optimize the features offered by both and map them to your business needs. In the long term, managed services work best; most of the established companies go with the managed services model to gain the maximum value it has to offer. Staff augmentation also has its place in the industry that works best for some selected services.