Business owners make many difficult decisions to ensure that deadlines are met and business operations go without a hitch. One such choice is picking between staff augmentation vs managed services. Both strategies have their benefits and drawbacks and understanding them will help you pick the one that works best for your organization.
Choosing which strategy to follow also depends on several factors that are unique to your organization. For example, if you need additional resources that can align perfectly with your existing staff’s abilities, augmenting may work best. Alternatively, managed services may be a more viable and cost-effective choice if you need technical expertise for specific tasks.
To help you pick the outsourcing model that works best for your business strategy and organizational priorities, we’re going to take a look at how staff augmentation and managed services work. After reading this guide, you'll know the advantages and disadvantages of both models, as well as when to employ each.
What Is Staff Augmentation?
The fundamental goal of staff augmentation is to quickly recruit a team that can make up for the shortage of workforce in your business. In theory, the staff augmentation service model enables you to support your technical team without adding permanent new employees. Resources are hired for a short period and will save you from handling HR and administrative difficulties while expanding your workforce.
Both full and partial staff augmentation models are possible. In some circumstances, an augmented team may completely take the place of the existing workforce. The project needs and the team's wide range of skills are taken into consideration when assembling the augmented team.
Since the augmented team can also handle the management and coordinating chores, they will also free up your time to take care of other business-related issues.
Pros Of Staff Augmentation
Below are some of the advantages of staff augmentation:
You can immediately address the staff shortages caused by unforeseen events by quickly gaining access to the resources with the required skill set. You also have the flexibility to immediately replace the resources if they can’t achieve desired business goals.
2. Decreased Management Problems
The management, internal processes, and risks associated with directly employing bigger staff are reduced with staff augmentation. You will stay involved throughout the process, view all the important details, and make all final decisions but you won't be dealing with any of the accompanying baggage.
Staff augmentation is a cost-effective short-term solution because you avoid paying full-time wages and employee benefits with this temporary hiring strategy. And since you’ll be hiring highly qualified professionals only for the time your team needs, you can save big on the payroll.
4. Increased Productivity
Staff augmentation boosts your business’s productivity because the staff you hire concentrates solely on the project you need them for. They collaborate diligently, paying close attention to the small details and handling your project as if it were their own. They also provide healthy competition for full-time staff members that may be lacking.
5. Easy Access To Special Talent
Staff augmentation can instantly overcome skill shortages when a software project requires specialist knowledge, allowing you to beat the competition by creating the most advanced products and providing top-quality services.
6. Fast Turnouts
Staff augmentation is handy when you are working under deadlines and time restrictions. It assists you in completing the assignment quickly and efficiently without having to compromise on the quality.
Cons Of Staff Augmentation
Every coin has two sides. Let's take a look at some of the disadvantages of staff augmentation.
I. Staff Training
Your supplementary employees will require training and orientation on the organization's internal procedures. This could potentially be time-consuming and will slow down the pace of the ongoing project.
Staff augmentation can swiftly replace traditional methods of employing employees because of the advantages and ease it can provide to a company. You might end up relying heavily on a single third-party provider, resulting in over-dependence on this service model. This can create an expertise void within your organization when contracts are over.
III. Suitable For Short-Term Needs Only
Staff augmentation services are only suitable for short-term recruitment needs. This "quick fix" approach can be detrimental in the long run as it shifts focus from laying a solid foundation for your workforce. It would be cost-effective to recruit an in-house team if your firm regularly needs resources to perform long-term duties.
IV. Long-Term Cost
Although having a staff augmentation team is easier on the budget in the short term than having permanent staff, it may wind up costing you more in the long run. You can get the optimum results only by making timely, decisive use of staff augmentation.
What Are Managed Services?
Managed services are a type of outsourcing where the development or management of an entire system, task, or function is handed over to third-party companies. It’s another powerful tool to use in growing your business since it fills a full-time employee role.
These companies have a qualified team of specialists to handle your business burdens and save you from the time-consuming chores of hiring and maintaining internal teams.
And managed services can be helpful in different use cases. For instance, if your company requires a certain technical output but you cannot be deeply involved in the process, then managed IT services can come in handy. Businesses with developing and long-term goals might also benefit from it.
Pros Of Managed Services
Managed services come with their benefits and we will be taking a look at the crucial ones.
1. Saves Time
Using this strategy, you can manage your time more effectively. After outsourcing your product to a managed services provider, you can focus on the expansion and future prospects instead of worrying about intermediate deliverables and on-time completion of the project.
2. Effective Management
Throughout the entire project, the provider monitors all of your company procedures and business models and makes sure that the necessary equipment and resources are at hand. By evaluating the project risks and creating an effective plan, the managed services company takes care of the development, execution, and management of the project.
Among all the available outsourcing models, managed services are the most cost-efficient as they allow you to hire an entire team of qualified and experienced experts with the necessary technology and resources to work on your project at minimal costs. Since this services model is generally based on paying for what you use and the volume of the work completed, it never burdens the hiring company.
4. Opportunity To Grow
If your tasks are carried out by a group of experts, it will save a lot of time and effort and you’ll be able to deliver the highest quality on time. And it means only two things - happy customers and business expansion.
5. Frees Up Resources
By using managed services, you free up your internal resources to work on more crucial tasks. This not only results in increased productivity but also helps in reducing employee burnout and turnover.
Cons Of Managed Services
Below are a few cons of employing managed services for businesses:
I. Full Access To Your Company’s Data
You are bound to give access to sensitive data and information about your company when you use a provider's services. There isn't any other way out of this, either. Therefore, you should be cautious when choosing a service provider and only put your trust in experts who have a proven track record of success if you want to significantly increase the reliability of this process.
II. Variable Costs
You increase your dependency when you choose managed services. You might have to hustle to find a replacement if your managed IT services provider is not meeting your expectations or goes out of business. Either way, it can harm your company.
This usually involves spending more and going through the hiring process to onboard a new firm all over again which will add to the cost of the project. And the newly hired managed service provider can have a higher fixed cost for their services.
III. They Might Not Meet Your Needs
Your efficiency and capacity to scale are constrained when working with an IT service provider that does not take your core business needs into account. This implies that you'll waste time and money hiring people who don't have the level of expertise required for your business strategy.
Staff Augmentation Vs. Managed Services – Which One To Pick
If you are a business owner in need of additional staff to fuel your expansion plans, comparing the staff augmentation vs. managed services models allows you to select a model that best suits your needs, is effective, and gives you value for your resources.
Your company, your mission statement, and your area of focus will determine which model is ideal. The complexity of your niche might make it hard, however, it is best to stick to one business model for effective results.
Each outsourcing model can be used in specific scenarios and use cases. Let’s take a look at them separately.
When To Select Staff Augmentation?
Staff augmentation is for you if you have a new or ongoing project where you need urgent assistance or a temporary solution. If you want complete control over the development process of your products, then you also consider this option.
Staff augmentation will provide you with a level of personal accountability that managed services cannot when it comes to making smart decisions. Be sure to choose a team that is experienced, smart, and has a strong set of credentials and talents.
Staff augmentation is your best bet when:
- You want to launch a side project
- You want to fast-track a product launch
- You need a cost-efficient recruitment service for your project
- You have projects that call for creating a team to work on them for a limited time
- You need a team of temporary staff to assist your in-house permanent employees
When To Select Managed Services?
You’ll need to find a credible, highly experienced managed services vendor who will assume responsibility for you if you lack a skilled project manager and are unable to undertake routine management.
Additionally, to avoid getting disappointed with expectations and outcomes, you must be aware of all potential dangers associated with this model and understand how to properly document contracts if you are prepared to transfer responsibility to a third party.
You need managed services when:
- You can afford the high cost of hiring a third party to oversee your business
- You want to hand over full management of a project or task to another company
- You have a long-term project that requires permanent staffing but you don’t want to get involved in routine HR matters
There are a lot of differences between staff augmentation and managed services as you may have seen, and it might be challenging to pick one. The answer is heavily influenced by your needs.
Both forms of IT outsourcing spare you the time and effort of finding the experts required to create your products and accomplish your company's objectives. However, managed services are less flexible and require you to give up certain controls, which is why many businesses prefer opting for staff augmentation firms.
You might have more significant success hiring augmented teams for your IT requirements than having a conventional in-house staff because IT outsourcing companies have some of the best resources.
How Can Aloa Help You With Your Staff Augmentation Needs?
Aloa is an outsourcing company that provides staff augmentation services. We deploy a vigorous vetting process, a custom-made project management platform, and a strict development process to deliver a seamless and consistent outsourcing experience for business owners.
Aloa, a platform for businesses of all sizes, helps remove the risks involved with the process of obtaining qualified staff members by leveraging our team of outsourcing strategists to hire qualified individuals for your long or short-term projects.
There are a lot of risks involved in outsourcing. You might not be familiar with the candidates you are about to hire or whether they share your concerns regarding the quality of the final product. And to help you with these woes, Aloa is always the wise choice.
Here’s what makes Aloa an ideal staff augmentation company for all your developmental needs:
A. Highly-Skilled Team
When you have short or long-term projects and need to hire highly skilled individuals to work on them, all you need to do is to provide full details of your project and the kind of candidate suitable for it and we take care of the rest.
Aloa has a dedicated team of well-trained and highly skilled developers and programmers that will add value and help train the existing team. We arrange workshops and training regularly to improve the quality and efficiency of our development teams.
B. Strict Vetting Process
At Aloa, we adhere to strict vetting processes to select qualified candidates to work on your project. Candidates with strong specialized skills and technical concept interpretation abilities are sought after.
We don't simply hire; we also perform technical checks on selected applicants to make sure they adhere to your business model, make efficient use of the internal resources made available to them, and contribute to the expansion of your company.
C. Provision Of Growth Strategies
When you use Aloa for staff augmentation services, we make sure to conduct an in-depth study of your business model and processes to build the best strategy for your company's expansion and improvement. Once this is done, we look for qualified candidates who can put these customized strategies into action.
D. Quality Performance Reviews
We carry out frequent audits at Aloa to guarantee that your projects always use the best and most recent techniques. We also conduct feedback sessions to improve our services. The frequency of these audits and feedback sessions depends on your requirements and regular reports of these are shared with all stakeholders.
Every IT organization may need an outsourcing service provider at some point. However, different challenges call for various approaches and software outsourcing models.
You should choose staff augmentation if you're searching for a temporary fix that calls for talent to join the team right away and fill certain gaps for a limited time. A few benefits of team augmentation are flexibility, cost-effectiveness, and close team communication.
Our team at Aloa can fully commit to your project through employee augmentation. As a result, you have more control and may approach scope and priorities with greater agility.
If you need IT staff augmentation services or need more information on outsourcing your projects to skilled workers, we are always available to guide you through it. You can reach us by sending us an email to firstname.lastname@example.org. We look forward to bringing digital transformation to your business.