Managed Services vs. Staff Augmentation

Do you want to engage with an outsourced team or augment your existing staff? Staff augmentation (in-person, outsourced, off-shored and near-shored) has become a popular method of improving staffing operations without committing to hiring internal staff. But it’s not always the best answer.

Let’s look at the differences between managed services vs. staff augmentation, the benefits of each and which is most likely to be best for you.

What is a managed service vs staff augmentation?

“Managed services” is an umbrella term that refers to various IT-related services. These managed IT services are provided by a third party that works to varying degrees of closeness with the internal staff. Staff augmentation, on the other hand, is a term used to describe the process of supplementing an organization’s workforce with additional personnel.

The main difference between the two is that managed services are a turnkey solution that provides comprehensive support, while staff augmentation is a convenient, expandable addition of personnel to an existing team. A managed IT service tends to be more flexible, whereas a staff augmentation service leads to a more integrated staff. Either can be used for project outsourcing, though a managed services model is usually more convenient.

Head-to-head comparison: Managed services vs. Staff augmentation

Now that we’ve defined each term let’s do a head-to-head comparison of managed services vs. staff augmentation.

Managed services:

• Offers comprehensive IT support and management
• Works with you to establish best practices
• Often includes proactive monitoring and maintenance
• SLAs may be in place to guarantee service levels
• Charges are typically based on a monthly fee

Staff augmentation:

• Involves adding personnel to an existing team
• Can be used to supplement in-house staff or outsource work
• Engagement is usually project-based rather than indefinite
• Can be sourced near-shore, off-shore, remote or in-person

These are, essentially, very different tools for different organizational needs. Depending on the needs of your project, it should be clear which service is more beneficial for your organization. If not, an MSP can help you determine which is ideal.

What are the benefits of managed services over staff augmentation?

There are several benefits of managed services over staff augmentation, including:

• Reduced IT costs. When you engage a managed service provider, they often assume responsibility for your IT infrastructure and management. This can lead to significant cost savings as you no longer need to pay for in-house staff or expensive consultants.
• Reduced training. Staff augmentation services frequently involve fairly extensive training, as they have to be integrated into your team.
• Improved efficiency. Managed service providers are experts in their field and can proactively manage your IT infrastructure, identify and fix problems before they cause downtime and keep your systems up to date. This frees up your in-house staff to focus on other tasks and can improve overall efficiency.
• Increased budgetary flexibility. Most managed service providers offer a pay-as-you-go model, which gives you the flexibility to scale up or down as needed. This can be particularly beneficial for businesses that experience seasonal fluctuations or sudden spikes in demand.

What are the benefits of staff augmentation over managed services?

There are several benefits of staff augmentation over managed services, including:

• Increased control. When you augment your staff, you retain complete control over the project. This can be beneficial if you have a specific vision for the project or if you prefer to manage it internally.
• Improved personnel flexibility. Staff augmentation allows you to quickly add or remove personnel as needed, giving you greater flexibility than managed services. This can be particularly beneficial if you only need staff for a short-term project or if you’re unsure of future staffing needs.
• Reduced costs. Staff augmentation can be less expensive than managed services, as you only pay for the personnel you need and don’t incur the overhead costs associated with an external provider.

Wait — Which is cheaper: An MSP or staff augmentation?

You probably noted that both an MSP and staff augmentation may have the benefit of reduced costs. In both cases, this can be true.

In scenarios in which you need an entire team, an MSP will generally be less expensive than hiring each individual staffer through staff augmentation.

In scenarios in which you need just a single person or a few people, staff augmentation will be less expensive because you aren’t paying for a whole team.

Many of the advantages and disadvantages of MSPs vs. staff augmentation will come down to these nuances — you need to know what you need before you can decide which service is right for you.

And, of course, if you need access to a dozen expert professionals, an MSP will be the only way to do that cost-effectively. Staff augmentation for specialists will likely be just as expensive as hiring employees or contracting employees for a project.

When is staff augmentation the best choice?

Staff augmentation is frequently a good choice if you need internal employees but only for a specific time — such as for a big project. Usually, staff augmentation will occur for at least six months, but it’s not an indefinite relationship. If you need a partnership that will persist, you may be better off either hiring employees or using an MSP.

Staff augmentation has become a popular method of replacing internal employees with a more flexible, scalable solution — but it’s not always the best solution because it does require an investment in frequently full-time “staff,” even if they are not directly hired.

Note that there are also services like workforce assistance which straddle the line.

Conclusion: When should you choose an MSP vs. staff augmentation?

If you need comprehensive IT management and support, an MSP is likely the better choice. An MSP doesn’t get rid of your internal staff and can help you with discrete services. If you need to supplement your in-house staff or outsource a specific project, staff augmentation may be the better option.

Still not sure which is right for you? Reach out to us at Red River. We can help you determine your organization’s needs, by assessing your organization’s current IT posture. Contact us today to find out more.

FAQs

What is staff augmentation?

Staff augmentation is the process of supplementing your in-house staff with additional personnel, usually on a temporary basis.

Is staff augmentation expensive?

It can be, depending on the personnel you need and the duration of the project. In general, staff augmentation will be less expensive than engaging a managed service provider (MSP) only if you need just a few employees.