Staff Augmentation vs. Managed Services: Choosing the Best Fit

In recent years, outsourcing has taken on significant importance in the business world, enabling greater efficiency and productivity in operations.

The two most effective models for business growth today are staff augmentation and managed services. When used correctly, these allow you to access a global talent pool quickly and efficiently, expanding your organization's options and growth.

Learn more about these two approaches and develop the ideal business plan for your company.

Staff Augmentation vs. Managed Services: Key Differences

Staff augmentation and managed services are outsourcing models that represent two great alternatives for hiring developers internally, providing organizations with the new staff or external partners needed to develop new projects and meet specific business needs.

However, each model is ideal for different needs, and each has advantages and disadvantages that should be considered when choosing the ideal business plan. We'll tell you about them:

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What is Staff Augmentation? 

Staff augmentation model is the temporary addition of external professionals to an established company to execute a project or fill skill gaps. This outsourcing model allows various companies to access experts in their field without having to hire them full-time.

It is especially suitable for short-term projects or where a specific skill and project-based work is needed for a limited period. This makes it beneficial for companies due to its greater cost-effectiveness, as it does not require hiring full-time staff.

It is commonly used in the following jobs:

• Software development
• Software engineers in various technologies
• Mobile application developers
• Help desk technicians
• Data analysts
• Digital marketing analysts

What Are Managed Services? 

Managed services models are a tool used to help companies recruit large-scale personnel to help them achieve their long-term goals and take over their operations, most of which are IT operations. However, they also operate in finance management, logistics, human resources, among other sectors. These services are provided by a third party who works in varying degrees of closeness with internal staff.

This third party is a Managed Services Provider (MSP), which performs the outsourced strategic functions under a predetermined contract.

The services provided and costs are negotiated between the client and the provider, where the MSP delivers a service and establishes a series of commitments with the client to continue the work.

The MSP and the client use key performance indicators (KPIs) to measure the provider's performance against the Service Level Agreements (SLAs) associated with those commitments.

In summary, the MSP is responsible for the work, the delivery model, the people, the training, the processes, and the tools used to complete the work. 

It is typically used in the following jobs:

• Monitoring and maintenance of servers, networks, and storage.
• Hardware and software technical support.
• Database administration.
• Cybersecurity.
• Technical support.

Pros and Cons of Staff Augmentation

Staff augmentation can be the solution to your project demands. We'll tell you about its advantages:

Pros 

Specialized Skills 

Staff augmentation offers you access to a pool of specialized professionals with extensive experience in a specific area. This is an effective solution when your in-house IT team lacks specialized skills. 

This ability to hire the best in the field significantly impacts projects, as it ensures that the staff is highly trained to meet requirements and, above all, do so within established deadlines.

Cost-Efficiency 

Without a doubt, one of the greatest advantages of this model, as it allows access to the best professionals in the area without the long-term commitment of hiring full-time employees, such as benefits, training, and overhead.

In short-term projects, the company only has to pay for the hours worked by the subcontracted staff, allowing it to optimize resources and budgets without sacrificing project quality.

Project Control 

The increased staffing gives the client a greater sense of ownership. This model is the ideal option if you want to maintain control over work schedules, as well as their execution and project quality. Because all of these resources are managed by the client, the likelihood of unexpected problems arising throughout the job is reduced.

Rapid Onboarding 

Allows for faster integration of new staff into established teams.

Flexibility 

Flexibility in your services is invaluable. Staff augmentation allows companies to increase or decrease staffing based on current needs and demands. This is important for organizations that experience fluctuations in workload or that require specialized skills only for short-term needs.

Cons

More Suitable for Short-Term Projects

This is not the ideal model for long-term projects. Staff augmentation is an effective tool for projects lasting less than 12 months, as its objective is to fill gaps in knowledge about a specific project.

Internal Training Requirements 

Since you are adding temporary staff to your team, you must provide assistance and guidance on how the company operates.

Established Workflows and Communication

When hiring new staff, the company must prioritize communication and organize workflows, especially if hiring staff from other time zones.

Pros and Cons of Managed Services

On the other hand, managed services offer other benefits that could be very useful for your project, such as:

Pros 

Streamlined Operations 

They help streamline operations by outsourcing entire business functions to an external provider. This offers the advantage of allowing the company to focus on other core competencies as the provider assumes responsibility for monitoring and maintaining the outsourced functions, improving company efficiency.

Enhanced Security 

Managed services providers have the latest robust security tools and the expertise necessary to protect company data and systems. This can help companies avoid data breaches.

Long-Term Support and Maintenance 

Managed services minimize project downtime by employing tools that provide continuous monitoring of work, enabling rapid problem detection and timely resolution before they disrupt operations.

Scalability 

Easily adapts to growing business needs, ensuring you always have the right level of support without the need for infrastructure investments.

Focus on Core Business Operations 

Outsourcing IT management allows in-house teams to focus on strategic initiatives.

Skills and Expertise 

Provides access to a team of IT professionals with diverse skills, allowing companies to focus on strategic initiatives and efficient project management. Additionally, MPSs keep company systems up-to-date, increasing team productivity, and offer training and support to assist users.

Intellectual Property Rights (IP) 

Important for asset protection and avoiding future legal issues. IP refers to the legal protection of software, trademarks, designs, and other creations, dedicated to ensuring that service providers and customers can use IP without infringing on the rights of third parties.

Cons: 

Security and Control Issues 

Directly reduces control over work processes and various operations.

Potentially Higher Costs 

Probably not the most cost-effective option, especially for small businesses.

Less Frequent Communication 

Managed services do not maintain direct communication with outsourced work processes.

Staff Augmentation vs. Managed Services: Which Option is Best for You?

When choosing the outsourcing model that best suits your business, various aspects must be evaluated. These are the main factors to consider:

Flexibility

Staff augmentation allows workers to adapt to changing business needs, while managed services typically require a long-term contract with the provider, which may provide less freedom to change work guidelines. 

The decision to choose one service or the other depends on whether immediate, temporary, direct control of the workforce is needed or ongoing, specialized support for the company.

This customization is precisely tailored to the organization's unique needs, ensuring that external talent aligns closely with existing teams and workflows.

Cost

Staff augmentation is more cost-effective for short-term projects, while managed services have higher and more predictable prices since a fixed monthly fee is charged for the management and maintenance of your IT systems. 

However, it is a necessary expense if the company requires it. Additionally, they can reduce costs by streamlining processes, increasing security, and providing long-term support and maintenance.

Level of Control

Augmented staff allows for direct project oversight and control, monitoring tasks to ensure they meet business goals and setting a timeframe for completion. This allows for adjustments to be made as needed to successfully meet project criteria. 

Managed services is a model that involves outsourcing specific company functions or responsibilities to an external provider, limiting direct control over operational details. This model retains autonomy on day-to-day decisions and operations. 

Security

Managed service providers specialize in security protocols, monitoring, and threat detection, offering a dedicated approach to safeguarding IT infrastructure and data. They typically employ a team of experts to address security vulnerabilities and proactively respond quickly to emerging threats. 

In contrast, staff augmentation is solely intended to add additional staff, so the level of security depends on the company's security practices and policies.

Project Duration

Staff augmentation is suited for short-term projects, while managed services are ideal for ongoing IT management.

Scalability

This is better for MPS. Although staff augmentation is flexible, it may require more effort to scale, as it again involves directly hiring additional staff for that specific task. Managed service providers, on the other hand, can quickly adjust resources and expertise to adapt to the changes a company needs to implement. This scalability is offered through service-level agreements (SLAs), providing a wide range of services that include basic support and complex solutions to problems.

These models should be chosen based on specific organizational needs, project durations, scalability requirements, and security considerations.

Frequently Asked Questions

If you have any further questions, don't worry, we'll answer the most frequently asked questions!

What Is the Difference Between Staff Augmentation and Managed Services?

Staff augmentation is the temporary hiring of staff to work in the company, while maintaining control over your team's work on the project. Managed services, on the other hand, involve hiring external providers to handle certain tasks.

Which Model Is More Cost-Effective?

Staff augmentation is often more cost-effective for specific, short-term project needs, as you have greater control over resources. Managed services can be cost-effective for ongoing and complex tasks, as providers offer specialized expertise and manage resources effectively.

What Are the Best Ways to Compare IT Outsourcing Models?

The different IT outsourcing models can be evaluated based on their location (offshore, nearshore, onshore). Once this is established, it's essential to assess the costs, quality of work, communication, and security offered by each model. 

Considering the budget, level of control, flexibility, and scope of work is crucial for its successful implementation.

What Are the Benefits of IT Outsourcing?

IT outsourcing is a powerful tool that offers numerous advantages, including cost reduction for companies, greater work efficiency, and access to specialized experts worldwide. This allows for scalability and improved collaboration and communication with employees.

Why Do Businesses Need Managed IT Services?

Managed IT services are essential because they provide businesses with 24/7 access to specialized experts, ensuring a stable, efficient, and secure IT infrastructure that manages daily operations and overall objectives. They also enable cost savings, proactive support, and scalability.

How Do I Decide Between Staff Augmentation and Managed Services for My Business Needs?

To decide between these two outsourcing models, it is necessary to consider the company's specific needs, taking into account short- and long-term objectives, the level of control required, and the cost-effectiveness that best suits its needs. 

Staff augmentation is preferred for specific, short-term projects, while managed services are ideal for long-term projects that require ongoing support, maintenance, and management of specific IT functions or projects.

Partner With Lupa Hire Is Your Best Choice for Staff Augmentation Services

Don't know how to get started? Lupa Hire is for you!

Lupa Hire is an agency specializing in talent recruitment in Latin America, staff augmentation, and RPO services, designed to successfully meet the needs and priorities of each client.

We use cutting-edge technology to select the best candidates for your organization, connecting you with top-tier professionals through staff augmentation services for both large enterprises and emerging startups.

We cover IT staff augmentation services as well as other sectors such as finance, marketing and advertising, graphic design, and more.

Lupa Hire is the effective solution for finding the perfect talent for your organization. Contact us today and magnify your talent pool.