Staff Augmentation and Managed Services: Growing technologies have enhanced the competition in the global market by manifolds. The only thriving enterprise in the market is the one that works 24 x 7 x 365. The modern era digital market runs only on one engine-Information Technology. The growing market demands the IT sector to be fast and agile.
IT Outsourcing Services
The all-time evolving global IT sector is as expensive as it is sophisticated and desirable by the digital market. Therefore, outsourcing IT services is a common practice nowadays. Moreover, with the constantly updating IT industry and the severe repercussions of the pandemic, most companies prefer to outsource the IT work and hire dedicated Indian developers to avoid the lengthy, difficult and expensive hiring process for an in-house IT team.
In alternative to in-house recruitment for an IT team, there are two models of IT outsourcing. These are
- Staff augmentation
- Managed services
The choice of outsourcing model depends entirely on the type of project, the work scale, the company’s objective, and the time frame.
The outsourcing industry across the globe is one of the most desirable by the world’s biggest brands. By outsourcing a few processes to a third party, a business can concentrate its energies and resources on core activities. The outsourcing market in the IT sector is a one-stop solution to capacity issues. The dedicated, hardworking IT professionals enhance the service quality and aid in competently handling the corporate setting.
Outsourcing was initially commenced to reduce costs. In most cases, performing any specialized task inhouse needs more expertise and resources which can take more money out of your pocket. However, the new era is much more than just cheap labor. Now, the cut-throat competition, nimbleness, modernization, and availability of skilled IT talent are important factors that compel businesses to choose outsourcing in India over other countries.
Outsourcing Models
Staff augmentation is used to outsource IT inputs like functions and assignments to a third-party agency, aiding in short-term fast-growing projects. The outlays for this kind of service are subject to the time spent for the project. On the contrary, the managed services model is useful in outsourcing long-term IT management processes like security and infrastructure with contract-based billing.
IT staff augmentation
IT staff augmentation aids in modulating a company’s scale based on current scenarios and needs. It involves a temporary contract with skilled professionals as per the availability of projects. It allows organizations to select the best-suited experts from the market pool based on the industry’s requirements.
Though Small-scale enterprises outsource services in the staff augmentation model, there are instances when the titans of the market like Google, Spotify, and Disney have opted for staff augmentation to fruitfully improve their products and processes. Irrespective of how big the company is, IT staff augmentation can potentially boost productivity at a lower cost.
IT augmentation helps retain the autonomy of a project. The third party helps find the best person for the job keeping in mind the nature of the project and the IT niche involved- application building, software failure mitigation, coding assistance, etc.
Advantages
Outsourcing in the form of IT augmentation prevents the in-house team from burnout due to tedious IT work. This enables them to work on other productive leads of the project. At the same time, it bypasses the cost involved in hiring, overheads, additional office space, hardware, and software.
This is helpful to scale-up the company through assistance from world-class experts while working remotely and all these activities are performed without any compromise on the product quality. It also saves the company from the legal glitches and hassles involved with in-house IT teams. The parent company completely retains the capacity and staff selection in staff augmentation.
Disadvantages
The only demerit of IT staff augmentation lies in its short-term flexible project-oriented application rather than long-term IT heavy duty. Additionally, it may prove detrimental if the company lacks resources to manage the activities and a vision-oriented approach to supervise the outsourced IT team. In such cases, managed services may be more advantageous. Also, there is always a risk that the outsourced employee might lack dedication which might hamper the project.
The staff augmentation model has always been the best solution in terms of the professional experts hired. However, it seems incomplete when the developer is no longer bound to the company’s management as soon as the project is completed. The budgetary advantage of staff augmentation is lost in continuing periods and demands lasting solutions.
IT Managed Services
Managed IT services is yet another IT outsourcing model where the parent company outsources IT processes to a third-party agency. While the agency works as per the specific guidelines determined by the parent company, it takes over the charge of everything. The agency governs IT staffing, IT management, project implementation, and everything else as per the specifications of the mother company.
The contractual agreement between the company and the third-party outlines the results and deliverables. Constant follow-up and regular reporting of the process are necessary for this model of IT outsourcing. This kind of outsourcing is apt when a specific technical outcome is expected by the company which lacks the resources to do so.
Advantages
A company can sit back after outsourcing managed IT services and apparently forget about the IT issue. The in-house staff can channel into other activities of the company while the IT company entirely takes care of the project. It is an enduring resource-saving alternative in terms of both time and money for companies deficient in technical prowess and management possessions.
Similar to staff augmentation, managed services evade the legalities regarding the transactions pertaining to HR, payroll, taxes, and benefits.
The per-project basis billing of the staff augmentation model is converted to monthly service-based billing, which keeps the budget in check when the company requires a long-lasting service and looks to compartmentalize internal systems with a business agreement.
Thus, the model optimizes the value-add usage of internal resources and ensures continuous service improvement over time. It also reduces business risk resulting from high demand through a continued contractual agreement.
Disadvantages
However, the outsourcing costs of managed services are quite higher than staff augmentation and are not fit for small-scale companies. At the same time, the loss of autonomy in a project might be an issue for the parent company if the focus is on the incorporation of management and supervision. The biggest risk is the reliability of the provider.
Take-Home Message
Regardless of the choice, one should read the agreements of the third party and think logically in terms of autonomy, product development, company goals, and company guidelines to find compatibility with the outsourcing company and the outsourcing model. After all, outsourcing is all about filling internal gaps.
Hiring dedicated IT experts and their conglomerates might be the answer to a company’s IT problems, regardless of the outsourcing model. With every fifth or sixth person being a techie in the modern world, IT outsourcing should not be a problem.
Conclusion
We can’t really compare apples to oranges. It is a similar case with IT staff augmentation and managed services. The preference of the company for the two depends entirely on the business model. Every company is unique pertaining to its requirements. The suitability can be decided by comparing the pros and cons of the outsourcing models based on the company’s perspective.
Nevertheless, it is clearly evident that IT outsourcing saves time, resources, and energy, resultantly increasing the productivity of the company.
