IT Staff Augmentation Services vs Managed IT Services for Enterprise Resource Management Solutions

In 2019, my IT company Academy Smart was honored by Clutch with a leading position in the category of the top Staff Augmentation providers. As an active global IT contributor, we often get the question of how IT Staff Augmentation differs from traditional IT outsourcing, also referred to as Managed IT Services. When we start business relations with partners and clients around the world, one of the main dilemmas in cooperation models becomes – Staff Augmentation vs Managed Services.

So, what is Staff Augmentation Services and what are its specific differences from the Managed IT Services in a nutshell?

What is the difference between Staff Augmentation Services and Managed IT Services?

Staff augmentation and managed services have their respective sets of benefits, drawbacks, and underlying nuances.

Managed services model

Managed IT services (outsourcing) allows to quickly find an affordable contractor who would fulfill a specific task for a client company.

At the same time, the client doesn’t assume responsibility for the organization of jobs and handling of the related issues (like official employment, tax payments, insurance, etc.). It is also not responsible for the management of work processes handled by the contractor’s staff.

This saves the client’s time, gives the opportunity to find any specialists (with any qualifications and extensive expertise), and requires lower costs (because in a number of countries, the rates for IT development are much lower than in countries with a highly developed economy).

This hiring model is not without its drawbacks, however, mostly related to the lack of transparency in the formation of the services’ costs (dishonorable contractors can calculate man hours in their favor). Then, there is can potentially be a large number of corrections due to an incorrect understanding of the final product requirements.

Staff augmentation services model

Now let’s talk about the Staff Augmentation Services definition. With this approach, employees are hired in the staff (usually, a separate staffing agency is responsible for this), and you completely manage all the stages of the development process (or the manager appointed by you takes the wheel).

The only difference from traditional office work with an expanded staff is that these new employees can be located in another country and work in an office organized by the dedicated staffing agency.

According to the Staff Augmentation services in IT, this is how, basically, the whole hiring process looks like:

Talking about the ultimate benefits of temporary Staff Augmentation Services, these include:

• mobility of your employees (you can arrange business trips to your office);
• the transparency of the services pricing (you yourself control how many and which of your employees spend hours on another task);
• simpler search for new employees (in comparison with the search for long-term office employees, you won’t be limited by territorial affiliation);
• maximum dedication (workers will be involved only in the implementation of your project, not as it is typical for outsourcing when contractors can work on several projects at once);
• the ability to select workers with lower rates (for instance, developers from Eastern Europe ask much less for their services than their Western counterparts);
• high level of reliability (all legal responsibility of the Staff Augmentation Services agreement lies with the recruitment agency, which is the legal employer of your new workers);
• the ability to fully control every stage of project development (which is especially important for startups).

Despite the undoubted benefits of IT Staff Augmentation Services, this model is not suitable for those clients who are not able to control the development process, as well as those who expect to find a team for a complex project in just a week (because it may take longer to search for specialists with a special skill level).

Summary