It is a tricky question to answer. Before businesses make up their mind to opt for a staffing model, it is worth to take a close look at what each model has in store for companies.
What is Staff Augmentation?
Staff augmentation allows organisations to add workforce as per project requirement. Augmentation of staff means you are adding temporary resources to your team. These resources are people withexpertise in a specific field. The hiring company does not employ these resources, the staff augmentation agency does. One of the biggest advantages of staff augmentation services is that clients can easily increase or decrease the resources to meet the changing IT requirements. All this without incurring the expenses and liabilities of managing full-time employees.
Some companies prefer hiring staff at the start of a project. While others bring in augment staff right before the product release for reviewing purposes. The objective may differ based on the capabilities of the augmented staff or the purpose of hiring them.
What is Managed Services Model?
Managed services model is about hiring a team through an outside businessfor a set amount of time and with specific deliverables for a specific project. The firms that outsource workers, often called managed services agencies or outsourcing agencies, are professionally managed services with an emphasis on helping your business meet specific company goals. The managed services companies get into a contract before the work begins.In a managed services model, a company outsources the management, operations and delivery to an external service provider. This allows the clientorganisation to minimize the total cost of the business and focus on its core business functions.
The decision of choosing hiring or deliver model is dependent on the needs of an organisation. However, it makes sense to first understand the pros and cons of each model and select an approach that allows timely delivery of projects, budget regulation, or fulfilling specific demands of a client.
Comparison BetweenManaged Services Model And Staff Augmentation Model
The managed services (outsourcing) model differs from staff augmentation in the following ways.
| Managed Services Model | Staff Augmentation Model |
| Managed service provider has the control of all executional processes. | Staffing agency commits to providing resources of defined capability at a price. |
| There is a well-defined service delivery commitments with clear targets. | There is no service delivery commitments relative to outputs. |
| Higher commitment with clear scope and terms of work. | Limited commitment with changing scope of work. |
| Pricing is tied to service levels and volumes. | Pricing depends on the number of hours worked and the availability of skilled workers. |
| Supplier managed delivery model, processes and tools. | Customer managed delivery model, process and tools. |
| Informationneeds to be documented and transferred. | Knowledge is vested in the individual worker.
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| Outcome centred model | Input centred model |
The key difference between the two models is that under a managed services model the provider is committed to delivering an outcome. Whereas a staff augmentation firm is committed to providing input. An input can be defined as the performance of an activity by a worker with no commitment of results. Whereas an outcome is a result based delivery for a fixed price in a given period of time.
The managed service model derives at pricing based on the client’s requirement of a service level and performance standard. This provides clients with the advantage of ‘scalability to demand’. Scalability is also the virtue of a staff augmentation model, but there the scalability is tied to service not an outcome. Staff augmentation model only offers service commitment to hours of work. Under the managed services model, the provider takes responsibilityfor the risk of meeting the outcome commitment.
Since the provider agrees to a particular delivery at a fixed cost, he is highly incentivized to establish productivity measures. You can expect him to implement robust tools and processes, as well as adopt extensive documentation. The managed service provider cannot afford to risk not meeting the service commitment by relying on individuals.
Documentation and process rigor allow the service providers to deliver services reliably with fewer, more productive resources. Since the model relies heavily on management and process rigor, clients generally experience an elevated capability themselves.
The managed services model, therefore, delivers a commercially viable, low-cost service offering. From the standpoint of IT, the managed services model delivers the following advantages:
- a predictable low price
- scalability on business demand;
- fewer delivery risks;
- operational performance metrics tied to process excellence
- documentation and outcomes.
The big question now is — which delivery model best suits your business? The truth is that while staff augmentation works well for certain requirements, there are other areas for managed services modelworks well. For some cases, a hybrid approach works better. You may want to try working interchangeably with managed services teams and staff augmentation firmsat different points in the project, starting from the development phase until completion of the project. Irrespective of the approach you choose — staff augmentation companies, managed services, or a hybrid approach, the fact remains that companies and employees will benefit from the additional staffs that save time and money.
However, we understand that selecting the right delivery model is just the beginning. You have to then select the right staffing partner. Thiscan be a tough decision. If you cannot take the decision internally, it’s better to seek advice from an IT staffing consulting firm. Focus on finding a service provider who has a comprehensive understanding of your business and delivers the best results.
At Collabera, the biggest advantage that we give our clients is our technical expertise. It remains our dominant strength. We offer a unique blend of managed services to our clients in the field of Application Co-engineering Services, Network and Infrastructure Management, Big Data and Analytics, Cloud COE, Agile Transformation and DevOps and Integrated PMO Services.
Collabera’s managed services model provides a holistic approach to client’s IT needs on an ongoing basis to ensure cost-effective solutions in the long run. You can be assured of outstanding outsourcing experience with Collabera as we have client certified and secured proximity development centres in the U.S. and APAC region. This enablesus to offer scalable, flexible and secure IT managed services.
In the field of staff augmentation, we are one of the best global staffing companies. We put all our strengths together to make you the employer of choice. We work as consultants who can advise you on strategic HR solutions and keep you ahead of your competitors. Our more than 25 years of experience in supporting many clients including Fortune 500 clients is our strength. We leverage this strength to identify candidates with an ideal blend of technical skills and relevant experience. Our years of experience and quality centric approach becomes the perfect formula to realise your full business potential.