Difference Between Managed Services And Staff Augmentation

Staff augmentation always be necessary in a dynamic environment. There is much interest to evaluate converting staff augmentation engagements to Managed Services. a third party running a service for a company with agreed measurable outcomes, Managed Services promises to deliver greater cost savings and efficiencies the supplier more ownership of a process. Systems advocates that staff augmentation and Managed Service models are not mutually exclusive.

Managed services and staff augmentation

Staff augmentation

  • Staff augmentation evolved from a necessity to address short-term resource constraints, budgetary pressures and headcount limits.
  • This practice served the organization best when skills were required for immediate and short-term engagements.
  • IT and operation managers utilized external resources to fill internal resource gaps while avoiding hiring people into fixed positions. 
  • When the project was complete, the external resource would no longer be on the manager’s budget. 
  • This model worked well until staff augmentation started to be viewed as a long-term solution. Projects were completed; however, the external resource’s contract was not terminated.
  • As the external resource gained knowledge of internal systems, processes and people, he or she became valuable, if not indispensable. 
  • When one project ended, he or she was redeployed to the next project and continued as a contractor with the company for any number of years.
  • The continued growth in staff augmentation is due to a number of market factors, including.
  • The profusion of professionals preferring to work as independents, steadily declining rates, seemingly never-ending margin pressure facing most companies and corporate policies restricting hiring.

Managed services

  • Managed services clients look beyond traditional outsourcing criteria or hiring short term contractual staff to get the longer-term benefits they expect from a solutions partner. 
  • A traditional Managed Services model allows an organization to outsource 
  • The management, operations and delivery of processes effectively to lower a business’s total cost.
  • Managed services are the extra help that will save your day. With managed services, you’ll be free from necessary, but time-consuming tasks.
  • You’ll be free to focus the right people and resources on the right things. 
  • Strategic initiatives will fall into place all while increasing efficiency and productivity. 
  • This makes the model an attractive long-term strategy. The pricing structure, based on regular monthly billing around. 
  • Service levels and volumes, rather than per diem fees associated with staff augmentation, ensures that costs to
  • The business remain within forecast. The reduced volatility in costs supports accurate and predictable budgeting.

Managed services reporting and SLAs

Service should be continuously measured and reported, whether in a staff augmentation environment or a Managed Service. Managed Services reporting offers advantages by enabling a relevant and transparent end-to-end view for the end customer with a built-in focus on service performance improvement.

  • Business impacts are not accurately reflected in the current reporting
  • Reporting provides limited value in driving the right service debates and stimulating Continuous Service Improvement 
  • Reporting tends to be IT-centric and component-based 

Service performance indicator model

There is a rapidly growing trend towards a more mature and relevant reporting paradigm one that no longer focuses only on KPIs that are not measurable or relatable by the end customer. Based on the inherent alignment of business incentives in a Managed Service, service reporting becomes more focused and provides greater value to all parties involved.

  • The company and the supplier describe the scope of work, the pricing model and the KPIs for control in their Service Level Agreement.
  • The SLAs also describe in detail, which KPIs underlie and drive a specific SPl.

Comparing the models

If an organization is involved in a staff augmentation engagement, transitioning to a managed services model can yield all of the benefits of flexibility and skill access it seeks, while overcoming the major disadvantages associated with staff augmentation described above.

Conclusion

Staff augmentation has its place in an IT department’s arsenal. Even in a managed services model, staff augmentation is often utilized for selected services at specific points in time. staff augmentation becomes the de facto operating model for an IT organization, it constitutes an ineffective form of outsourcing that involves high cost, low commitment and high risk.