- 15th Feb '23
By Mathieu Picard- 8 minutes read
IT Staff Augmentation vs. Managed Services. What’s Better and Why?
According to research conducted by Pew Research Center, only 20% of people worked remotely before the coronavirus outbreak. After quarantine began, the percentage increased to 71%. And now, 54% of those surveyed said that they would want to work from home after the pandemic ends. Indeed, the pandemic has shown that, for some professions, office-based work is not relevant anymore. Many specialists work from home without losing their working efficiency.
For the IT sphere, remote work is just as ordinary as the office-based work. However, now, IT companies hire remote workers more actively than ever before. This brings a lot of advantages. For example, you are not limited to hiring workers solely from your region. You are free to choose skilled workers from other countries that offer their services for a much lower price.
So, the outsourcing model allows optimizing your working processes, making them more effective and budget-friendly. There are two types of outstaffing to choose from and, in this article, we will help you define which of them is more beneficial for your business: managed development services or staff augmentation.
What are Managed Services?
Managed services is a type of outsourcing where the client hires an entire development team to work on a project from the very beginning to the launch of a product. According to Statista, the global managed services market was valued at 152.02 billion dollars in 2020. In 2026, it’s expected to reach around 274 billion.
Unlike conventional types of outsourcing that are mainly designed to cover strictly defined needs of clients, the managed services model implies a full transfer of work and responsibility for the project, budget, and scope of work to the development team. Project manager becomes the one to guide the team until the results are achieved, so you as a client don't have to be involved in the process. The solution of all problems lies entirely on the team. This allows you to take your time to solve business-related problems.
Managed Services Advantages
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It allows you to save money by paying only for the work done. Thanks to that, you can save costs by around 25-45%. Moreover, all the costs will be predictable as they will be stated in the contract. Good outsourcing IT companies are always clear about their spends, so you won’t have to worry about any unexpected service costs.
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You will get a more productive development team since a trusted managed services partner can ensure around-the-clock coverage of our needs unlike the in-house team model that has a balanced approach to work.
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Working with an outsourcing development team implies awareness about all the aspects of the development process, changes in the project, etc. It’s a standard procedure for a managed services provider to document the progress along the way of development.
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You will get access to premium tools for the cost of partnership as many IT teams invest in the best-in-class tools to increase the level of their service. As you hire the managed development team, the deal should include access to tools that work for your product.
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A qualified managed services partner will offer you a flexible service model that will allow you to focus on your objectives.
Managed Services Disadvantages
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An outsourced development team manages your project remotely, so it won’t be able to provide onsite support if such a need occurs.
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The in-house development team knows all the nuances of your business. An outsourced development team will never know your business as well as your employees do.
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The outsourced development team is not tailored to the specifics of your business which may possess some limitations. The managed service of your choice may just lack flexibility to fulfill the needs of your IT procedures.
IT Staff Augmentation
Staff augmentation is one of the more flexible outsourcing models that implies hiring external specialists to boost the performance of an in-house team on a temporary basis. This model gives the possibility to quickly bridge gaps in the projects with the help of skilled professionals. The IT staff augmentation companies offer highly skilled employees such as software developers, QA engineers, project managers,business analysts, designers, DevOps specialists, and others.
As you hire third-party workers, you take full responsibility for your project. They will just follow the instructions, but the main decisions will be made by you and your in-house workers.
The staff augmentation model has become very popular nowadays. Statista highlights that staff augmentation services raised from 5.2% to 6.3% in 2018-2020. These statistics show that more and more companies around the world are turning to staffing services to find experts with the right technical skills to meet their staffing needs. This happens because IT companies can't find workers with enough experience.
Staff Augmentation Advantages
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You can hire specialized professionals for a short period of time to work on a specific segment of the project. This allows avoiding excessive costs for full-time employees. Moreover, the salaries in Eastern Europe IT companies are much lower than those in Western Europe and the US.
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Web development companies can offer a variety of professionals to choose from, so you can hire the best workers based on the current and future requirements of your project.
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You can easily increase or decrease your development team by adding or removing certain specialists depending on the needs of your project which allows for great flexibility.
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The workers that you hire from staff augmentation companies focus all their working time exclusively on your project and delve into all the details and aspects of the product they work on. This allows for increased productivity.
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By hiring remote workers from staff augmentation companies, you are getting access to an international staff pool and can find specialists with high technical skills in any IT field. This way, you won’t waste valuable time trying to find suitable workers.
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You will get full control over the workers during the development process. They comply with your company's rules for the duration of the contract.
Staff Augmentation Disadvantages
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If the development process will turn into a longer-term project than you had expected, you will have to pay more money to the workers.
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New workers will require some time to get introduced to your project and your company.
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Some projects require deep knowledge about their specifics that only in-house employees can have.
IT Staff Augmentation vs Managed Services: Key Differences
If you are still hesitating which approach to choose for your app development, let’s take a look at the main discrepancies between the two models:
IT staff augmentation | Managed services |
| The outsourcing company offers you the CVs of candidates. It’s up to you to choose who will work on your project. | You don’t have to hire or fire developers that work on your project. You just pay for the work to be done. The vendor forms a team of workers that will get the work done. |
| The external workers that join the existing team will require some time for adaptation. | In the case with a managed services approach, the company you are hiring a contract with takes responsibility for integrating workers into your project. |
| If you want to get full control and take responsibility for all the processes, a staff augmentation model may be more suitable for your needs. You and your team make the core desidion, and the outsourcing workers just follow the rules. | If you don’t want to focus your attention on the development process, you will get more advantages when hiring a fully managed team. The project manager will take your role and guide all the processes instead of you. You can just monitor the process if you wish. |
| According to your budget and needs, you can hire as many workers as you need. | The composition and size of the team will depend on the vendor that will analyze your project and provide the necessary number of workers. |
| You pay for the time the workers spend while working on your project. | You pay for the scope of work. |
IT Staff Augmentation or Managed Services: What to Choose?
The managed team will be the best choice if you have no experience connected with software development. The team of dedicated developers will do everything to ensure the success of your startup. It’s also a wise choice in the case when you need to build an app for an already existing business as it allows saving time and money on choosing the right candidates to work on your project.
You can resort to IT staff augmentation services when you need to boost the performance of the existing team with new staff. It’s also a perfect choice when no one in your team has skills to complete specific tasks that may appear during the development process. You can also resort to staff augmentation when you need to replace certain workers and save money.
Mathieu Picard
CEO, Anyleads, San Francisco
We are the leading marketing automation platform serving more than 100,000 businesses daily. We operate in 3 countries, based in San Francisco, New York, Paris & London.
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