Global IT spending is expected to increase by 7.5% by the end of 2024. With these ever-increasing costs of managing technology and hiring full-time employees, it’s crucial to explore more cost-effective solutions. So, you may be considering managed IT services vs. staff augmentation.
“Finding the right balance between cost-efficiency and meeting your tech needs is essential to your continuous growth.” – Ethan Gillani, CEO of Micro-Tech USA.
However, reducing costs can’t come at the expense of meeting your IT needs. If you choose a service model that fails to address your tech goals, you won’t truly save costs in the long run. Therefore, you need a detailed understanding of each service model before you pick one.
That understanding is the goal of this article. We will explore the key differences between managed IT services and staff augmentation to help you narrow down the best option for your organization’s specific needs. We will look at key factors and compare the two models against them.
Comparing Staff Augmentation vs. Managed IT Services
Cost Efficiency
Although both service models are less costly than expanding your in-house team, the managed services model is typically the most cost-efficient of the two.
That’s because staff augmentation can lead to increased costs due to the need for continuous onboarding, training, and maintaining additional team members. By comparison, managed services typically have a one-time setup fee.
Managed service providers also generally have their own software tools and hardware equipment. Therefore, you won’t need to invest in these tools for anyone new on your existing team, augmented or hired.
Scalability
Scalability and flexibility are crucial for businesses experiencing fluctuating project demands. Staff augmentation allows you to temporarily boost your internal team’s capacity quickly. The only problem is that the staff augmentation model doesn’t come with the same scalability as managed services.
The direct control provided by staff augmentation is beneficial for specific projects that demand specific skills or for maintaining institutional knowledge within the company. However, the slower scalability can hinder quick market expansion opportunities.
In this case, your choice may depend upon whether you need short-term help for a short-term project or if you need to expand your team for an unforeseen length of time.
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Operational Efficiency
Studies show that using managed services can increase operational efficiency by 60%. However, that doesn’t mean that using staff augmentation won’t provide a similar benefit. In either case, you get additional workers who can help expedite internal processes.
The problem is that staff augmentation offers a more limited improvement in operational efficiency since it focuses on adding temporary staff rather than optimizing overall processes. You will get the additional help, but you won’t get the strategic consulting that managed services offer.
Availability of Specialized Skills & Expertise
Both managed services and staff augmentation can help your organization fill skill gaps. Having this ability is increasingly important. As CloudSecureTech points out, 78% of businesses worldwide are facing a critical shortage of tech talent.
Staff augmentation may require more effort to find the right expertise, as it involves hiring individual professionals rather than leveraging a pre-existing team of specialists. MSPs bring collective expertise, which reduces the time and resources needed to find and onboard new talent.
Risk Management
Managed service providers are more likely to stay updated with compliance regulations and have security measures in place. This level of security can come with staff augmentation, but only if you work with an individual or individuals who hold this expertise. That’s less of a gamble with an MSP.
While augmented staff without pre-existing knowledge can be trained to adhere to security and compliance requirements, internal management bears more responsibility to ensure all standards are met.
Strategic Alignment
MSPs offer a partnership that extends beyond immediate project needs. They work closely with your organization to ensure that your IT infrastructure supports your long-term objectives. This strategic alignment can be particularly valuable for companies planning to scale in the near future.
Staff augmentation is often more tactical and stays focused on filling gaps and offering additional support. While this can be beneficial in the short term, it may not offer the same level of strategic guidance that managed services can provide. If your organization requires a partner that can grow and evolve with your business, managed services might be the better choice.
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Technological Innovation
Staying current with technology is crucial in today’s fast-paced environment. An MSP or the right individual from a staff augmentation service can help integrate these innovations into your systems smoothly and provide insights into how new trends might affect your industry.
The difference is that augmented staff are skilled in new technologies, but it’s up to your internal team to implement these changes effectively. If you have strong tech leadership, this might work well. If you don’t, it may be better to work with an MSP.
Impact on Organizational Culture
Managed services providers work as external partners, which can help maintain your existing culture without much disruption. Staff augmentation involves bringing new team members into your existing teams. While this can introduce fresh ideas, it might also create cultural challenges if the new staff doesn’t align well with your company’s values or working style.
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Think Managed IT Services Are Right For You?
If you’ve decided to try managed IT services, it’s important to recognize that not all MSPs are alike. Pricing structures and available services will vary, so you need to recognize your own needs and budget before you dive in.
If you already know what you’re looking for, talk to our team at Micro-Tech USA. We combine over 100 years of experience to ensure that all of your technical needs are strategically met. We also have experience helping our clients meet SOC 2, ISO 27001, and HIPAA compliance requirements. So, you know we have high security standards.
Reach out today to book a demo!