Staff Augmentation Vs Managed Services Vs Project Outsourcing

March 19, 2023
Table of content

In a post-pandemic world, outsourcing is becoming a new norm as more and more companies are gearing up for IT outsourcing. Finding and hiring an in-house IT staff is a time-consuming and costly practice and is not a sane decision if you have a limited-time project.The two main outsourcing models are staff augmentation and managed services. Many outsourced services such as testing, coding, design, and development can be utilized for the project, or a project can be outsourced. On the Darkside, outsourcing may also possess risks and vulnerabilities due to the client’s low degree of control.[lwptoc skipHeadingLevel="h1,h4,h5,h6"]Most of the time, businesses struggle to choose between staff augmentation and managed services. IT departments that need to introduce innovation or updates will need to outsource them to attain their goal as per plan. This blog post will discuss what project outsourcing is and what it can offer in terms of its subordinates, like staff augmentation and managed services.

What is Project Outsourcing?

Challenging projects require support not only in back-end development but also in Front-end, User interface, project management, software quality assurance, pushing the need for the expansion of IT outsourcing and staff augmentation might not be sufficient enough. It usually happens when launching new products or startups and integrating some advanced features in existing systems or rebuilding systems. The outsourcing vendor then provides extensive services to meet the project’s specific requirements and manage it with great efficiency, mostly via the Agile approach to deliver the product on time and maintain high standards. This collaboration possesses a variety of possibilities and less attention from the client.

Advantages of Working with Project Outsourcing

The nature of this outsourcing model presents the following advantages:

  • Cost reduction
  • Faster project completion
  • High level of expertise
  • Flexibility

Let’s dive into details.

Cost reduction

Companies can enjoy the perks of competitive prices for contracted services, especially if the project or service can be outsourced from an offshore vendor. Furthermore, overhead costs are reduced to nil since the company no longer needs to handle the contracted services internally.

Faster project completion

Cost reduction also provides an opportunity for faster project completion as competitive pricing means more resources for the same investment amount. For instance, you can hire three Indian software developers for the price of one US or UK-based software developer. Furthermore, outsourcing can provide access to tools and methodologies that can accelerate the project life cycle process.

High level of expertise

State-of-the-art expertise can be imported to shape the project. A company no longer has to stay updated with the shift and arrival of technological advances. Instead, it can focus on improving and reshaping its core competencies and hire vendors with the necessary knowledge to work on relevant aspects of the project.


Organizations are no longer dependent upon their resources but can enjoy the perks of extensive projects by combining their resources with the skills of an outsourcing partner. Small or mid-sized organizations can instantly expand their limits by collaborating with foreign talent.

Project Outsourcing Vulnerabilities and Risks

Project outsourcing comes amidst some vulnerabilities and risks.

  • Coordination breakdowns
  • Loss of Control
  • Fear of Conflict
  • Security Concerns

Let’s discuss each in detail.

Coordination breakdowns

Coordination of experts from an outsourced company can be a headache, especially if the project demands rich communication and mutual compromise over certain aspects. Breakdowns are exacerbated due to a physical barrier in space and mental synchronization with people working in different offices or even different cities. Another barrier is the difference in time zones that remains instrumental in breaking coordinates in cross-continental outsourcing.

Also Read: IT Outsourcing for Healthcare Industry

Loss of control

There is a potential loss of control over the project as the core team depends on other organizations with a lack of direct authority over the employees and management of outsourcing service providers. While the long-term survival of involved entities is directly linked with the performance, a project always remains on the verge of failure if one side fails to deliver as per commitments and true expectations.

Fear of Conflict

Projects are more vulnerable to damage caused by interpersonal conflict since the different participants do not share the same ethical values, perspectives, and culture. The trust factor, which is crucial for the success of a project, can be difficult to maintain due to limited interactions and people from different organizations and cultural backgrounds.

Security Concerns

In today’s data-driven world, almost all projects involve a high degree of information sharing between the involved companies, which comes amidst the compromise over trade and business information confidentiality. It turns out to be disastrous if the contractor also works for your market rival. Confidentiality is the biggest ever concern, and companies have to be very careful while outsourcing systems involving payroll, medical transcriptions, and insurance data.

Managed Services

This Outsourcing model is based on similar principles as Project Outsourcing but with a notable difference - it demands a continuous delivery of services from the vendor. In this case, a client usually entrusts the outsourcing service provider with a whole process or system. Usually, it comprises a secondary aspect of its operation. The partner has control over it and its outcome so that the company choosing Managed Services can focus on the more crucial and core areas of the business. The service is well-determined and locked under the Service Level Agreement’s pact, an agreement between the service provider and the client. Managed IT services are more lengthy and long-term involvement as it is a continuous and mutual reinforcement for both client and service provider. The Brightside and downside are pretty much the same as in Project Outsourcing, including the advantages of long-lasting cooperation like stability and cost cuts. Managed services are the corporate model that is not always offered by software houses, so you need to consider the more limited domain of finding the right vendor.

Managed Services Perks and Benefits

The nature of this outsourcing model presents the following advantages:

  • Saving time
  • Access to the best talent
  • Focus on your core competencies
  • No recruitment headache
  • Lower operational & development costs

All of the said perks are not always present in every situation. Everything depends on your requirements, priorities, specifications, circumstances, and especially the outsourcing vendor you choose. So let’s analyze each of them in detail.

Saving Time

The most obvious reason to choose this model is the time factor. Since you don’t have to deal with the management of the developer’s team by yourself and the outsourcing partner deals with everything, you save a big chunk of time. After all, the only thing you need to do is provide crystal clear requirements and specifications and ensure rich communication with the company.

Access to the Best Talent

Software outsourcing companies are the biggest rivals in the HR market. They often mark the victory and win the best developers. It means they restrict the direct access to the best talent, and you cannot directly hire them. Therefore, in many cases, the only way to open access to the best talent worldwide is to work with an outsourcing firm having the best and right developers you need.

Focus on Core Areas

Outsourced team members allow you to focus on core business areas such as growing your business. The outsourcing company deals with the development area so that you can primarily focus on the stuff which best suits and demands your capabilities.

No Recruitment Challange

Like project outsourcing, Managed services free you from running any recruitment drive as the outsourcing firm already has full-time developers onboard. Your outsourcing service provider can further search for and recruit qualified developers based on your customized requirements.

Reduced Operational & Development Costs

Since you don’t need to hire an in-house work team, you cut operational costs as well. After all, you don’t have to provide office space, advanced equipment, payroll, insurance, allowances, and other employee benefits.

Managed IT Solutions Disadvantages & Risks

With some advantages above, there also come certain risks and disadvantages you must be aware of:

  • Possible higher costs compared to staff augmentation
  • Less control on your side
  • Reliability

Let’s discuss each of these in detail.

Higher Costs Compared to Staff Augmentation

Unlike staff augmentation (as we will discuss in the following content), managed services leave the space for the involvement of other stakeholders besides developers themselves. This adds up to the net cost of outsourcing. In some cases, this extra cost makes managing services more expensive than using staff augmentation, as you will see later.

Loss of Control

Control and responsibility on the developer’s side are both a curse and blessing simultaneously. Sometimes little control and utmost liberty are devastating. How much control you need ultimately depends on your specific circumstances, requirements and priorities. If you choose the wrong vendor, then full control on their side does not serve as a sweet dish; instead, it may ruin your project.


Whether you find a reliable outsourcing partner or not is likely to determine the destiny of your project. Reliability is one of the major concerns while choosing managed services. The only way to curb risk here is to carefully and consciously run the partner selection drive.

What is Staff Augmentation?

Instead of absolute outsourcing (that was the case earlier), this solution is based on hiring several developers for a specific time scale or developing a particular project segment. It works like an extension of the existing human resource. The outsourced team members work with the in-house team, contributing their skills and knowledge and offering different perspectives and solutions. Upon opting for staff augmentation, the company focuses on contemporary requirements and hires software developers with the necessary skillset required in the ongoing project.

Also Read: How to Save 70% Revenue Using Staff Augmentation

Advantages of Working with IT Staff Augmentation Companies

Staff augmentation presents some unique advantages:

  • Less recruitment headache
  • Lower operational costs
  • Lower development costs
  • Less legal headache
  • Access to the rare and needed specialists
  • Control on your side

Let’s take a look at each in detail.

No Recruitment Headache

You can free your shoulders from the burden of searching and hiring the right talent. The staffing company does that for you. You provide detailed requirements, and they handle the rest.

Reduced Operational Costs

You don’t have to provide office space, transport facility, and employee benefits to your remote employees. The staffing company handles it for you as well.

Lower Development Costs

Your remote developers are most likely offshore, which in turn reduces the rates and total development costs.

Less Legal Headache

The staffing company deals with most of the legal liabilities for the developers as their official employers. Therefore, it only leaves room for very brief paperwork and legal formalities on your side.

Access to the Unique Talent

Staff augmentation expands your boundaries by providing you with direct access to state-of-the-art IT experts around the globe. You don’t always have direct access to them or communicate with them directly, but this model opens you a channel for direct access.

Control on Your Side

Finally, this model provides direct control on your side. Since you are the one who deals with the team directly and manages it, you are the one who has rich control and authority over it.

IT Staff Augmentation Disadvantages & Risks

Staff augmentation is not everyone’s cup of tea. There are certain downsides and risks which you must be aware of:

  • Management resources are necessary
  • Reliability
  • Staff deficit

Let’s break them down in detail.

Management Resources and Capability Needed

With notable benefits, staff augmentation also comes amidst some downsides in managing the remote development team on your own. This usually requires your company to have the right stakeholders who can handle this task effectively.


Just like Managed Services, partner reliability is one of the primary concerns in Staff Augmentation. Getting the wrong staffing partner may ruin your project. For the said reason, it’s crucial to take every step with great caution by ensuring that your potential staff augmentation vendor is a reliable one with rich experience and a track record of dealing with similar projects like yours.

Staff Unavailability

Sometimes it’s not as easy as it sounds to find the right developers at the tip of a finger, or at least not as fast as you’d think. However, that doesn’t happen frequently. Such problems pop up sometimes in staff augmentation, depending upon your requirements and the place where you’re looking for developers.Why not own the R&D Team?Suppose you are gearing up to integrate 40 experts into your team. In that case, you can set up your Research and Development (R & R&D) team with a sustainable business environment and extended domain of tech talent pool. But handling your R&D team comes amidst the responsibilities related to the legal liabilities, learning and adapting cultural dogmas, and running all of the risks independently.

How to Outsource the Best Managed IT Services or IT Staff Augmentation Vendor

There are a few things you have to take into consideration while outsourcing.

Previous experience

This is the most crucial aspect to note when choosing a potential outsourcing partner. The outsourcing firm you are considering collaborating with must-have rich, relevant experience with projects like yours.

Pricing model

You need to ensure that the pricing model is transparent, fair, and free from hidden charges. It has to provide you with the best price possible.

Legal information

It’s recommended to check the company’s legal information. How long they have been serving, the key stakeholders, and if there have ever been any lawsuits, etc., tells a lot about a company’s reputation.

Portfolio/Past Experiences

Ask the outsourcing service provider to provide a detailed portfolio of their developers. Carefully review their expertise, academic qualifications, certifications, and experience.

Communication Medium

To eliminate the communication barrier and related problems, you must ensure that the management and development teams know your language or central medium like English. You can ask them to provide any relevant certifications which confirm their level of English fluency.

Testimonials and Reviews

Last but not the least, carefully go through the testimonials & reviews and ensure they are real. It is even better to talk to their past and contemporary clients and ask about their experience while outsourcing with the same company.Of course, there might be many other factors to consider depending upon your needs and specifications. But in general, ensuring these criteria is the most important for any company gearing up to outsource a team, project, or services.


All models have their advantages and disadvantages and, notably, show different efficiencies in different situations. Staff Augmentation is ideal for project scaling when a certain skill set is required, and your in-house employees cannot find all the solutions. In such a case, external developers will simply fill in the voids. This temporary and to-the-point engagement makes it cost-effective and flexible. On the other hand, Project Outsourcing would be a great alternate if you are looking for a reliable partner offering various services to complete a whole project independently. The provider collaborates with you by sharing their expertise & knowledge and becomes responsible for the project’s outcome while focusing on core business areas. Last but not the least, when it comes to long-term engagement, you should opt for the Managed Services model. Every model offers different perks based on its nature and layout, but the final choice should be based on your ultimate business goal and the nature of the project. Each company has its definition of assistance and collaboration. Therefore, it is vital to consider the benefits of all available options and then select the model that fulfills your requirements. Once you decide, you should also ponder other aspects of outsourcing, such as the differences between offshoring, onshoring, and nearshoring or preparing yourself to find a dedicated outsource vendor. By researching in advance between Staff Augmentation Vs Managed Services Vs Project Outsourcing, you can find the outsourcing solution that best suits your specifications and requirements and provide your company with some state-of-the-art and talented experts from the world.

Related articles

Staff Augmentation
How to Save 70% Revenue Using Staff Augmentation
5 min read

Staff augmentation is an outsourcing technique used to achieve organizational targets efficiently. This approach involves assessing current employees and determining the need for additional expertise. The economic benefits, improved organizational productivity, enhanced customer service, access to emerging technology, and increased versatility make staff augmentation a popular choice for outsourcing businesses.

Can Staff Augmentation Save Your Revenue?

Absolutely. Utilizing staff augmentation services can lead to significant cost savings for your company, often reaching up to 70% or more in certain cases. Read on to discover how this strategy can work wonders for your business.

According to a report by Global Workplace Analytics, a remote workforce can save companies an average of $11,000 per employee per year. By leveraging staff augmentation and tapping into remote professionals, companies can achieve substantial savings without compromising productivity.

Reasons Behind Companies' Adoption of Staff Augmentation

Companies aiming to expand their workforce and execute IT strategies often find value in entering contracts with IT consultancy firms that provide highly skilled workers. This approach offers cost savings compared to hiring additional in-house staff.

Companies have the flexibility to directly select employees and utilize various approaches for their staff augmentation model. The vendor handles logistical and operational matters while the company focuses on core projects with its augmented teams.

Did You Know?

  • Approximately 300,000 jobs are outsourced annually in the US.
  • In 2020-2021, about 55% of small firms had intentions to outsource business processes.
  • The US Staffing Industry is projected to exceed $150 billion by 2024, according to Research and Market Study.

Maximizing Cost Savings Through Staff Augmentation

Staff augmentation proves to be a cost-effective solution for businesses, yielding several benefits:

Unlock Scalable Growth Opportunities

Harness Staff Augmentation for Rapid Expansion

Book a Call

Recruitment and Training Cost Savings

Recruitment is a costly procedure. When recruiting a resource, internal recruiters must identify potential candidates, assess them, and navigate through complex interview procedures. Venturing into new markets often necessitates additional labor or costly partnerships with organizations that offer enterprise-level hiring solutions.

Employee raises can lead to significant cost savings. With increased staffing, companies gain access to the global IT services they require while curbing unnecessary expenses. Workloads and costs tend to rise during the hiring, training, and onboarding processes. Increasing your workforce in various sectors can enhance team capabilities while maintaining cost efficiency. By streamlining the team's workload and minimizing expenses, additional work is alleviated.

A study by Deloitte found that the cost per hire for a full-time employee can range from $4,000 to $7,000. In contrast, staff augmentation allows businesses to skip these expenses and access skilled individuals at a fraction of the cost.

Easy Scalability

Scaling your workforce cost-effectively is achievable through staff augmentation. By curtailing expenses and attracting top-tier talent for projects, businesses can achieve faster growth compared to hiring additional full-time employees. Workloads across various sectors are in a state of constant evolution. 

Opting for temporary hiring presents an ideal solution for maintaining project-by-project control while adhering to both current and future requirements. This approach allows for increased output without compromising project efficiency.

Additional Costs 

Companies require robust strategies to navigate emergencies effectively. For instance, the COVID-19 pandemic compelled workers to transition to remote work. Having an augmented team can significantly mitigate expenses during such situations. Notably, in situations like these, the flexibility of an augmented team can yield cost savings.

Recruiting the wrong employee can lead to substantial financial losses, a challenge that is becoming increasingly prevalent. However, employing a remote approach can help you secure the best candidates. Once you onboard individuals who possess the necessary skills, backed by positive reviews and performance records, the likelihood of assembling the right team increases significantly.

By adopting a remote work setup, you can also achieve substantial savings. Operating remotely eliminates the need for extensive office space, potentially saving thousands on rent. Additionally, expenses related to utilities, furniture, equipment maintenance, security, and other overheads can be significantly reduced.

Retain Control

While staff augmentation involves a form of outsourcing, it empowers businesses to retain control over their teams. A significant advantage is the ability for companies to closely monitor the progress of their temporary workers. This approach often mitigates challenges associated with fully outsourcing tasks to external entities. It aids businesses in safeguarding the confidentiality of their projects while facilitating project evaluation.

Introducing a new team can bring forth insightful suggestions for refining projects or procedures. This external perspective targets enhancements and bolsters workplace productivity and innovation. 

Furthermore, each workplace possesses a distinctive environment. Project-based, temporary team members are less likely to become entangled in office politics, making them conducive to focused collaboration.

Engaged and Dedicated Employees 

Remote workers tend to be highly engaged in their tasks, displaying a strong sense of attentiveness. They generally take fewer leaves unless faced with emergencies. 

Moreover, they are likely to dedicate more time to work, as they eliminate the need for travel and enjoy the comfort of their chosen work environment. This commitment results in a notably low turnover rate, serving as a potent retention tool for businesses. 

The increased efficiency in task completion enables the pursuit of additional projects with the same team. Ultimately, this presents a cost-effective and sustainable approach in the long run.

Revolutionize Cost Management

Embrace Remote Work with Augmented Teams

Call for Cost-effective Solutions

Factors to Consider When Calculating Savings

Hourly Rates and Contracts

When evaluating the potential cost savings of staff augmentation, hourly rates and contract durations play a crucial role. While augmented staff might have slightly higher hourly rates, these costs are offset by the absence of long-term commitments and the flexibility to hire for specific project phases.

A study by Staffing Industry Analysts found that, on average, the blended hourly rate for staff augmentation is approximately 15% higher than for full-time employees. However, when you factor in the savings associated with recruitment, training, and benefits, the overall cost-effectiveness becomes evident.

Hidden Costs

While the cost savings of staff augmentation are impressive, it's essential to consider potential hidden costs. These may include communication tools, project management software, and initial setup expenses for remote workers. However, these costs are typically lower than the continuous expenses of maintaining an in-house team, making the overall cost advantage still substantial.

Best Practices for Maximizing Savings

Clear Project Scope and Goals

To ensure optimal cost savings through staff augmentation, start by defining a clear project scope and goals. This clarity helps in avoiding scope creep, which can lead to unnecessary costs. Effective communication with augmented staff is essential to align expectations and prevent budget overruns.

Effective Project Management

Project management plays a vital role in optimizing staff augmentation for cost savings. Project managers are responsible for efficient resource allocation, task delegation, and timeline management. A well-organized project ensures that augmented staff members are working on tasks that directly contribute to cost-effective outcomes.

Regular Performance Assessment

Regularly assessing the performance of augmented staff members is critical to ensuring that you're getting value for your money. If a particular resource isn't meeting expectations, staff augmentation allows you to switch to a better-suited professional without the costs associated with terminating an employment contract.

Optimize Your Workforce for Success

Discover the Power of Staff Augmentation

Book a Call


Businesses are increasingly turning to staff augmentation to save a substantial portion of their annual expenses. Alongside the points discussed in this article, several other factors contribute to the exponential growth potential and up to 70% revenue savings that staff augmentation can offer.

Staff Augmentation
Staff Augmentation vs Managed Services: Which is Right for You?
5 min read

The Staff Augmentation vs Managed Services comparison is taking off and getting popularity in the IT industry. Both are popular among organizations and businesses that want to optimize their operations. But how do you know which one is right for your organization? We’ve covered the topic in detail while discussing both processes at length.

In today's competitive business landscape, organizations, especially IT companies, need skilled professionals with the right experience. However, it can be challenging to decide which staffing solution is the best fit for them. Two popular strategies that can help address these concerns are staff augmentation and managed services. And while both approaches involve leveraging external resources, there are distinct differences between the two.

In this blog post, we'll explore staff augmentation and managed services by comparing their key features. You’ll get to know their definitions, how they differ as well as their benefits and drawbacks. By understanding these, you'll be better equipped to determine which approach is the right fit for your business.

So let’s start with the basics!

What is the difference between staff augmentation and managed services?

Staff augmentation involves hiring temporary resources under the client's control. In short words, the client gets a designated amount of hours with specific personnel.

Whereas managed services involve outsourcing functions to a specialized service provider. The provider assumes responsibility for managing and delivering those services or a particular function.

difference between staff augmentation and managed services

Staff Augmentation vs Managed Services Model - Broad Comparison

Both staff augmentation and managed services are two different models for obtaining external resources to support business operations. Below are broader aspects of managed services vs staff augmentation comparison. 

Staff Augmentation Managed Services
Objective To fill short-term staffing needs To provide long-term IT support
Stakeholder Client Service provider
Cost Lower initial cost Higher initial cost
Payment Base Time and material SLAs and results
Flexibility Can scale up or down quickly A strategic approach to services
Project Management Full control of the project The service provider is responsible
Customization Customized staffing solutions Tailored solutions based on client’s specific needs
Time Commitment Good for Short-term Ideal for Long-term

Understanding Staff Augmentation

In general, staff augmentation is the process of hiring additional personnel to supplement the existing workforce. Usually, this is on a temporary basis and these individuals work under the client's supervision and management.

Staff augmentation is on the rise and so are the spendings on the services. This market is expected to grow with a 3.53% CAGR and is expected to become an $81.87 billion industry.

Understanding Staff Augmentation

Definition of Staff Augmentation

Staff augmentation involves hiring external staff members who work alongside the existing team on a temporary or project basis. It is a versatile staffing strategy that enables organizations to fill skill gaps. You get to augment your workforce with external professionals or contractors. This way your organization can enhance its capacity and flexibility without a long-term commitment to hiring full-time employees.

Benefits of Staff Augmentation

The main objective is to supplement the existing workforce with specific skills and expertise, addressing skill gaps and increasing operational capacity. Staff augmentation offers several benefits that make it an attractive option for organizations, including:

Flexibility and Scalability

Staff augmentation provides the flexibility to scale the workforce up or down based on project requirements and timelines. Organizations can quickly onboard or release staff members as needed.

Access to Specialized Skills

By augmenting the existing team, organizations can tap into a larger talent pool. You can bring in professionals with specific skills and experience that may not be available within your internal team. This allows for the efficient execution of projects and tasks.


Staff augmentation can be more cost-effective than hiring full-time employees. Organizations can avoid the overhead costs associated with permanent staff, such as benefits, training, and equipment. They only pay for the services provided by the augmented staff members.

Faster Time to Market

With staff augmentation, organizations can expedite project timelines and meet deadlines more efficiently. The additional resources help distribute the workload and ensure timely project completion.

Knowledge Transfer

The external staff members bring their expertise and industry knowledge, which can benefit the existing team. Through knowledge sharing and skill development, they can contribute to the overall growth and capabilities of the organization.

Limitations of Staff Augmentation

While staff augmentation offers numerous advantages, there are also some limitations. It comes with certain challenges and considerations that you must keep in mind:

Limited Control over the Outsourced Team

As the organization retains control over project management, it is responsible for coordinating. For this, you have to align the efforts of the augmented staff members with internal teams. But since they aren’t your full-time employees, you will have limited control over this team. Therefore, effective project management practices are crucial to ensure successful outcomes.

Potential Communication Challenges

Working with external staff members may introduce communication challenges, especially when language barriers or cultural differences come into play. Clear communication channels and regular updates are essential to maintain alignment.

Time and Effort Required for Managing the Augmented Staff

Integrating external staff members seamlessly into existing teams can require effort. You may have to set rules and guidelines in terms of communication, collaboration, and team dynamics. Moreover, clear roles, responsibilities, and expectations need to be defined to ensure smooth collaboration.

Retention of Intellectual Property

With external staff members coming and going, organizations need to be mindful of protecting their intellectual property. Proper agreements and contracts should be in place to ensure confidentiality and ownership rights.

Best Use Cases for Staff Augmentation

Staff augmentation is particularly suitable for the following scenarios:

Temporary Skill Gaps: When organizations have short-term skill gaps, staff augmentation provides a quick and efficient solution. Hiring external professionals during a sudden surge in workload allows organizations to bridge the skill gap. Above all, the company or manager can ensure timely project completion.

 Project-Based Work: Staff augmentation is well suited for projects that have a defined scope and duration. Organizations can bring in external resources specifically for the duration of the project. This will ensure that the necessary skills are available without long-term commitments.

Seasonal Demand: In industries that experience seasonal fluctuations in demand, staff augmentation can be an effective strategy. Organizations can scale up their workforce during busy periods and scale down during slower times, optimizing resource utilization.

Pilot Projects: Staff augmentation can provide the necessary expertise when organizations are testing new initiatives. External professionals can contribute their specialized knowledge and support pilot projects. This provides the opportunity to explore innovative ideas without disrupting the existing team. 

Exploring Managed Services

Managed services involve outsourcing specific IT or business functions to a third-party service provider. According to Statista, the managed services market will be a 300 billion dollars global industry in 2027.

Exploring Managed Services

Now let’s explore the critical aspects of managed services.

Definition of Managed Services

Normally, managed services offer organizations the opportunity to delegate specific functions to external service providers. These providers bring specialized expertise, processes, and resources to handle the designated services. This involves engaging a service provider to handle specific functions, such as IT infrastructure management, network security, or application support.

As a result, managed services allow organizations to focus on their core competencies. The primary objective is to benefit from the expertise and specialized services provided by the external provider.

Advantages of Managed Services

Managed services offer the following benefits that make them an appealing option for organizations:

Comprehensive IT Support and Maintenance

Service providers typically have specialized knowledge and experience in managing specific technologies or functions. They bring their expertise to the table, providing a high level of proficiency and ensuring efficient service delivery. In a nutshell, you get comprehensive IT support and maintenance in the desired department.

Proactive Monitoring and Issue Resolution

Managed services often include proactive monitoring, issue detection, and 24/7 support. Service providers employ advanced tools and technologies to monitor systems and identify potential issues to ensure smooth operations.

Access to a Team of Experts

By leveraging external resources, organizations gain access to a broader range of skilled professionals. It becomes possible to recruit experts with specialized abilities and extensive experience that might be lacking within the internal workforce. As a result, projects and tasks can be executed efficiently.

Focus on Core Business

By outsourcing non-core functions to a managed services provider, organizations can focus on their internal resources. They can make efforts on strategic initiatives and core business activities. This allows for better resource allocation and increased efficiency.

Cost Savings and Predictable Expenses

Managed services can be cost-effective compared to maintaining an in-house team for certain functions. Organizations can avoid upfront investments in infrastructure, training, and hiring. Instead of paying for the perks, they only pay for the services provided by the service provider.

Drawbacks of Managed Services

Like staff augmentation, managed services also pose some challenges for a business. Below are the drawbacks that you need to consider before opting for managed services.

Higher Cost Compared to Staff Augmentation

While managed services are cost-effective compared to an in-house team, it’s expensive as compared to staff augmentation. You’ll have little control and may have to bear extra costs in terms of resource management.

Vendor Selection and SLAs
Choosing the right managed services provider can be hectic and often takes time. You need to thoroughly evaluate potential vendors, considering factors such as their expertise and track record. Then you have to focus on service level agreements (SLAs) and alignment with organizational goals.

Potential Lack of Customization

Managed service providers often don’t offer much customization in terms of services or talent disposal. You’ll only get what you’ve agreed to in the contract and nothing more. This can create issues when you’ll need someone to look the other way only to resolve a minor issue at work.

Dependency on the Service Provider

Another drawback of managed services is the dependency on your service provider. You’ll have experts at your disposal but the provider will have more control than you. Your organization will be dependent on the service provider in terms of workload, resource distribution, and accountability.

Integration with Existing Systems
Integrating managed services into existing systems and processes can be complex. It requires coordination and collaboration between the organization and the service provider to ensure a seamless integration that aligns with existing workflows.

Security and Data Privacy

Furthermore, when outsourcing critical functions, security, and data privacy become paramount. Organizations need to ensure that the managed services provider has robust security measures in place and adheres to industry best practices to protect sensitive data.

Best Use Cases for Managed Services

Managed services are particularly suitable for the following scenarios:

IT Infrastructure Management: Outsourcing the management of IT infrastructure allows organizations to leverage the expertise of service providers. You can outsource servers, networks, and storage-related tasks to people who specialize in maintaining and optimizing these systems.

Cloud Services: Managing cloud environments, such as infrastructure as a service (IaaS) or software as a service (SaaS), can be efficiently handled by a managed services provider. They can ensure scalability, security, and ongoing support for cloud-based solutions.

Network and Security Management: Organizations can benefit from outsourcing network monitoring, firewall management, and intrusion detection. You can outsource such security-related tasks to service providers who specialize in network and security management.

Application Management: Managing and supporting critical business applications can be efficiently handled by a dedicated managed services provider. The same goes for enterprise resource planning (ERP) systems and customer relationship management (CRM) platforms.

Help Desk and End-User Support: Outsourcing help desk services and end-user support allows organizations to provide timely assistance to employees or customers, ensuring smooth operations and user satisfaction.

Determining the Right Solution for Your Business

Now that you have a good grasp over staff augmentation vs managed services, it’s time to consider the right approach. Below are some factors that you must consider:

Assessing Your Business Needs and Goals

Assess the complexity and specialization required for the tasks or functions you need to outsource. Staff augmentation provides access to specific skills and expertise, while managed services offer a broader range of specialized services and comprehensive management.

Scale and Duration of Resource Needs

Evaluate whether you need temporary support to fill skill gaps or ongoing management of specific functions. Staff augmentation is more suitable for short-term needs, while managed services are ideal for long-term or recurring requirements.

Control and Management Preferences

Determine the level of control and management you want to retain over the outsourced functions. Staff augmentation allows for more direct control and coordination, while managed services transfer the responsibility of managing and delivering the tasks to the service provider.

Budget and Cost Considerations

Consider your budgetary constraints and cost projections. Staff augmentation may provide more cost flexibility, as you can hire resources on a project-by-project basis, whereas managed services typically involve ongoing service fees.

Long-Term and Short-Term Goals

Align your decision with your long-term business goals. If you require short-term support for specific projects, staff augmentation can provide the necessary resources. For long-term strategic initiatives or functions that are not core to your business, managed services can offer sustainable and scalable solutions.

Level of Integration with Existing Teams

Evaluate how seamlessly you can integrate external resources with your internal teams. Staff augmentation involves closer collaboration and integration, whereas managed services involve a more independent relationship with the service provider.

Risk Management and Compliance Requirements

Consider any risk management and compliance requirements specific to your industry or organization. Determine whether staff augmentation or managed services providers have the necessary security measures, certifications, and compliance frameworks in place to meet your needs.

Considerations for Choosing Staff Augmentation

When considering staff augmentation, organizations should carefully evaluate the following points:

Project-Based Requirements

You must consider how quickly your organization can ramp up the team size during peak periods. Similarly, how easily you’ll be able to scale down when the project workload decreases. Also, focus on the access to specialized skills and expertise that may be required for specific projects.

Your organization should have dedicated resources solely focused on their project. This can enhance productivity and efficiency as the augmented team members will be aligned with the project's objectives.

Short-Term Resource Needs

Staff augmentation offers cost advantages for short-term resource needs. So you should focus on quick resource onboarding while going for staff augmentation. It’ll allow your organization to access talent without the need for extensive training or onboarding time.

Also, consider the flexibility in terms of resource allocation while choosing staff augmentation. Your organizations should be able to bring in resources for specific timeframes or project phases. But always ensure that they have the right expertise when needed while avoiding the burden of long-term commitments.

Flexibility and Control over the Outsourced Team

With staff augmentation, organizations have the flexibility to choose specific team members. So should be able to select individuals based on skills, experience, cultural fit, and compatibility with the existing team.

Moreover, your organization should always have direct control and clear communication channels with the augmented team members. This will facilitate better collaboration and efficient coordination of tasks and deliverables.

Considerations for Choosing Managed Services

While choosing managed services, you should keep in mind the following considerations:

Long-Term IT Support Needs

When you get managed services for a long time, your organization may become heavily dependent on the provider's expertise and availability. And if the service provider faces challenges, it can impact your organization as well. Also, with managed services, you can lose direct control over the support processes and decision-making.

Proactive Monitoring and Maintenance

Managed services providers typically monitor specific aspects of IT infrastructure or applications based on predefined metrics and thresholds. There may be limitations on the depth and breadth of monitoring, and certain areas may not be covered comprehensively. This can result in undetected issues or gaps in proactive maintenance.

Despite proactive monitoring efforts, managed services are still primarily reactive in nature. The service provider may identify and address potential issues but they may not always have complete visibility or control. They often rely on predefined monitoring rules and generalized best practices. This is something that may not fully align with your organization's needs.

Access to a Team of Experts on an Ongoing Basis

Managed services providers serve multiple clients simultaneously, which means their resources may be shared among different organizations. This can result in limited availability and attention dedicated to any single organization. This simply means that your organization may not have exclusive access to a dedicated team of experts

Also, the expertise of the managed services team relies on the provider's investment in skill development. So the provider must prioritize ongoing learning and keep up with emerging technologies and industry trends. If they fail to do so, the team's knowledge may become outdated over time. This can limit their ability to provide cutting-edge solutions or keep pace with the organization's evolving IT needs.


All in all, the choice between staff augmentation and managed services ultimately depends on your specific needs. It is crucial to assess your organization's resources, expertise, and long-term objectives when making this decision.

Staff augmentation offers the flexibility and control of selecting and managing your own team members. Furthermore, it offers a higher level of customization and integration into existing processes. On the other hand, managed services provide comprehensive support and expertise. This service allows you to offload certain responsibilities and focus on core business functions. 

Staff Augmentation
The Top Qualities to Look for in a Staff Augmentation Partner
5 min read

Staff augmentation has emerged as a popular strategy for organizations seeking to augment their workforce with specialized skills and expertise without the long-term commitment and overhead costs associated with permanent hiring. Finding the right outsourcing partner is crucial to ensuring the success of your projects and achieving your business goals. In this article, we will explore the top qualities to look for when selecting a staff augmentation partner and delve deeper into each aspect to help you make an informed decision.

1. Extensive Talent Pool:

One of the key qualities to consider in a staff augmentation partner is the size and quality of their talent pool. A reputable partner should have access to a diverse pool of highly skilled professionals who possess the specific expertise you require. This pool should consist of professionals with a proven track record in their respective fields. When evaluating potential partners, inquire about the breadth and depth of their talent pool to ensure that they can quickly identify and deploy top talent that aligns with your project requirements. By leveraging their extensive talent pool, the partner can save you time and effort in the recruitment process, allowing you to focus on your core business activities.

2. Expertise and Specialization:

Look for a staff augmentation partner that specializes in your industry or the specific skill sets you need. It is essential to ensure that the partner has a deep understanding of your business domain, including its unique challenges and requirements. This industry-specific knowledge enables the partner to provide resources who possess not only the required technical skills but also the contextual understanding necessary to drive your projects forward effectively. A partner with domain expertise will be better equipped to provide the right resources who can seamlessly integrate into your existing team and contribute to your projects from day one.

3. Flexibility and Scalability:

Your staff augmentation partner should offer flexibility and scalability to adapt to your changing needs. As your projects evolve, you may require additional resources or need to adjust the team size. It is crucial to choose a partner who can provide resources on-demand, whether you require a single professional or an entire team. A flexible partner can quickly respond to your resource needs, ensuring that you have the right people in place when you need them. Furthermore, the partner should have the capacity to scale the team based on project requirements, allowing for optimal resource allocation and cost-effectiveness.

4. Robust Screening and Selection Process:

A reliable staff augmentation partner should have a rigorous screening and selection process in place. This process ensures that the partner thoroughly assesses the skills, qualifications, and experience of potential candidates to ensure they match your requirements. A partner with a robust selection process will go beyond evaluating resumes and conduct technical assessments, interviews, and reference checks to verify the competency and reliability of their talent pool. By partnering with a provider that maintains high standards in their selection process, you can have confidence in the quality of the resources they provide.

5. Effective Communication and Collaboration:

Strong communication and collaboration are essential for successful staff augmentation. Your partner should have clear and efficient communication channels in place to facilitate seamless interactions between your existing team and the augmented resources. Regular updates, progress reports, and proactive issue resolution should be part of their communication framework. A collaborative partner will ensure effective knowledge transfer and integration of the augmented resources into your team, minimizing any disruptions and promoting a cohesive work environment.

6. Commitment to Quality and Client Satisfaction:

A reputable staff augmentation partner should prioritize quality and client satisfaction. They should have a proven track record of delivering high-quality services and meeting client expectations. When considering potential partners, ask for testimonials, case studies, and client references that demonstrate their ability to deliver successful outcomes. This information will provide insights into their commitment to excellence and their track record of achieving client satisfaction. A partner that emphasizes quality will ensure that you receive top-notch talent and achieve your project goals

7. Proven Track Record:

Consider the experience and track record of a staff augmentation partner before making a decision. Look for partners who have successfully executed similar projects in the past and have a strong reputation in the industry. They should be able to provide success stories and examples of their contributions to clients' achievements. A partner with a solid track record demonstrates their ability to navigate complex projects, adapt to evolving requirements, and deliver results. Such experience and expertise instill confidence in their capability to meet your expectations and drive project success.


Finding the right staff augmentation partner is a critical decision that can significantly impact the success of your projects and the overall growth of your organization. By prioritizing qualities such as an extensive talent pool, expertise, flexibility, robust screening process, effective communication, commitment to quality, and a proven track record, you can ensure that you choose a partner who meets your specific needs and adds value to your business. Remember, selecting the right staff augmentation partner is an investment that can fuel your success in the ever-evolving business landscape. By partnering with a reputable provider such as Shopdev you can access the right talent, enhance your project outcomes, and gain a competitive edge in your industry.

Get free Consultation!

Book your free 40-minute
consultation with us.

Do you have a product idea that needs validation?
Let's have a call and discuss your product.