September 20, 2021

IT Managed Services or IT Staff Augmentation?

How to decide what is right for your organization

By George Louris, Vice President of Technology, Marcum Technology

IT Managed Services or IT Staff Augmentation? Managed IT Services

The decision to outsource IT functions is rarely an easy one. There are a number of factors to consider including cost, complexity, cultural impact, and employee morale. Additionally, what you outsource is just as important as how you outsource your IT functions.

Because each organization has unique needs, it is important to understand what form of IT outsourcing works best for your organization. Although both IT managed services and IT staff augmentation models can save time and money associated with recruiting and hiring technical staff, there are many other things to consider.

What is the difference between managed services and IT staff augmentation?

There is one primary difference between the two outsourcing models. Under a managed services model, the managed services provider (MSP) is committed to delivering a result (i.e., network monitoring and patching, help desk support, data protection) at a predefined price. In an IT staff augmentation model, the service provides a qualified resource for a certain number of hours but is managed by the organization.

When to use an IT staff augmentation outsourcing model

IT staff augmentation is an outsourcing strategy that is used to supplement existing IT staff to meet the needs of a short-term IT project or a strategic IT initiative or as a solution to staffing shortages. This approach is often a result of evaluating the existing staff’s bandwidth and skill set and then determining which additional skills are required.

People often associate outsourcing and IT staff augmentation services with offshore, overseas remote staffing. It is also often associated with completely outsourcing an IT function, such as a service desk or call center operation. However, those are shortsighted definitions. Many IT staff augmentation solutions are populated with local experts located either onsite at the organization’s location or within the United States, working remotely.

You should consider using an IT staff augmentation model if you:

  • Have the bandwidth and knowledge necessary to manage the day-to-day responsibilities of the outsourced staff.
  • Require a short-term solution rather than long-term staffing.
  • Need access to skills and capabilities that you currently do not have on staff.
  • Require immediate help while looking for a longer-term solution.
  • Need to address staff shortages due to unforeseen events.
  • Require the ability to quickly scale to demand.
  • Would like to avoid the costs of hiring/onboarding new employees.
  • Do not require specific service-level agreements (SLA) to be achieved.
  • Are ok with accepting a higher cost for the benefits of such a solution.

When to use an IT managed services outsourcing model

Partnering with an MSP helps shift an organization’s emphasis from IT operations, maintenance, and problem-solving to thinking about how IT can be utilized most profitably or in the business’s best interest. A good MSP can help ensure that your mission-critical IT services are stable, protected, and supported on a 24/7/365 basis. A strong MSP will be highly efficient in delivering IT services in a way that keeps costs low and time to deploy short, while providing high-quality services to the business. In short, the IT managed services model takes responsibility for daily monitoring, maintenance, and management of IT operations away from the internal IT team and hands it to the managed services provider.

You should consider using an IT managed services model if you:

  • Need to achieve costs that are more predictable.
  • Require around-the-clock monitoring and support of your IT infrastructure.
  • Desire specific, committed, recurring services at a flat rate.
  • Need access to a wide range of technical skills and resources at a fraction of the price.
  • Are looking to completely offload the day-to-day management and responsibility of IT operations and support to focus on more strategic initiatives.
  • Need access to a wide array of skills and services, often at a reduced rate.
  • Need to hold an outside provider responsible for specific, predefined service levels and a desired outcome.

Although both models have their place in an IT department’s arsenal, it is important to understand an organization’s short-term and long-term goals before making a decision. Whether you have a short-term need to complete a project or temporarily backfill resources, or if you’re planning to offload IT operations full time to help reduce costs and improve accountability, each model requires the governance and oversight of the organization to ensure there is constant alignment, clear expectations and course-correcting along the way.

While there is certainly a place for IT staff augmentation in many organizations, if it becomes the de facto operating model for an organization in the long run there is a real danger of higher costs and higher risks compared to an outsourced managed services model. The latter allows the organization to focus on executing previously agreed upon service levels instead of the day-to-day management of onsite resources. In fact, working with an MSP sometimes means blending both solutions for the perfect approach to a specific organization’s needs. This is where the real value of aligning with the proper MSP comes to fruition. While on the surface an MSP may seem just operational, the right MSP — with deep industry expertise, a portfolio of digital transformation experience, and a strong pedigree of thought leadership — will not only eliminate your IT worries but will enable your organization to achieve your goals and fully realize the value of your vision.

If you’re not sure which outsourcing model is for you, just Ask Marcum.