Stratistics Marketing Research Consulting released the figures for spending in the worldwide IT outsourcing market. Expectations are that the amount will reach $481.37 billion by the year 2022. 

The figure is not at all surprising- this is because companies are looking forward to reduce their IT component spending. The focus is shifting to the main functions of the organization.

To solve the various enterprise challenges, the two models of IT outsourcing- staff augmentation and managed IT services are considered the best. 

We take a closer look into both these models to determine which one is better suited to the needs of companies.

Staff Augmentation

Staff augmentation refers to hiring professionals from outside the company. This is done on a contractual basis to cover up for the in-house staff.

Staff augmentation model has several benefits-

• Cost-Effectiveness

There are a lot of companies without the need for added staff. This eliminates the point to pay regular wages. Staff augmentation provides businesses with complete support through skilled professionals.

• Adaptability

Whenever a project comes up to a company, it is easy to understand and make a note of the missing skills to complete the project. Staff augmentation comes with the feature of adaptability. As a result, you can quickly scale up and down as per the project range.

• Resistance to Attrition

Obtaining and keeping a permanent staff is a difficult task for companies today. Because IT services are growing in demand, employees move over from their present employer to another more quickly.

There is not much companies can do to avoid this, but staff augmentation makes it less difficult to fill their staff with qualified specialists.

These are the important attributes of staff augmentation. However, it is interesting to note that staff augmentation is perfect only as a short-term solution. Future-oriented companies want to keep their technological development safe for a long time.

With the benefits on offer through staff augmentation, many people in the top management look to make this model a permanent one in their operations.

A Few Limitations of Staff Augmentation 

Choosing staff augmentation from a permanent hiring model brings two critical disadvantages to light-

• Overall Cost- Effectiveness Gets Challenged

When you choose staff augmentation, the labour costs increase. These expenses include overheads and positive margins too. Regularly hiring freelancers on a contractual basis is not a permanent solution, as the administrative costs become higher also.

• You Don’t Get Enough Insights For The Work Done By Your Contractor

Staff augmentation model does not generally mention any other service commitments than the work hours. As a result, the permanent staff often ‘invents’ new tasks to keep temporary hires busy. 

Staff augmentation brings you high-cost permanent resources. Yes, the quality of their services will be outstanding, but every company will also need favourable results too.

With staff augmentation, the customer company is entirely responsible for the infrastructure management procedure as well as quality assurance. The result, therefore, also becomes the responsibility of the company.

Managed IT Services

The managed IT service model is a definite mix of services, responsible for applying an external degree of control on a company’s non-core systems.

The model brings in all benefits of flexibility and skill access of staff augmentation. It then overcomes the major disadvantages the former model has to offer.

The advantages of managed IT services are the following-

• An Improved Cost Model

The vendors of managed IT services tie the pricing of the contract to the outcome. In other words, if customer demand for certain services grows or decreases, the price of the contract will differ accordingly.

• Guaranteed Output

Because service delivery includes a service level agreement (SLA), the overall scope and time limit of the service are all documented. Service providers try to fulfil their commitments, so they are required to put their value of work at a maximum.

• Access To Many Different Skills

Organizations providing managed IT services are often more significant than staff augmentation companies. 

As a result, these companies offer their customers an extensive base of skills, knowledge and solutions necessary to meet the ever-evolving requirements of customers.

Managed IT service model keeps your focus on the core business and transfer all the supporting services to a skilled and result-oriented company.

Adopting Managed IT Services

Stepping to a managed service model is not a single step, but involves a gradual procedure of four phases-

• Planning

Firstly, it is essential to have a clear definition of what to outsource.

It is vital that you do not delegate the processes, knowledge-intensive and makes you stand apart from the crowd. If you choose the wrong service for outsourcing, it can result in vendor lock-in.

Also, have a clear decision regarding the scope of managed IT services. If it is a hosting service, for instance, you should have a clear idea when the hosting begins and ends. It looks pretty ordinary but can have problems in the future.

• Choosing a Vendor

The reliability of a managed IT service vendor is a huge factor in making companies doubtful of selecting this model.

Shortlist managed IT service providers based on criteria like recommendations from experts, the capabilities of vendors for a particular technology and testimonies from previous customers.

The rest of the process is simple. Interact through one-on-one sessions to get more information and proceed ahead.

• Transition

A transition plan is generally in an SLA, where the methodology and schedule of a project are specified. Over-specification on the way the service will be delivered is a common problem to avoid in this phase.

Transition is the phase where the actual transfer of knowledge happens. At the start, a new vendor observes how the internal staff works. Right after that, this vendor takes over the overall responsibilities of service management.

• Governance

For maintaining the consistency of managed IT services, it is vital for a customer to conduct regular reporting and performance audits, review the services in line with the SLA and ensure that the vendor stays alert to what the IT service market offers.

The Dilemma Among Staff Augmentation and Managed IT Services

Choosing between these two models depends on the kind of company looking for them. Essentially, the best way to choose is to have a detailed cost-benefit analysis.

If your company requires specific services for a limited period, staff augmentation is the perfect option for you.

However, if you are looking for a continuous operating model, having a predictable cost structure, you will want to consider managed IT services for your company.

You can connect any time in case of any doubts about the two models we have discussed above. Also, we offer staff augmentation services and co-working space, Reach out to us, if any of the above service interests you.

The GoodWorkLabs team recently caught up with Samara Mahindra, the Founder of the Carer Program – a one of a kind Cancer recovery program, to understand the technology requirement of her business.

Samara wanted to build a web application that would provide holistic therapy for cancer patients post their treatment. The challenge here was to build an easy-to-use and brilliant UI/UX for an age group ranging from 7 years to up to 70 years.

Our Process:

The design team at GoodWorkLabs immediately dived deep into understanding the core of the Carer program business. The idea was to establish an instant connect with the patients who would use this program, and so, we looked at minute details such as color codes, fonts, background textures etc that would help in creating a soothing experience for the users.

We then worked on providing excellent user interactions that would allow patients to easily navigate through the Carer Program modules.

Once we got the aesthetics in place, we began the next process which was the development stage.

As a company, we believe in providing a complete end-to-end solution for our customers, and using agile software development methodologies we created an interactive web application for the Carer Program.

Our journey with the Carer Program:

GoodWorkLabs has always been in the forefront in creating cutting-edge technologies. At the same time, we are also passionate about creating products that touch the lives of millions of users.

Our team was super excited about working with Carer Program and in the healthcare space. As we all know, cancer is a serious medical condition. But building a technology solution that would help speed up the process of cancer recovery was a cause that we were very happy and proud to be part of.

In the video above, Samara also shares a few words about her experience of working with GoodWorkLabs.

“There were many things that stood out with GoodWorkLabs, I think one is the efficiency and just trust! I have worked with many other technology companies, but this is the one company that I can really trust. If there is any glitch in the program or if there is any kind of technical difficulty, or if I want any advise when it comes to do anything with technology, I know I have a team that is there by me who are super efficient and shall get the job done”

 

Why choose GoodWorkLabs:

We don’t just build products. We help in creating an ecosystem for businesses to thrive with the latest technologies.

Also, we go that extra mile to understand your business persona and build products that are aligned to your objectives.

So, if you have a technology requirement and are looking for an exceptional UI/UX design and software development firm, then GoodWorkLabs is the right technology partner for you.

GoodWorkLabs adds Samsung, the largest electronics and mobile company, to its envious list of clients and partners! We are excited to work alongside the giant to bring out kickass solutions and products. Welcome Samsung!