What is staff augmentation?

Staff augmentation allows you to hire specialized experts on demand to complete short- and long-term projects.

How to start?

All you have to do is analyze your internal project requirements, available resources and skills gaps. You can then find a credible custom software development company and augment your team with the skills needed for the duration of the project.

Think about this:

An American mobile development company lacks quality control experience. To fill this gap, they can partner with a credible nearshore staff augmentation partner and hire a quality assurance expert or an entire team from nearby countries like Mexico .

This strategy helps your company fill gaps in qualified personnel, while avoiding long-term hiring commitments.

And what else?
It also provides your company with the flexibility to quickly adapt to market changes and project outsourcing needs.

Next, let's analyze what managed services consist of:

What are managed services?

In managed services, your company outsources entire projects or functions in areas such as cybersecurity, data migration, or software development to a managed service provider (MSP).

Unlike staff augmentation, where external staff work closely with internal resources, PSMs operate independently.

Is that how it works:

The managed services provider gives you a proposal with a cost estimate and a schedule for the project. Once you approve it, they take care of the entire project from start to finish. They keep you informed with regular reports.

For example, a retail company looking to strengthen its cybersecurity could opt for a managed IT service specializing in digital security. The managed IT services provider would assess the business's needs, create and implement a tailored security strategy, and offer ongoing support and maintenance.

Why do companies choose this strategy?
This model is especially cost-effective for long-term projects, as it reduces overhead, simplifies hiring and other HR processes, and streamlines resource management.

Advantages and disadvantages of increasing staff

Discover the five advantages of staff augmentation, which is transforming the business landscape, and some drawbacks to consider.

5 advantages of increasing staff

• Cost-effective, especially for short-term projects: Provides cost savings for short-term projects by allowing you to hire qualified talent only for the required duration of the project. This way, you can avoid long-term employment costs and reduce overhead costs like salary benefits and office space.

• Better team and project control: Provides your internal team with direct control over the augmented team. In fact, custom software development service partners allow you to maintain control of daily operations, ensuring that outsourced work fits your specific project requirements and business objectives.

• Greater flexibility and scalability: Allows you to quickly adjust your workforce size and skill set in response to changing project demands and market conditions. For example, you can hire additional software developers to increase your team's capacity during a product launch and reduce it after the project is complete.

• Faster onboarding and reduced training time: Staff augmentation brings qualified professionals with specialized knowledge, such as quality control experts, who can quickly integrate into your current team. This approach significantly reduces the learning curve, cutting the time and resources typically needed to train new full-time employees.

• Accelerated productivity: The increase in personnel provides qualified technical talent in Agile and Lean methodologies, introducing best practices that allow rapid adaptation to project changes. Some providers offer specialized software development services, such as Agile-focused project managers, that further streamline processes and optimize the use of resources.

2 Cons of increasing staff

• Requires well-defined internal processes: You need clear guidelines and efficient internal communication protocols to be able to effectively integrate augmented staff into your existing workflows. Without them, increased staff may struggle to conform to company standards, risking inefficiency and delays.

• May have hidden costs: Hidden costs may arise due to unforeseen administrative expenses, legal costs, and training of external professionals in specialized tools or company-specific practices. Communication gaps in offshore models can also lead to higher costs and project delays.

Below we will explore the managed services model in detail:

Advantages and disadvantages of managed services

From cost-effectiveness to post-implementation support, these are the benefits of leveraging managed services. Also know the drawbacks of this model.

3 advantages of managed services

• Profitability (long-term projects only): Offers a fixed and predictable pricing model, allowing for better financial planning and resource allocation throughout the duration of the project. It also reduces the need for frequent technology investments, as the service provider usually ensures that its team has access to the latest tools.

• Reduced administrative burden: Eases your administrative workload as the outsourcing company oversees staffing, payroll management, customer support, etc. This frees up your internal team to focus on critical business issues and objectives.

• Long-term support and maintenance: Ensures continuous monitoring and updates after implementation. For example, if you outsource a CRM system to a managed services provider, they will be responsible for ongoing software updates and bug fixes to keep your product relevant and competitive.

5 disadvantages of managed services

• Less control over outsourced processes: Since decision-making and operational processes are primarily managed by third-party providers, it can limit a company's direct influence on project execution compared to staff augmentation. This can cause project mismatches and deviations from business objectives.

• May be more expensive than staff augmentation for short- or medium-term projects: The managed services model offers a full range of services that may be more expensive than staff augmentation for a medium- or short-term project. The cost includes not only labor, but also the management, infrastructure and technology provided by the service provider, which can be broader and, therefore, more expensive than increasing staff.

• Possibility of misaligned objectives: Since the service provider has full control of operations, there can sometimes be a mismatch between their methods and your expectations. Therefore, they may offer a one-size-fits-all solution that may not fully fit your specific needs or strategic direction.

• Increases your dependence on external vendors for critical processes (such as data security): Relying on external vendors for critical functions such as a help desk or data security can limit your internal team's ability to manage business challenges. independently and proactively. Additionally, if the partnership ends, you may find it difficult to switch service providers or meet project deadlines.

• Possible intellectual property issues: You need to share sensitive company information with your managed services provider. As a result, this could lead to risks of intellectual property theft or unauthorized use, especially if there are no clear contracts or data processing protocols in place.

Still don't know which outsourcing model to opt for?
Don't worry. Here are eight tips to help you make the right decision.

How to choose the best outsourcing model for your company: 8 factors to evaluate

The right outsourcing model depends on your business goals, budget, specific project needs, etc.

We tell you the eight aspects that you should evaluate and when to choose which model.

1. Business objectives

To maximize the return on your investment, your choice of outsourcing model should fit your business goals and objectives.

Opt for staff augmentation if your goals are to temporarily expand the capabilities of your internal team or fill specific skills gaps, while maintaining greater control of the project.

But if your goals are operational efficiency and long-term stability, then managed services would be the all-in-one solution you need, especially for long-term projects where direct supervision is not a priority.

2. Qualification requirements

Next, you must accurately assess the qualification requirements of your project, as this will determine the level of experience required for its success.

If your project requires a specific qualification that you lack internally, staff augmentation is the perfect solution.

On the other hand, if you are looking for a service provider to handle the entire project, managed services might be a better option.

3. Budget

It is important that you evaluate your budget to ensure that the chosen approach fits your financial resources and cost expectations.

Staff augmentation is especially cost-effective for a short-term project due to the flexibility inherent in the model and reduced recruiting and overhead costs.

Managed services , while more expensive initially, can be more cost-effective for complex, long-term projects.

5. Compliance needs

You must ensure that your outsourcing model meets industry standards and legal requirements relevant to your company's operations.

You can directly monitor compliance in the team augmentation model .

On the other hand, if your project requires strict compliance with regulatory standards, managed services can offer more comprehensive compliance solutions.

6. Need for internal knowledge transfer

This will help you determine whether the outsourcing model will facilitate the smooth sharing and retention of critical knowledge within your organization.

To retain project competencies and knowledge within your organization, staff augmentation is an optimal approach.

Because?

This method allows you to seamlessly integrate external professionals into your current team, facilitating direct knowledge transfer and skill sharing.

Managed service providers often perform tasks independently, which can limit knowledge sharing with your current team.

7. Cultural and team integration

Assessing this will ensure that outsourced staff can collaborate effectively and align with your company's values ​​and working style.

Opt for staff augmentation if you want a more seamless integration of external resources into company culture and workflows, encouraging collaboration.

But if you need little to no cultural integration, managed services would be fine too.

8. Flexibility of commitment

It is worth checking the flexibility of the contract, as it is something that can dynamically adapt to changing project requirements and organizational changes.

Staff growth provides the flexibility to expand or reduce your external resources in response to evolving projects and market needs.

Opt for managed services if you're looking for a consistent, stable commitment with fewer scope changes