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Transitioning from Managed Services to Staff Augmentation

Arpatech Sep 16, 2019
manged-vs-staff-blog

Managed Services—A Review

It refers to a model for IT support in which a company outsources strategic IT functions to a Managed Services Provider (MSP), who is tasked with managing the resources, tools, and procedures used to perform both projects and continuing operations. In a managed service model, the managed service provider is responsible for the functionality of the IT service and paraphernalia, with the customer generally paying a monthly fee for delivery of the service. An effective managed services model allows a customer to benefit from expectable pricing and the capacity to concentrate on key business fears instead of IT-related tasks.

A managed services provider offers distant monitoring and organization that is often a rudimentary, foundational service. With the arrival of cloud computing, managed IT services have also grown to include cloud services. For example, service providers are likely to focus on infrastructure as a service, providing managed public cloud services together with cloud providers such as Amazon Web Services (AWS), Google and Microsoft.

Like any pricing model, one needs to look for the following risks related to this model, ensuring that they are dealt with adequately. The key risks include:

a) Capacity to define and monitor service levels – Since the model hugely depends on service levels, companies must have the ability to produce and monitor these service levels. Incapacity of an organization to screen service level may lead to a vendor overpricing due to lack of transparency.

b) Single vendor reliance – Once a vendor is entrenched in the organization, they may be unwilling to increase the scope.

Why Make the Switch?

While both models are feasible options for increasing IT support, staff augmentation provides cutting-edge improvement and a growing drive to cut costs and enhance operational efficiencies through technological innovation. This typically converts into an increasing number of IT projects, where a business’s success or failure can often depend on the capacity to complete these projects on time, within budget, and to specification. Developing in-house competences to carry out these projects can be an expensive and dicey undertaking, especially when the IT needs of an organization are continually changing. Furthermore, in today’s business world where lagging behind the IT innovation curve can be catastrophic, only a handful companies have static IT needs.

When Is It Time to Switch?

Given the array of advantages that growing businesses can gain from switching to staff augmentation, the question arises about the perfect time they should make the switch.

When Does an Organization Need Staff Augmentation?

Staff augmentation is a novel concept for large- and medium-sized organizations because in it an organization prefers not to hire a full-time employee. Reasons may include, among other things, cost limitations, the immediate requirement of staff, or the length of the project that barely justifies hiring a full-time employee.

Cost

Business is about making money, which can be done by obtaining better income, or by reducing overhead expenses. Staff augmentation can easily perform both the jobs. A lot of money and time are spent finding the right employee when a company needs additional help. If that employee is only needed temporarily, or quits, that process must start from scratch. Keeping in-house employees trained and up-to-date on the latest technology can also add up swiftly. Full-time employees can be very expensive, not to mention the risks and obligations related to full-time counterparts. Staff augmentation offers companies the opportunity to pick and choose the specific skills and services needed for their company. If one consultant lacks the skills you need, then you can easily find another that does. You pay for the demanded skill without having to pay for the overhead of hiring or training. Overhead is further reduced as you only pay for the mandatory skills when you need them. Staff augmentation should be seriously considered if a company finds that employees are striving to achieve the work it needs. Hiring the exact skill needed can confirm that a company’s project can reach its milestones. Staff augmentation, while providing a blueprint to accelerate projects, enables employees to zero in on other serious assignments in a bid to grow and earn higher revenue.

Ability to Start Projects Sooner

Executives often if a certain individual is the right resource for the job, whether s/he can do the job, or if they can be trained to do the job. However, the point whether the person in question can learn to do the job holds little significance; what’s important is how long an organization can wait. Staff augmentation allows a company to get the resources it needs immediately. This is significant if a company is not able to maintain an adequate workforce to achieve regular workloads, or a large project needs to be initiated. The capacity to start projects sooner may be just the advantage a company needs to win the speed to market race.

Length of Project

More often than not, a company does not need a long-term employee. For instance, many IT tasks, such as upgrading services, are barely needed on a permanent basis. Another case is organizations outsourcing help to ensure they meet guidelines and other regulatory compliance efforts. While such tasks are significant, they may not be needed on a permanent basis.

Flexible Workforce

Companies may need extra resources for a large forthcoming project and for this they immediate help. Huge resources can be spent finding and hiring an employee with the right skills, which this can take weeks, if not months, resulting in delays or missing out on business deals. According to a report, best practice companies in both the US and Europe evaluate they are overspending by 10% and underperforming by 10% due to their inability to have a fully nimble and flexible workforce. Companies must not miss out on that latent profit by not having the resources they need, when they need them. Using an Augmented Staff lets companies rapidly up or downscale their workforce based on the needs of the project.

Conclusion

Given the rise in cost pressure in today’s fickle marketplace, more companies are turning to staff augmentation to control expenses, improve performance, and regain focus on their core capabilities. Nevertheless, the switch from managed services to staff augmentation can only be fruitful if careful attention is given to finding the right partner. While previously managed services would dominate staff augmentation for one reason or another, in today’s ever-changing modern business world, staff augmentation is the new name of the game.

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