Managed IT Services vs. IT Outsourcing vs. Staff Augmentation

By Jake Peterson April 15, 2021
IT Services

One of the oldest business acumens says “you have to spend money to make money.” To help people see and recognize your business, you have to spend money on advertising. To provide better customer service, you may have to upgrade your help desk options.

Not all of the “spend money to make money” ways are client-facing, however. Sometimes, internal upgrades can help you become more efficient and agile.

All businesses, no matter how large or small, need IT help. Whether that’s something as simple as setting up email hosting options or something a bit more complicated as cybersecurity measures, your business needs IT services.

For businesses that don’t have an in-person IT team, there are three options readily available:

Today, we’re going to examine the difference between these three services and how they can help your business.

Why Choose Any of Them?

managed it vs outsourcing vs staff augmentation

The COVID pandemic was a time for a lot of people to try their hand at DIY projects. Whether that was a haircut, an oil change, or repainting the living room, more and more people decided to test their hand at their own projects. After all, there’s a tutorial for just about everything on YouTube these days, so why not?

This phenomenon also extended to businesses. With tighter budgets and more time, many businesses tried their own hand at IT tasks.

But as with all DIY projects, there comes a certain risk. What happens if a small mistake or error becomes a bigger problem? In the IT world, there are some frightening realities.

Data breaches can cost companies millions of dollars. Large companies like British Airways, Ticketmaster, and Marriott have suffered crippling cyberattacks in the past. Malware and ransomware attacks have increased by over 100% in the past year. Improper network configuration could lead to unexpected downtime, which could cost your business around $5,000 per minute.

So then, it becomes a question of “should you” rather than “could you”.

Managed services, outsourcing, and staff augmentation all serve the same purpose: to make sure your internal IT operations run smoothly. Every business should be thinking about how to acquire more leads instead of taking a whole week to worry about web hosting.

Managed IT Services

Just what is managed IT services? It’s a fairly common term in the IT world, but it’s not always understood.

Managed IT services are when a company brings in a third party to handle all of its IT needs. Since many businesses, especially small businesses, don’t keep a full-time, in-house IT team, they turn to managed services. Also written as MSP (managed service provider), these experts perform a variety of tasks. This can include services like:

Managed services are long-term options for businesses and hiring an MSP usually means choosing a partner for your IT needs.

When finding an MSP, businesses typically sign a contract for a monthly fee. With this monthly fee, you’re not just getting one IT professional, but a whole team of qualified experts to help with whatever problem you may have.

While one IT professional may be familiar with the above list, they are not experts in everything. That’s why an MSP can provide you experts in each individual service, ready to help with whatever task comes up.

If you’re looking to the future and thinking about expanding, you should be able to easily grow your MSP contract alongside your business.

Pros of Managed IT Services

Predictable Payments

Companies that partner with an MSP typically have predictable and cost-effective monthly payments while others operate on a retainer price. These payments can be a fixed amount and you’ll know you’re covered for whatever you need. It’s an easy “set it and forget about it” for many business owners.

Expert Team

With an MSP, you’re going to have access to a wide range of IT experts. You won’t have to search for an IT specialist, such as a network engineer, should the need arise. With your MSP, you’ll have everything in one package.

Increased Productivity

A partnership with an MSP means you don’t have to worry about your in-house tech needs. Even if you have IT staff on hand, they don’t have to worry about basic tasks and you won’t have to waste time looking for someone to fill a role.

Flexibility

Since you sign a monthly contract with an MSP, they are available for your monthly needs no matter how big or small they may be. That means you can scale down or up depending on your business’ needs.

Cons of Managed IT Services

Remote Workers

It’s not the biggest con, but the majority of MSPs work off-site. Monitoring, troubleshooting, and more are taken care of remotely. If you’re a business looking for more personal work, then an MSP may not be the best option for you.

Some Work Maybe Outside of Scope

Even though an MSP has a whole host of experts at its disposal, there might be an instance where particular hardware, software, or service isn’t covered in their service agreement. Make sure you evaluate what you need before signing an agreement.

IT Outsourcing

Now, you might be thinking that managed services sounds like outsourcing with extra steps. While they share many similarities, they’re more like cousins instead of identical twins.

Yes, they both involve hiring an external service for certain needs, but then quickly begin to differ with their offerings.

While managed services is broad and general in scope, outsourcing is very specific. A business is going to outsource a specific project or task to a third party and nothing more. That could mean outsourcing your IT help desk, cloud setup, or email migration to a third party. It could also be a more ongoing project, such as server management.

But this outsourced service will only work in their scope of work. Your IT help desk won’t advise you on your firewall security. Your email hosting experts won’t chime in on migrating to the cloud. For that, you’d need to bring in someone else.

Pros of IT Outsourcing

Cuts Down on Hiring Costs

If you need a crucial but short-term project complete, then outsourcing is your best option. You don’t have to hire a full-time employee and can easily cut down on labor costs.

Large Talent Pool

With outsourcing, you can often choose from a global pool. With a specific project, you’re free to hire someone who may be far away since it’s just for the short-term.

Cons of IT Outsourcing

Less Control

Since you’re hiring a contractor instead of an employee, you have less control over their specific work, timetable, and more. Outsourced IT specialists usually work remotely, so there may be less control than originally thought.

Lower Standards

The IT professional may not have the same standards you have for your business. Their timetable, level of communication, deliverables, and more may lack what you envisioned.

Staff Augmentation

staff augmentation

If managed services and outsourcing are cousins, staff augmentation is the family friend that’s considered family at this point.

Staff augmentation can vary in scope. It can either be for a short-term project or something lasting months or even years. What sets staff augmentation apart is how much control the business has over the third party.

Staff augmentation is when a business will contract a third-party service to provide temporary staff for a period of time. These contractors can either work remotely, on-site or a hybrid depending on the company’s needs. Their work and hours can increase or decrease depending on the company. When the project work is finished, so is their time at the company.

In short, they’re temporary staff that never become employees. While they may be at your business every day, have a lanyard with an ID,  and even a company email address, they are never full-time employees.

Their work can be anything that the company needs, similar to both outsourcing and managed IT services.

Pros of Staff Augmentation

Clear Objectives

Similar to outsourcing, the augmented staff is coming to your business to perform a specific task. They know their role and you know what they’re doing. This will help deter any negative feelings by current staff who feel their job security may be at risk.

Better Communication and More Control

Augmented staff is likely to be on-site, meaning you’ll have more control over their tasks and responsibilities. Communication is easier since they’ll be down the hall instead of in another state.

Cons of Staff Augmentation

Onboarding and Training

Onboarding isn’t necessarily a con, but it does mean that managers and other staff members will have to make time to accommodate the augmented staff. It may take a while for them to get up to speed and ready.

Not Fit for the Long-Term

“Long-term” can vary greatly depending on the scope, project, and size of your business. But if you find that the augmented staff is at your business longer than anticipated, you might be missing out on financial savings.

Which Option Should You Choose?

managed services infographic

When to Choose Managed IT Services

When should you start looking for an MSP? You should choose managed IT services if…

  • You’re looking for a long-term IT partner
  • You need continuing IT  consulting or support
  • You don’t want to hire a full-time, in-house IT staff
  • You want predictable monthly costs
  • You need to supplement your internal IT staff
  • You don’t want to constantly oversee your IT functions

When to Choose IT Outsourcing

When should you opt for IT outsourcing? You should choose IT outsourcing if…

  • You want to reduce labor and IT costs
  • You need an IT professional for a short-term project
  • You want to focus on your core business instead of IT tasks
  • You want to increase business competitiveness
  • You want to choose from a larger talent pool
  • You want to gain access to new market areas

When to Choose Staff Augmentation

What about staff augmentation? You should choose staff augmentation if…

  • You want more control over a project
  • You want someone in-house
  • You want to reduce operational costs
  • You need someone for a specific project, but don’t need to hire an employee

Conclusion

Your ultimate choice will depend on what your business objectives are. Make sure you think about your goals and what you want to accomplish from finding an IT partner. No matter what your business goals are, we can offer you a solution. With nearly 30 years of experience in the IT industry, we can find the perfect solution for you. We can serve as your MSP, outsourced partner, or staff augmentation solution.

If you’re interested or want to know more, reach out today for your project quote!

 

 

 

 

 

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