In recent years, many information technology (IT) departments have sought to increase their agility, overcome short-term capability deficiencies, and/or accommodate the impact of hiring restrictions by utilizing staff augmentation arrangements with IT service providers or by contracting directly with independent contractors. As a temporary strategy, this approach has a number of advantages compared to the alternative of directly hiring staff.
Under a staff augmentation model, the cost of hiring for temporary requirements and disengaging once those requirements have been met can more than offset the higher cost of engaging more permanent resources. Moreover, staff augmentation requires minimal contracting effort, has a simple cost model (rate times hours worked), can scale up or down quickly and has minimal impact on the existing operating model of an IT organization.
The essential difference between the two models is that under a managed services model (outsourcing), the provider is committed to delivering an “outcome” at a defined price versus an “input” as under the staff augmentation model. An input is simply the performance of an activity with no commitment that the activity will result in the desired outcome. The managed service model drives a measure of value based on planning, as the organization must define the requirement on a service and performance criteria basis.
For more details on the differences between Managed Services and Staff Augmentation, download this free whitepaper from CGI: Why Managed Services and Why Not Staff Augmentation?
ONEFIVE can help you understand which model appropriate for your business. Get in touch with a member of our team to receive a free assessment.