In light of the high costs associated with in-house tech units, more and more companies are looking for alternative ways to hire teams of software developers. One such solution is managed IT services – an approach that helps companies access and integrate managed IT teams into their operations remotely. In this post, we’ll walk you through the benefits and downsides of managed IT services, aiming to help you gain a more profound understanding of this model. Let’s begin!

How do IT managed services companies work?

Software development process: Typically, organizations hire providers of managed IT services to delegate the entire software development project. In this model, there are three entities involved in the process: the client, the managed IT team, and the managed IT services company. Here are their roles in the process:

  • The client. The role of the client is to provide their project specifications, including deliverables, milestones, timeframes, and success metrics they want their managed IT team to meet. 
  • The managed IT team. It’s an external part of your organization that you can hire through a vendor to handle software development. 
  • The managed IT services company. The vendor sets up a team and manages the process of software development. They apply their internal practices to complete the project as they see fit. At the end of the cooperation, the client gets access to the outcome of the managed IT team’s work, for example, a code base, IT  infrastructure, etc.

Communication with the team: When it comes to interaction with the remote squad, the managed IT services company typically provides a project manager to handle communication with the client. A project manager reports to the client on the progress on behalf of the managed IT team.  

Team creation: One of the major concerns of the clients choosing this model is: “Who is going to work on my project?” In this model, the client is excluded from the team creation process. It’s always up to the provider of managed IT services which kind of resources to put on your task and whether they will be shared with other projects. Thus, the client doesn’t have a say in the experience and qualifications of the team members who will work on their project. 

Benefits of IT managed services companies

Working with providers of managed IT services has many benefits, ranging from increasing your development capacity, fulfilling the skills you lack in-house, and optimizing your budget for software development. Below, we go over the main assets of working with IT managed services companies in more detail. 

  • Increasing your development capacity

As your project grows, your in-house team members may get overwhelmed with the increasing number of tasks or even suffer from scope creep. Facing this may lead to missing deadlines or losing momentum during the development process. The goal of hiring a managed IT services company is to get access to resources to handle a growing scope of tasks and free up your internal team. 

READ ALSO: Offshore Development Center vs. In-House Team: Which one is Best for You?

  • Access to a wide range of quality skills 

Chances are your project requires implementing recent technologies, for instance, AI/ML, IoT, Data Science, Cybersecurity, Blockchain, Cloud, and more. This kind of tech talent is hard to combine locally. Fortunately, in many cases, IT managed services companies do a good job providing companies with managed IT teams based on their competencies needs, as they tend to have access to a network of engineers at hand.

  • Managed IT teams at a reasonable cost

A managed IT services company can be a great cost-cutting tool, as it lets you cross out such expensive operations as team formation, onboarding of new hires, and team retention from your agenda. A solid managed IT team will deliver on your goals, whereas you save on team management, administration, employee bonuses, and more. The resources you spare this way can be further invested in your brand promotion. 

IT managed services firms: Downsides

When you cooperate with IT managed services firms, dealing with potential risks is essential. This section is dedicated to the potential risks and challenges of managed IT services.

  • Communication issues

Working in a distributed software development environment may create some obstacles in communication between the involved parties. Time zone differences, language barriers, and cultural discrepancies can be serious challenges for building effective communication in your managed IT team.

READ ALSO: Outsourcing vs Outstaffing: Which one is Best for you?

  • Qualifications of engineers

The qualifications of engineers who are going to work on your project are of key importance to the quality of the product. While managed IT services is a great way to expand your capacity, the client rarely knows exactly who is going to work on your project. That way, you need to rely on the provider to guarantee you a well-executed project. 

  • No control over the project

When hiring a provider of managed IT services, you give up one of the key ingredients of a predictable outcome of the project – personal control over the software development process. As such, there’s a risk that your product won’t be executed with the software development practices you deem acceptable. 

  • Lack of flexibility

Lots of modern projects benefit from agility as a way to change the course of the project at any time to meet the demands of the target market. In the managed IT services model, this will incur extra payment, as the service agreement is laid down in advance and can’t be amended. 

READ ALSO: How to Outsource Software Development Projects Successfully? 

nCube’s approach to managed IT services

If you’re looking for a solution to help you do much more than just overcome the risks of managed IT services, consider our team at nCube. With us, you will enjoy all the benefits of an external engineering unit with none of the risks. Here’s what we offer:

  • Direct access to your managed IT team 

With us, the client is able to manage the process directly and build a relationship with the team personally. Our approach also gives you the benefit of communicating and working with team members without intermediaries. It means that you can manage the project in your own unique way. 

  • Involvement in the recruitment process

During our team creation process, you will be the decision-maker when it comes to building your remote unit.  That way, you will approve all team members personally. As a provider of a managed IT team, we will match you with candidates who fit your requirements in the best way. 

  • A large pool of tech talent

We build teams in Eastern Europe and Latin America, the regions that provide access to pools of tech talent with a variety of quality skills. Many engineers in these regions have experience working with IT managed services firms, which guarantees they have strong tech skills and are strong communicators. 

READ ALSO: Nearshore Product Development: Eastern Europe and Latin America Overview

  • A personal approach

We will build a managed IT team according to your requirements. All engineers we provide have made the cut after our thorough internal screening process to ensure they are a perfect fit for you in terms of tech competencies, soft skills, English proficiency, and any other qualities you deem necessary. 

Contact us if you are looking to create a managed IT team fully dedicated to your project, working within a transparent model. 

When looking for new labor markets, you might have come across managed IT services as an approach to building a software development team. Much like outsourcing, this approach is about partnering with an outside vendor that provides a managed IT team to execute your software development tasks. 

Managed IT services is one of many ways to source software developers, alongside Staff Augmentation and Dedicated Team Models. As a company that works with all of these models, we can attest that the devil is in the details when it comes to the benefits they may bring to your company. 

In this post, we will highlight the pros of managed IT services and compare them with other approaches as well. You will also find out if it’s the right choice for your company. 

Managed IT services

This model of IT service assumes delegating software development to an outside provider, often in a nearshore or offshore zone. The goal is to create a managed IT team to work on the client’s project. Here’s how it works:

Process: 

By definition, the vendor of managed IT services provides you with a team to deliver on your goals. As a client, your role boils down to providing a Project Scope that outlines deliverables and timeframes, which the provided team is bound to follow. Team management, engineering practices, and workflow remain up to the provider. The client gains access to the IT infrastructure, such as development environment and code repository after the milestone is finalized.

Access to team members:

While a managed IT team is an offshoot of your organization, you will not be communicating directly with the team members executing your project. During the course of the project, you will communicate with a project manager or account manager about the completed tasks, potential hardships, bottlenecks, etc. 

Recruitment: 

With managed IT services, you will be excluded from the process of forming your managed IT squad. It’s up to the provider how to shuffle their resources – whether it will be free engineers from the bench, dedicated or shared teams who will work on your project. The bottom line is that your project should be executed in line with your specifications, no matter who handles it.

Billing:

In a managed IT approach, the payment model is fixed and based on the provided solution, as in tasks delivered and milestones met by the team. Any deviations from the pre-defined set of tasks will incur an additional payment. 

READ ALSO: IT Team Augmentation: How to Pick the Best Provider

Staff augmentation 

Staff augmentation has a lot in common with managed IT services, in particular, in the part of providing a team for project execution. Let’s take a more in-depth look. 

Process: 

Staff augmentation suggests that the managed IT team works under the client’s leadership. Within this approach, the provider builds a custom team and helps the client integrate team members into their company. Thus, the team members will inherit the client’s internal approach, processes, quality measurement practices, and communication style, which lends itself to great control over the project. The IT infrastructure is also provided by the client.

Access to team members:

You’ll have direct access to the members of your managed IT team. Additionally, you can choose between the approaches – use the team as your stand-alone unit or integrate them into your existing software development units. Whichever way you choose, you’ll manage and communicate with the team as you see fit. 

Recruitment: 

The client gets to interview and handpick team members within a multi-step process that includes internal screening for tech skills, English proficiency, and company fit on the side of the vendor. That way, your managed IT team is created with a joint effort with you and the provider.

Billing: 

Staff augmentation is based on the salary of a full-time team member plus a service fee. The client gets hours worked on their project while the provider bills for hours spent and invests in team retention services. 

READ ALSO: Types of IT Solution Consulting During Times of Uncertainty

Dedicated Team model 

A dedicated team is a type of managed IT team that is dedicated to the execution of your project. Unlike staff augmentation, a dedicated team is a stand-alone unit with its own software development practices, methodology, and more. Your dedicated team is set on a goal and moves on towards it – and you can oversee how it goes first-hand. 

Process:

The client sets the direction of the project, whereas their dedicated managed IT unit works on your project, full-time with direct reporting to you or your leaders as if they were your in-house team. In this model, the provider is responsible for setting up IT infrastructure for the team and taking care of team member retention and their overall happiness.

Access to team members: 

Unlike managed IT services, the client is proactively involved in the management and communication with the team, monitoring daily activities, assigning tasks, etc. The work with the dedicated managed IT team starts with interviewing software development candidates and goes on till the finish of the project. 

Recruitment:

The vendor of the managed IT team is responsible for creating a team that fits the client’s vision, goals, and requirements. The steps of the recruitment process are akin to ones in staff augmentation and are transparent to the client – internal screening on the side of the provider followed by client screening. 

Billing: 

The expenses for the dedicated managed IT team are comprised of the salaries of the team members, plus a vendor’s fee that goes into team retention services, workplaces, and more. 

READ ALSO: Your Guide to IT Team Augmentation vs. Managed Services Comparison

Managed IT services: Benefits

The benefits of managed IT services lie at the intersection of other models of outsourcing, so they tend to overlap in many cases. In essence, this model is about expanding your development capacity, reducing time-to-hire, and bringing in solid specialists in IT services. Below, we go over the pros of managed IT services in more detail. 

  • Focus on your principal goals

As your project runs its course, your internal team may get overworked due to the increasing number of tasks. At some point, they may even become unable to scale whenever you need it most, causing you to lose momentum when it comes to the speed of software development. Managed IT services allow you to free your core team up from the extra tasks, for example, quality assurance or cloud migration.

  • Uncover the needed expertise

Newest technologies, for example, AI/ML, Blockchain, and IoT require fresh, in-demand IT service experts you may lack in your location. If you are hard-pressed to source this type of expertise, you can bring in a managed IT team from other locations, and even faster. A reliable vendor, for example, nCube will provide you with a managed IT squad based in Europe. 

  • Trim costs 

Managed IT services let you eliminate the costs for recruitment, onboarding, and retention of developers. You will get a solution produced by the managed IT team without investing in recruitment, onboarding, and managing the team directly. The time and costs you save can be further invested in your business. 

  • Get a reliable IT services partner

When you partner with a managed IT provider, you get a team well-versed in your company processes. We at nCube can build you a managed IT team, in the same way we did for many companies, for instance, Viber, Cross Engage, Flightright, etc. We will ensure that it will be your reliable and sustainable team working for you for as long as you need it. 

READ ALSO: How to Build Your own Remote Software Development Center 

Final thoughts: Who are beneficiaries of managed IT services

All benefits considered, who will find managed IT services most beneficial?

First of all, the leaders of complex projects who require a full-fledged development team to execute a certain task. In this case, your managed IT team can serve as an offshoot of your organization, working on your goal, without distracting you from the core project. 

Secondly, the leaders who don’t have the internal capacity to manage an IT team. If you don’t have a specialist in-house with the requisite technical background to oversee the development process and conduct technical interviews, then managed IT services can be beneficial for you, as the provider will step into the cracks and use their own existing expertise to execute your project. 

 Then come projects with sensitive information. Having a managed IT team is the most reliable option for projects where protecting sensitive data is critical. It is much more secure than working with other solutions, like freelancers, as vendors usually ensure that the necessary security measures are in place to secure your IT infrastructure, which should be outlined in the service-level agreement and NDA contracts.

Finally, long-term projects, as in 6+ months. A managed IT model offers a focused approach when it comes to long-term objectives. For example, when you source developers through nCube, they will become an indispensable cog in your development workflows. We guarantee that your managed IT team will work on your project for as long as you need it, as we always strive to bring in skilled developers and build a comfortable working environment for them to thrive. You are welcome to read more about this in our Success Stories section or contact us for more details. 

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