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.
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:
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.