Staff Augmentation vs Managed Services: Comparison | Intellectsoft

Updated: March 9, 2021

Digital transformation pushes companies of any kind and expertise to develop digital products, applications, web pages, software, etc.

In most cases, these businesses specialize in one particular industry and do not have IT departments to take on projects of this kind or lack some resources. Still, solutions exist, as there are different types of external hiring modes.

Two of the most popular cooperation types are staff augmentation and managed services. SA and MS have proven to be time- and cost-effective solutions, but there are significant differences.

We will discuss their main principles and compare staff augmentation vs managed services. So, it will be easier to choose the most suitable type for your ongoing projects.

Staff Augmentation vs Managed Services Model: What Do They Mean?

Staff augmentation implies expanding the existing department by hiring additional resources to join a project. It’s a type of temporary employment that ends once the case is over. Businesses choose this form of cooperation when they do not need to hire someone permanently.

Managed services is another type of outsourcing practice that means hiring a fully-equipped organization of professionals who will be responsible for maintaining and supporting the case.

Once the project is over, a service provider bills the customer for the on-demand service performance.

So, the difference between these two types lies in the following: whereas the SA model enables you to expand the in-house team with additional skilled resources, the MS model implies hiring the whole team, for instance, if you do not have an internal IT department.

Let’s take a closer look at the advantages and disadvantages of these two modes and compare managed services vs staff augmentation.

IT Managed Services Model Principles

IT managed services model is experience-driven and strategic cooperation of a customer and provider where a third-party offers specialized skills, technologies, and processes to achieve an expected outcome.

This employment model lets you hire an entire team of professionals with the right skills and knowledge and all its technical tools necessary for the project.

Companies that consider finding a third-party provider to cover specific projects should take into account the following:

Reliability: make sure you can count on your new partners, ask for regular reports and analytical stats to keep track of the project, and ensure that your partner works according to the agreed plan;
Background: check partner’s previous experience, contact their customers, or read the reviews, so you know you are hiring a professional and experienced team who will take care of your project from end-to-end and deliver a high-quality product;
Prices: review the pricing policy and check whether there are no hidden expenses, so your company will not pay extra costs.

When you choose managed services as a hiring format, the project’s outcome depends solely on your partner. The company takes full responsibility for the project and ensures the case is completed within stated time frames and meets the fixed costs.

IT Managed Services Model Pros & Cons

By choosing MS as a hiring model, you get several advantages that will help your company and ensure an excellent project outcome. Let’s do a detailed review of the model’s pros and cons.

Pros of MS model:

Time- and cost-effectiveness: MS model allows you to hire an entire team of skilled and experienced professionals who have all the necessary tech tools and resources to work on your project. In this way, you save time, costs, and efforts, as you get everything you need. There is a fixed price for their services, and it varies from the amount of performed work;
Control: a service provider takes care of the project from its beginning to its end. But it is vital to choose an experienced and reliable company that has proven to deliver high-quality products and the best results;
Monitoring: the supplier monitors all the processes during the project, takes care of the necessary tools and resources;
Outcome: the result of the project depends on the vendor. MS organization calculates all the risks and provides a suitable plan for the project.

Cons of MS model:

Accountability: ensure that you choose a reliable company. Before selecting a vendor, you should go over the previous customers’ reviews, contact them, and find out more information about the company, how it works, etc.
Costs: it is not always possible to get a full package of tools and resources for a low price. Some of them require higher fees. In case a vendor makes a mistake or doesn’t meet the customer’s expectations, extra expenses are the customer’s responsibility.

Staff Augmentation Model of Outsourcing

The staff augmentation model is used when there is a need to temporarily involve outside staff to increase your company’s capacity to develop new products or upgrade the existing ones.

In this case, the project’s outcome depends on your in-house team, while temporary staff adds the required input. So, when do companies think of using SA? Here are some reasons:

Increased capacity (there is a need to boost the company’s efficiency to complete everyday tasks during a project run);
Bridge to hire (if you have just moved to a new location or start a new product line, you can use SA while you are hiring permanent employees);
Specialized skills (you can find the right resources to cover specific tasks for a short period);
Strategic (SA is a quick way to hire a flexible team of experienced professionals to help you be more agile, and increase speed to market, resulting in gaining the advantage over your competitors).

Although SA is a temporary solution, it has numerous benefits and adds value for the companies that consider this mode of talent outsourcing.

Staff Augmentation Model Pros & Cons

The SA model, as well as MS, has its benefits and drawbacks. Companies might experience SA downsides if they choose the wrong type of outsourcing that does not suit their needs. Let’s view the model from both sides.

Pros of SA model:

Cost-effectiveness: thanks to SA, you can pay only for the required set of skills and time spent on the work. There is no need to keep full-time employees in permanent positions and pay high annual taxes when you know that additional resources are needed only for a short period.
Flexibility: you can quickly get access to missing capabilities and skills and cover staff shortages due to some unexpected events during the project run;
Control and lower risk: SA allows you to control the project outcome and track every aspect of the process. The team’s project manager will allocate the tasks accordingly and maintain the quality of the end product. When outsourcing a third-party provider, you give away the authority to control the development processes, but with SA, you house the whole team in your company and monitor the project, thus lower the risk of ending with the wrong product quality;
Easy employment: you just conclude a contract with one or several employees that will provide you with the necessary skills during the development process.

Cons of SA model:

Dependence on third-party providers that help you find the right talent which can influence your plans;
Inability to find all the appropriate skills, experience, and knowledge in one person. Hired employees might need some time to study your product in detail to join the team and provide you with a high-quality product. It means that you can spend some time on training and educating the additional staff;
Not suitable for long-term projects, there is a chance that augmented staff may leave the project before it is over, and you will need to start the hiring process every time someone quits.

Outsourcing is becoming more popular, but finding an external dedicated development team might be a challenge. Numerous companies offer their services, and it is hard to choose, mostly when you have never collaborated like this before.

We, at Intellectsoft, help other companies to deal with different projects within stated time frames. Our team of professionals will come up with the most suitable solutions for your case.

Get in touch with us and find out everything you need, from terms and conditions to prices and after-project support so your team can get full advantage of outsourcing software development.

The hospitality industry depends a lot on keeping customers happy, but it’s getting harder to attract and keep them. The pandemic hit this industry hard, and now market competition is tougher than ever, with competitive offerings swaying customers. Hospitality businesses are willing to spend big to win customers back. The main questions for many are: how can we stay ahead of the competition, keep our customers, and increase revenue? Keep reading—we’ve got some answers.

Customers today have so many options that getting their attention is a real challenge. It’s not easy to make them choose your business over others. What worked 10 years ago doesn’t work the same way now. Back then, people often chose businesses based on reputation. But with new types of businesses (boutique hotels, craft cafes) popping up or big enterprises getting a new strategy, expectations have changed. The good news is these businesses have shown what works: great customer service. They focus on personalizing the experience, making things easy for customers, offering loyalty programs, and using smart technology.

In this article, we’ll explore these tech strategies and show you how they can help your business grow, and double the revenue. Keep reading to learn more!

The Importance of Customer Satisfaction in the Hospitality Industry

Customer satisfaction, which equals exceptional customer experience, is the backbone of the hospitality industry. It plays a central role in driving revenue and loyalty, as satisfied customers are more likely to return and recommend a hotel, restaurant, or other hospitality business to others. In fact, a study by the Harvard Business Review found that a 1% increase in customer satisfaction can lead to a 0.5% increase in revenue. Moreover, loyal customers are more likely to forgive mistakes and continue doing business with a company, even if they experience a negative encounter.

Let's quickly review the challenges the hospitality industry is facing right now so we can move on to the solutions and our case studies.

Challenges in Hospitality

As businesses navigate the changes in the hospitality industry, there are some key areas where a little improvement can go a long way. From improving customer service to embracing digital transformation and tackling labor shortages, we’ll take a closer look at today’s biggest challenges—and, more importantly, how technology can step in to help. Let’s get started!

Poor Customer Service

Even with strong and high-quality business offerings, poor customer service can drive potential customers and existing customers away. Common issues include:

Long wait times in customer service queues (it is worth remembering that our attention spans 8 seconds, and we live in a very busy world, so quick and efficient responses are more important than ever.)
Poorly trained customer service representatives
Lack of follow-up
Services not being done properly or quickly
Recall issues that require multiple service calls

These problems can frustrate customers. But, at Intellectsoft, we believe that the right approach, combined with technology, can address them effectively.

Digital Transformation Gaps

Approximately 50% of hotels are adopting new technologies, with 43% automating repetitive tasks and 39% upgrading existing systems.
Source: workstaff.app

Source: workstaff.app

While many businesses are adopting digital solutions, some still struggle with outdated systems and fragmented data. Legacy companies often face chaos when trying to manage their data and create new systems or add features.

Some of the recent examples include clients coming to us to create AI solutions for their services while their data simply was not ready for the advanced tasks. We advise stepping back, communicating with a company objective, and working on keeping the data clean (centralized, structured, and segmented).

When we’re asked to create advanced systems using AI, we always emphasize the importance of organized data. To train AI and build such complicated systems that truly work, you need to start from the very beginning—collecting, storing, centralizing, and organizing it. We encourage our clients to align all departments to work internally on the data so we can create a unified digital system that delivers personalized experiences.

If you’re unsure where to start with your data, we can help. Collecting feedback at various touchpoints along the customer journey is crucial for gaining insights into customer satisfaction and loyalty. Book an IT consultation with us, and our experts will guide you in mapping out a path to get more from your data and build a system that works for your business and team.

Reskilling Staff

The pandemic hit hard in early 2020, especially for the hospitality and travel industries. Even five years later, many businesses are still feeling the impact. Recruiting and retaining skilled staff has become a major challenge post-pandemic.

Reskilling to address technology’s impact is of utmost importance, as about 40% of hotel General Managers place it among their top three workforce challenges.

Source: Deloitte

We strongly believe that adopting the right technology can help. For example, creating an app to train your staff not only saves time but also ensures consistency in learning. AI assistants can also work alongside your team, helping with tasks like recruitment (providing industry insights, crafting emails) and staff training. Imagine having an app dedicated to making your team’s work easier and more efficient!

How Technology Tackles These Challenges and Supports a Customer-Centric Hospitality Culture

Automation, AI, and similar technologies may threaten many. However, the debate about replacing humans isn’t about that—it’s about cooperation and working hand in hand with technology to achieve the highest standards and establish brand-new “golden standards.” Technology is here to assist staff in listening to and collecting customer insights from data.

Let’s review some of our cases to see examples of how technology helps improve customer experience and supports customer service.

Examples of Intellectsoft projects

Property management systems (PMS)

We created a web platform and mobile app that makes managing daily tasks easier and offers extra services to improve residents’ experience. It gives a clear overview of daily activities and helps with managing units and users. Residents can easily book amenities, submit service requests, and report incidents. The platform also includes features for equipment management, key instructions, workflows, and custom permissions. This makes it easier for staff to stay on top of equipment and ensure residents have all the information they need. Plus, tools like announcements, quick votes, a forum, and a community calendar help build a connected and engaged community.

Guest Experience Management App

Our next app helped our client improve their guest experience by replacing printed marketing materials and the need for phone calls with a smart solution. Now, guests can easily order in-room dining, make reservations, and interact with staff— through a simple tablet in their room. The solution includes three parts: a custom in-room tablet with a variety of services, an admin panel for hotel staff and service providers, and a backend system that connects everything together. This approach makes things easier for guests and staff, improving both convenience and efficiency.

Existing Customers First: Building Loyalty with Personalized Touchpoints

Keeping existing customers is not just a strategy; it’s well-known that retaining existing customers is more cost-effective than acquiring new ones. In fact, research shows that it costs five times more to acquire a new customer than to retain an existing one. KPMG named customer retention as the number one revenue driver for the company.

Moreover, a 5% increase in customer retention can lead to a 25% to 95% increase in profits, showing the significant impact loyal customers can have on a business’s bottom line. Retention strategies, like personalized experiences and loyalty programs, can foster long-term relationships and generate recurring revenue, ultimately making them an invaluable part of any business model.

Personalization: How Technology Can Help?

Everyone loves to feel special—it’s part of being human. In hospitality, personalization has evolved from being a luxury to an essential standard. With the right technology to manage your data effectively, you can deliver those “wow” moments that guests won’t forget.

More than half of hotel chains are already using personalization features on their websites, booking platforms, and apps, and another 39% are planning to follow suit soon. They’re tailoring experiences to fit guest preferences perfectly.

Source: Deloitte

How does technology make it happen?

CRM Systems: They help you keep track of guest preferences, booking history, and special requests so you can offer services tailored just for them.
Loyalty Programs: Personalized rewards and offers show your guests that you value them, keeping them coming back for more.
AI Personalization: AI analyzes guest data to predict what they’ll love (from room upgrades to local recommendations) before they even ask.
IoT Gadgets: Smart room features like voice-activated assistants, or temperature controls adjust to your guests’ preferences, making their stay more comfortable.

With tech-powered personalization, you’re building loyalty and maximizing the lifetime value of every customer.

Our Case Study: Smart Hotel Management & Loyalty Program

For one of our clients, we created a smart room solution, complete with a custom IoT system. Guests can use a mobile app to control services, explore amenities, and find resort information-- with a special touch to their suite type. For the client’s entertainment business, we improved their legacy software by running a full IT and code check, fixing issues, and making the system better for customers.

Along with that, we developed a mobile app for the loyalty program, allowing businesses to effortlessly reward their customers and keep them engaged with exclusive benefits.

Our solutions not only helped the client with special experiences for guests; it also improved operations, cutting costs by eliminating inefficiencies. Here's what our experts shared:

"We transitioned away from ESB (Enterprise Service Bus) systems, which previously cost millions, and replaced them with more efficient, self-managed solutions. Similarly, we’ve implemented Device Farms that improved operations and saved resources."

Leveraging Software to Increase Upsell Opportunities

Here are some examples of tech tactics that will help your team sell more and introduce new offerings to existing customers, improve overall efficiency leaving your team grateful:

Dynamic Pricing Algorithms

For finance and marketing teams, manually calculating pricing by segment to introduce your clients can be incredibly challenging. AI-powered tools can strongly optimize these strategies by analyzing your database in detail.

Upselling via Apps

Boosting revenue in the hospitality business often comes down to personalized experiences. Imagine this: a guest books a room, and then your app suggests a spa package or a room upgrade at just the right moment. Later, it nudges them to book a dinner reservation or a guided tour designed to their preferences. With apps offering these personalized recommendations during and after bookings, you’re not just increasing your revenue per guest but also skyrocketing their experience. And you do it in a sustainable way, not by speculating, but by offering what your customers desire based on their previous experiences. It’s a win-win: seamless, helpful, and far from pushy.

Inventory and Resource Management Software

Making every resource count in your hospitality business is key. Inventory and resource management software allows you to effortlessly track everything from linens to room availability, ensuring nothing goes to waste. Having real-time insights to reduce overstock, avoid shortages, and optimize operations assists sustainably keep everything under control and know what you need to focus more. It helps maximize room occupancy by aligning bookings with available resources, ensuring every room and item is used effectively. This approach leads to smarter management, better guest experiences, and a noticeable boost to your bottom line.

Adopting these strategies not only optimizes your operations but also drives business growth. Ready to discover how technology can elevate your goals? We’re here to create a tailored solution for you.

Steps For Implementing a Customer Service Technology Solution

Improving customer service in hospitality doesn’t have to be a daunting task. With the right technology, you can smooth the path of your operations, speed up response times, and elevate the overall guest experience. Here’s where you can make it happen:

1. Understand Your Needs

Start by identifying the challenges your business is facing. Are you struggling to manage high volumes of inquiries, track customer feedback, or personalize the guest experience? Pinpointing your needs will guide you to the best solutions.

2. Pick the Right Tools

Choose technology that aligns with your goals. Look for solutions that are scalable, easy to use, and integrate effortlessly with your current systems. Options like CRM software, live chat tools, or a guest experience app can make a difference.

3. Equip Your Team

Technology is only as effective as the people using it. Train your staff to make the most of the new tools, so they can deliver exceptional service and resolve issues quickly. Confident, well-equipped staff creates happy, loyal customers.

4. Keep Improving

Once implemented, monitor how well the solution works. Are response times improving? Are customers more satisfied? Regular evaluations will help you fine-tune your approach and keep things running harmoniously.

Some Tech Ideas for Hospitality Businesses

CRM Software: Manage customer interactions and preferences.
Guest Experience Apps: Delight guests with personalized experiences right at their fingertips.
Amenity Management Systems: Simplify operations for everything from room service to facility bookings.
Helpdesk Software: Resolve customer issues optimally.
Live Chat Tools: Offer instant support and answers.
Social Media Management Tools: Keep customer interactions engaging and organized.

Integrating these strategies will not only improve your customer service but also deliver unforgettable customer satisfaction, loyalty, and, ultimately, your bottom line. Ready to take the next step? Book a consultation with our experts.

Conclusion

To wrap up everything we've discussed, customer satisfaction and experience are at the heart of hospitality. Retaining customers is more than just keeping them around—building strong, long-lasting relationships and consistently meeting their evolving needs. By understanding their pain points and offering personalized solutions, you can inspire loyalty and drive progress. With the right technology and continuous improvement, your business can stay ahead, let go of what no longer serves you, and keep growing.

At Intellectsoft, with over 17 years of experience in software development, our expert team is ready to help. We create everything from mobile apps to full-fledged portals and systems, leveraging the latest technologies like AI, Cloud, and Machine Learning. With deep experience in the hospitality industry, we’re here to craft personalized solutions that bring your business unforgettable customer experience and retain your valuable clients.

Ready to double your revenue and level up your customer retention strategy with personalized technology? Contact our experts, and we look forward to working hand in hand with you to build or revitalize the perfect app or system for you.

Tetiana Borysova

Content Writer

Staff Augmentation vs Managed Services: Comparison Guide

Staff Augmentation vs Managed Services Model: What Do They Mean?