Project work vs Managed Services: which model is best for your organisation?
Even before the pandemic and resulting border restrictions, it was tough to find the right IT talent. And organisations are feeling the crunch as imperatives to digitise become more urgent. That’s left many of the weighing project-based consulting versus using a managed services provider. So which one is right for you?
If you’ve seen part one of this series, where we explored resource augmentation versus managed services, you probably already know there’s rarely a one-size-fits-all answer for every organisation. And sometimes you’ll need a blend of solutions.
But the first step is understanding how each model compares to the other. (Psst… want to see a side-by-side comparison of all three?)
What is project-based consulting?
Project-based consulting is when you engage a specialist or company to support or deliver a one-off project – for example software implementation. They lead the project, deliver it to an agreed timeline, and then step out of the business once the project is finalised.
When should businesses consider using project-based consulting?
When you need a reliable partner to support building a product or leading a complex implementation, project-based consulting might be the answer.
Businesses that opt for a project-based engagement usually have the day-to-day resources in place but do not have the capacity and/or specialist expertise to lead the project.
What are the pros of project-based consulting?
The big advantage of project-based consulting is that the people you bring in for the project are solely focused on that project within your organisation. They’re not going to be distracted by the ‘day-to-day’ within your business. They’ll be experts in delivering the type of project you need, and therefore bring industry expertise and best practice in abundance, working to a proven methodology.
What’s the downside to project-based consulting?
Project-based consulting can require significant investment, including a lump sum upfront, and will be defined by a fixed scope. Any out-of-scope elements of the project, or any scope creep, will be charged additionally so the cost can escalate unless you’re definitive about the complete scope from the outset.
IT resourcing models in action
Different businesses need to deploy different models depending on where they’re at in their development.
For example, a well-known Australian retailer partnered with Simplus to use a managed service model for the business’s fundamental IT needs, while also supplementing with resource augmentation when additional capacity is needed – for example, when implementing a new project. This approach enabled the retailer to successfully re-engineer its customer onboarding and customer feedback processes in a tight timeframe.
The NSW Department of Education, meanwhile, uses a managed service model which has given it the flexibility to implement a new CRM. By having high-level skills and resources on hand, the DoE was able to centralise its data, which has saved it a collective 1.5m hours per year.
And South Australia Health engaged specialists on a project-based model to consolidate its previous email marketing platform data into Sales Cloud and to implement Marketing Cloud, with the specialists working closely with the internal team at SA Health to successfully launch the project.
Comparing all three models side-by-side
Resource Augmentation | Managed Services | Project-based Consulting | |
What is it? | Short-term additional support. | Long-term IT outsourcing of some of all of your IT functions. | External specialists engaged to manage and launch projects. |
Who needs it? | Businesses that have a strong in-house team but occasionally need some additional capacity. | Businesses that don’t have specialist knowledge in-house, and don’t have the capital/desire to invest in building a new IT team. | Businesses in need of additional resources or expertise to launch a specific project. |
When? | To help out on specific projects, or cover absences due to annual leave or illness. | When internal resources lack expertise, or are spending all of their time on the day-to-day. | To launch a time-critical or complex project. |
Pros | Can help deliver projects in tight timeframes and can be easier than adding full-time head count. | Long-term collaboration means the managed service provider gets to know your business, and gives you access to experts when you need them. The cost is predictable, and platform maintenance and support is taken care of. | Access to specialists who are experts at implementing your type of project. They will have best-practice and proven methodologies. |
Cons | Long-term it can get costly, training and onboarding can prove time consuming, and the resource may take up another assignment – there are no guarantees. | You need to invest time in ensuring you partner with the right provider. | Significant investment is usually required up front, and costs can escalate if a project creeps out of scope. |
Picking the right model (or combination of models)
Choosing how you resource – or supplement – your IT team is a critical business decision. Due to the complexity of IT projects, and organisations’ dependency on IT outcomes, it’s imperative to get it right.
The model or approach a business selects will naturally depend on its maturity and the stage it is at on its transformation journey. There’s no ‘one-size-fits-all’ here – and no one solution is better than another: it purely depends on your organisation.
In many organisations, a combination of all three models are used: managed services provides the long-term backbone to the business’s IT infrastructure, supporting resource augmentation and project-based consulting as and when the business needs it. Often, the managed service provider can provide the resources for the other two models, ensuring consistency across all activity. If you’re looking for a CRM partner, make sure to check out the 10 questions you need to ask a Salesforce implementation partner.
On a day-to-day basis, getting your IT resourcing right is essential because it enables the business to focus on bigger-picture projects, rather than being concerned about the inner workings of IT.
And, by having the resourcing strategies in place to facilitate new projects and smooth out staffing gaps, you can ensure that your IT infrastructure is set up to provide opportunities, rather than causing concerns.
This is a lot of info! If you’d rather just chat through your organisation’s unique needs, get in touch with a member of the Simplus team today.
