Managed services (outsourcing) versus staff augmentation (out-tasking)

CGI delivers outcomes your business can count on.

With 35 years in the IT business, we've seen our share of trends such as the emergence of staff augmentation—the hiring of temporary contract workers—as an alternative to traditional managed services (outsourcing). While staff augmentation offers some short-term benefits, it can leave organizations with eroding value over the long term.

Under a staff augmentation model, a supplier commits to providing “inputs”—resources at a set price—without any commitment relative to “outcomes”, or business results. Because pricing is fixed (rate multiplied by hours worked) and not tied to outcomes, there is little incentive on the supplier’s part to pursue operational excellence through cost savings and productivity enhancements.

A true managed services (outsourcing) model, on the other hand, is outcome based. The provider commits to deliver outcomes at a fixed price, assuming all associated risks. Because the risk of delivery lies with the provider, the provider is highly incentivized to find ways to deliver the best services for the lowest cost.

With CGI, clients benefit from a true outsourcing strategy. We are results oriented. We combine quality and price while assuming the responsibility and risk for service delivery. Rather than paying for inputs, clients benefit from business outcomes with CGI.

It's all about results (outcomes) versus resources (inputs)

Managed services (Outsourcing) Staff Augmentation (Out-tasking)
  • Supplier assumes control of all or part of the execution component of IT
    • Service delivery commitments expressed as ”service levels”
  • Supplier commits to providing resources of defined capability at a price
    • No service delivery commitments relative to outputs
 
  •  Committed scope and term
  • Limited commitment
  • Pricing tied to service levels and volumes where appropriate
  •  Pricing tied to hours worked and availability
  • Supplier manages delivery model, processes and tools
  • Client manages delivery model, including subcontractors, processes and tools
  • Impacted employees, assets and contracts may be transitioned to supplier (supplier needs to acquire or have the capability to deliver)
  • No change to client's operating model
  • Knowledge must be documented and transferrable
  • Knowledge vested in the individual
  • Supplier assumes the risk of transition and operations
  • All delivery risk remains with client
Commitment to deliver an outcome
 Commitment to provide an input

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