A Decision Framework for Choosing the Best Model for your Operational Goals
Utilities across the country are facing a perfect storm of challenges in maintaining and modernizing grid infrastructure while dealing with resource constraints. Many utilities report significant difficulties in recruiting and retaining qualified technical staff. In addition, industry trends show that a substantial portion of utility workers are approaching retirement age in the coming years. This retirement wave is particularly challenging because departing workers hold specialized knowledge about grid operations, maintenance procedures, and infrastructure history that isn’t always well-documented. Much of the utility industry is stuck in a continuous cycle of rehiring, onboarding, and training qualified staff.
The above resource challenges, combined with increasing regulatory pressures and grid modernization initiatives, have led many utilities to rethink how they staff critical functions and manage essential processes. Many are seeking external support through a Staff Augmentation or Managed Services model. Let’s examine how these approaches differ and how they might be applied to meet your own utility’s needs.
Staff Augmentation: Tactical Resource Support
Staff augmentation functions as a direct extension of your existing workforce, providing specific technical expertise on an as-needed basis. While this model particularly excels when you need to rapidly scale your team’s capabilities for defined projects or temporary workload increases, it can also be used to maintain staffing levels over longer periods of time This model provides the skill sets you need, when you need them and eliminates the burden of hiring, onboarding, and training resources on your own.
Staff augmentation can be beneficial to utilities by providing the necessary short-term “lift” to help the organization accomplish a specific goal, task, or project within the required time frame while eliminating the need and long-term costs of full-time hires.
Example Projects Well-Suited for Staff Augmentation:
- ADMS implementation support requiring additional GIS analysts
- Peak construction season requiring additional as-built processors
- Seasonal mobile data collection requiring field technicians
- Short-term data cleanup projects with defined scope
- Maintaining consistent staffing levels year over year
Key Characteristics:
- Resources work under your direct supervision
- Flexible scaling based on workload
- Time and materials billing structure
- Short to medium-term engagements
- Focus on specific technical skills
- Vendor is responsible for all training and onboarding after initial training by utility
Managed Services: Strategic Process Ownership
Managed Services represents a more comprehensive approach where an external provider takes ownership of entire business processes, typically through long-term partnerships governed by service level agreements (SLAs) and performance metrics. The key business drivers for the managed services model tend to be more focused on strategic value with an outcome, value-driven approach and a direct intent to move to a strategic relationship with the service provider.
A Managed Services arrangement delivers lasting improvements on utility processes and performance.
Example Projects Well-Suited for Managed Services:
- Ongoing GIS maintenance and updates (e.g., Work Order Posting) with defined quality standards and Service Level Agreements (SLAs)
- Complete joint-use attachment management program
- End-to-end distribution design process
- Comprehensive asset data management program
- Regulatory compliance documentation management
Key Characteristics:
- Provider owns process outcomes through a shared risk model
- Scalable with increased accountability
- Predictable budget, schedule, and outcomes
- Fixed-price or unit-based pricing
- Performance guarantees
- Quality assurance metrics
- Process improvement focus
- Detailed metrics & reporting
Decision Framework Checklist
When evaluating which model best fits your needs, consider the following factors:
Decision Framework: Staff Augmentation vs. Managed Services
| Considerations | Staff Augmentation | Managed Services |
|---|---|---|
| Project Characteristics | ||
| Duration | < 12 months | > 12 months |
| Scope definition | Well-defined | Evolving/Complex |
| Performance metrics | Task completion | Business outcomes |
| Budget structure | Variable | Fixed/Predictable |
| Resource Requirements | ||
| Supervision approach | Direct control | Outcome-based |
| Skill focus | Technical specialists | Process expertise |
| Knowledge transfer | Limited | Comprehensive |
| Resource scaling | Incremental | Programmatic |
| Business Context | ||
| Strategic importance | Tactical | Strategic |
| Process maturity | Established | Needs improvement |
| Quality requirements | Standard | Enhanced/Guaranteed |
| Risk allocation | Utility bears | Shared/Provider bears |
| Organizational Factors | ||
| Management bandwidth | Available | Limited |
| Staff capabilities | Gaps in specific skills | Systemic gaps |
| Union considerations | Minimal disruption | Requires planning |
| Technology environment | Stable | Transforming |
Making the Right Choice
The decision between staff augmentation and managed services isn’t always an either/or choice. Many utilities successfully employ both models, using staff augmentation for project-specific needs while leveraging managed services for ongoing processes requiring consistent quality and performance.
Consider starting with these questions:
- Are you looking to fill specific technical gaps or improve entire processes?
- Do you need direct control over resources or prefer to focus on outcomes?
- Is your primary driver cost variability or predictability?
- How important is continuous process improvement to your goals?
The answers to these questions, combined with the decision framework above, will help guide you toward the model that best fits your utility’s specific situation and objectives.
Remember: The goal isn’t just to add resources – it’s to solve business problems in the most effective way possible while maintaining or improving reliability, safety, and regulatory compliance.
What do you think?