The labels get used interchangeably in sales conversations, which is how organisations end up with the wrong model and a dispute about whose fault the outcome is. The three models are different products, and the difference sits on one axis: who is accountable for what.
Augmentation adds people to your team. They work in your standups, your codebase, your tooling, under your direction. You are buying capability and capacity, and the delivery outcome remains yours. It fits when you have strong technical leadership and a defined backlog but not enough hands. It fits when you need a scarce specialisation for a period, a Dynamics 365 technical consultant or a security engineer, say. It fits when headcount is frozen but budget is not. The failure mode is using it where direction is the missing ingredient. Augmenting a team that lacks technical leadership just adds more people to the confusion.
Outsourced delivery hands a defined piece of work to a partner who is accountable for delivering it. Fixed or governed scope, their team, their management, acceptance criteria at the end. It fits when the outcome can actually be specified, when you would rather manage a contract than a team, and when the work is separable from your day-to-day systems. The failure modes are well known too: scope that could not really be fixed, a partner optimising for the acceptance test rather than the years afterwards, and the handover cliff where the knowledge leaves with the vendor. Insist on seeing who will do the work, and insist that handover is part of scope rather than an epilogue.
Managed services are accountability over time rather than for a single outcome. An estate kept healthy, a support queue answered, updates absorbed, all at a defined standard. The model fits systems that are live and must stay that way: a Dynamics 365 estate after hypercare, a cloud platform, a security monitoring capability. The failure mode is buying a ticket-closing service when what you needed was ownership. You can tell the difference by whether the provider ever raises something you did not ask about.
Ask what is actually missing. If it is hands and skills under your own direction, augment. If it is a defined outcome you want someone else accountable for, outsource the project. If it is the ongoing health of something already live, that is a managed service. Most real programmes mix the models over time. An outsourced build becomes a managed service. Augmentation carries a team through a peak and winds back. The mixing is fine as long as the accountability line is explicit at every stage, in writing, and everyone can answer who owns the outcome this quarter.
There is also a hybrid worth knowing about if you need sustained capacity at scale: a dedicated team recruited around your programme, operated by the provider to an agreed standard, with the option to take the team in-house once it has proven itself. We run this as our Assemble, Operate and Transition model. It exists because each of the classic three models leaves something on the table over a multi-year programme.
Whichever model fits, the sorting conversation is short: what you are trying to deliver, what you have, and what is missing. Tell us what you're solving and we will tell you which model we would use, including when the answer is not us.