Difference between Managed Services and Outsourcing
In the 20 or so years since the ‘outsourcing’ industry really hit its stride, the term has become an umbrella description for anything that is farmed-out to be managed externally to an organisation.
However, in that time, the IT and wider technology industry has evolved to include a range of more sophisticated services where shared responsibility, deeper understanding of the business, direct consultation, and transparency are the key value propositions.
Chief among them is what we now understand as ‘managed services’.
It might sound like outsourcing, but the reality is that Managed Service Providers (MSPs) perform a function that is quite distinct, and depending on who you talk to, superior to outsourcing in many important ways.
For starters, ‘outsourcing’ is typically associated with larger organisations: think about call centres and help desk teams running out of Asia, or big HR/payroll functions being outsourced by government and other large organisations.
Such contracts are often expensive, largely because they involve ceding complete responsibility to the outsourcing provider – set and forget.
This is great if that’s what an organisation wants, however with managed services, it’s often the case that a company wants to handover most of the responsibility for one or more functions, but retain some control and visibility of the way things are operating all at the same time.
Top 5 reasons managed services is a better choice than outsourcing:
1. Fully accountable to you:
2. Strategic and multi-functional:
3. In the trenches:
4. Real reporting:
5. Long-term vision:
The ‘Outsourcing’ industry really started to take off a little over 20 years ago as governments and other large organisations sought to cut their staff and IT costs.
Since then, there have been mixed reports spanning the full spectrum of success and pain, with the main reasons for failure often identified as high costs or a lack of communication between provider and client.
With managed services, both parties have the opportunity to find the right balance according the specific needs and challenges facing the business, set a pathway for them to evolve over time, and develop a day-to-day working relationship that leaves little-to-no scope for miscommunication.