What Are Managed Services?

The term managed services typically applies to the delegation of responsibilities by businesses to an external company or a third party to facilitate operational efficiency. The third party or the service provider is an established specialist in their respective vocation. The business tasks the third-party provider with the responsibility of the range of procedures and operations pertaining to services offered. The provider will help in maintaining, monitoring, and delivering support in the respective area of responsibility as well as anticipating and adapting to new technology and trends.

Types of Managed Services

A managed service simplifies a business’s operations and offers many benefits. It is not uncommon to find a business delegating associated responsibilities to an external company. A managed service is a flexible term and may pertain to separate areas that can be managed. A business can obtain the help of multiple third-party providers to focus on its own operations, thus making it hard to categorize managed services according to types. Modern businesses usually rely on the following types of managed services:

  • Managed IT Support Network
  • Managed Software
  • Managed Security Services
  • Managed Communication – internet / phone
  • Managed Transportation
  • Managed Equipment and Machinery
  • Managed Payroll
  • Managed Cloud Infrastructure
  • Managed Website Services
  • Managed Human Resources
  • Managed Marketing and Advertising
  • Managed Market Research
  • Managed Finance
  • Managed Supply Chain
  • Managed Facilities
  • Managed Water Supply (remove)
  • Managed Power (remove)
  • Managed Data Analytics

The term managed service is chiefly used in conjunction with IT support. In general, if a business uses the term managed services, it is referring to the third-party IT specialists’ management of its IT infrastructure.

Managed Services Alternatives

The most common alternative to managed services is the break-fix model. Rather than pass the responsibility of a segment of its support operations, the business only attempts to get something fixed if it is broken. A specialist is contacted only when the need arises. The external support comes in – this may take some time - assesses the situation, works out the solution, estimates the cost, and then proceeds with the fix. The customer has a limited relationship with the provider, who will only address the need.

The other alternative would be the business performing the task required itself, i.e. in-house. This would mean assigning personnel towards the requirement or hiring a team of professionals to deal with the problem should it arise. This is often a difficult proposition especially for small businesses due to the increased associated cost and a diversion from the core operations of the company, when alternate providers may supply the same services at a lower cost.

Working with a Managed Services Provider

The selection of the right Managed Services Provider or MSP can be complicated. There are many service providers at all tiers of operations. Each has its own way of operating and must be deeply scrutinized. These service providers are defined by their own respective components. Before choosing a provider, the business must appreciate that the MSP is an extension of the business itself. The provider’s services affect business performance directly, positively and negatively, and the new relationship forged should be of mutual respect. Great care and due diligence must be undertaken.

A managed services provider must be skilled and accessible. They should provide critical support at all hours. Their services should be secure. They are handling and have access to the business’s sensitive data and must have apt security measures in place themselves. The MSP should cover the range of services associated with the operation, so the business has a one stop solution to all associated needs. The MSP should not be outdated or reactive. The MSP should be resourceful, flexible, proficient, adaptive, progressive, innovative, and reliable. The service provider should offer multiple tiers of services so the business can choose the best option for their work and economize. The contract with the providers should be well laid out and should specify the responsibilities undertaken by the provider.

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Benefits of Managed Services

Managed services offer a business profound utility and many benefits as follows:

  • Availability of expertise. Lack of know-how can end up costing the business significantly and adversely affecting its operations.
  • Enhance focused on operations. Business can focus solely on its core operations when support services are performed externally.
  • Reduces operational costs. The business doesn’t need to hire/retain professionals, maintain hardware and equipment or train/update employees.
  • Facilitates effective budgeting. Able to identify future costs for the given time.
  • Increased efficiency. Achieved through optimal management of technology.
  • Enhances competitiveness. Due to better efficiency.
  • Quick implementation of new technology. The expertise gleaned through the managed service will allow the business to be aware of, adopt to, and adapt to technological advancements more rapidly.
  • Increased competitiveness. Provides small businesses a way to compete with larger, more established ones.
  • Reduced risk for the business. The MSPs will strictly adhere to regulations pertaining to the services they offer, thereby reducing the company’s inherent risk.
  • Increased support. Customer support is available as needed.
  • Prevention. Proactively find and prevent issues before they arise.
  • Reduced downtime. Which helps your business move away from the break-fix model.

Managed Services vs. The Break-Fix Mentality

A managed service is a proactive measure. The break-fix mentality signifies a reactive way of operating. It is costlier since professionals are generally priced higher on an ad hoc basis. The costs with break fix are higher, variable, and hard to budget for beforehand. With managed services, the external company has a vested interest and an established relationship with the customer. The service provider will provide dedicated support and will also be looking to ensure that the customer’s systems are properly managed and up to date. With break-fix, the service provider is concerned mainly with locating the issue, fixing it, and billing the customer. The customer’s operations are not a priority and they will accommodate the customer when they are able to. This can also cost a business time as a resource. Break-fix mentality translates into slower adaptability to new technology, especially for small businesses as they may not be adequately equipped or have relative expertise at hand.

How are Managed Services Priced?

Managed services are price as per the following models:

  • Monitoring services only. MSP monitors business’s systems and processes, attending to issues as they arise. They facilitate multiple tiers of service in this model. Fee is generally small, but cost can rise depending on the need.
  • Time & material. Generally, MSPs don’t engage in this as it is more of a break-fix model. The provider will provide a service only when something is needed in case of a systems breakdown.
  • All in services. Comprehensively covers all aspects of the managed service required.
  • Per User. Usually monthly or annual rates are offered per each user of the service.
  • Per Device. Flat fee is charged monthly as per equipment/device supplied by MSP.
  • Tiered. Bundled packages for the managed service are offered so the customer can choose the one ideally suited to their needs.
  • Customized. Also referred to as a la carte. Focus is on specific services to be bundled according to customer needs. Payments are often worked out in the way mutually agreeable to both parties.

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What are Managed IT Services?

Managed IT services is when an MSP covers all IT related aspects for a customer. The company may or may not purchase devices. A managed IT service will involve the providers monitoring and managing the customers IT workstations and IT network. MSP ensures the structure is in place, carries out installations, checks the systems, and provides support whenever needed. The MSP will also offer troubleshooting and consultation to companies regarding available options and courses of action for their IT needs. Managed IT services eliminate the necessity of an IT department.

Why are Managed IT Services important?

For modern companies, managed IT services are extremely important. They level the playing field for smaller businesses who cannot afford their own IT department. They help the business to be competitive but reduce operational and worker costs and facilitate operations efficiency. Often, marketing, sales, inventory, payroll – all aspects of the business are facilitated by the IT department. Managed IT services simplify all operations and boost efficiency and performance.

What does Managed IT services mean?

Managed IT services means that an external third-party firm is administering all the company’s IT requirements.

What is included in managed IT services?

The work of an MSP will depend on the services that companies select as per their requirement. IT MSP companies offer the following:

  • Managed cloud infrastructure. MSP facilitates and monitors the cloud network – many people have access to the company’s information at the same time.
  • Managed backup and recovery plan. Infrastructure information is stored offsite with the MSP and if needed can be recovered in case of unexpected emergencies.
  • DAAS. Desktop as a service. The customer’s processes are run from a virtual desktop hosted by the MSP’s cloud infrastructure.
  • Managed communications. All the company’s communications such as call, emails, messaging, file sharing, etc. are included.
  • Managed security. Through its own enforced security measures, the MSP protects the company’s IT structure from viruses, malware, cyber-attacks, etc.
  • SAAS. Software as a service. MSP is the intermediary between the business and the developer and ensures efficient utilization of software.
  • Managed networking and infrastructures. MSPs facilitate storage, hosting, and maintenance of data for the customer’s network.
  • Data analytics. The provider analyses the information gathered and counsels the business to attain optimal functioning.
  • Managed support. Troubleshooting updates and remedial measures are provided.
  • Managed website services.

How do you manage managed services?

MSPs essentially exist to help a company. Existence of their services is not a solution. Management of the relationship is important to derive optimal use. Selecting the right MSP is the main step(main reason?) for the management of managed services. The company must first identify the MSP best suited to its IT network. Next is evaluating the pricing model and selecting the best suited one bearing the cost impact and services offered in mind. The terms of agreement and tier of support must be considered. Once this option is identified, the optimal duration of the contract should be appreciated and the contract should be locked in, thus accommodating budgeting aspects for the given period. The MSP must accept undertaking all associated tasks with the operations under consideration. It is important to establish a point of contact in the MSP for efficient communication. Henceforth, the customer should let the MSP do their work, with the continuity of the relationship to be based on the performance of the MSP.

What is the difference between managed services and outsourcing?

Outsourcing is the procurement of external services from a third party. The third party will not necessarily manage the services supplied. Through outsourcing, a company can procure the elements for its IT systems and network. The control and decisions remain with the company and will be influenced by the proficiency at their disposal. Managed Services Providers collaborate strategically with the company with respect to the managed service they provide. They help direct the IT network to operate and evolve in the manner best suited to the company. Outsourcing, on the other hand, will only be in respect to the delivery of the specific service required.

No matter what your needs are, RDI is here to help. Contact an RDI team member today to learn more about our managed services and what we can do to help your company succeed!

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