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What Is the Difference Between Managed Services and Outsourcing?

Businesses that are large, small, and anything in between can benefit from working with external IT consultants for all of their technology needs, including things like network security, desktop monitoring and server installations. But there’s more than one way to obtain IT assistance. Two popular approaches are managed services and outsourcing.

Though outsourcing may be the traditional approach to getting help, in the modern world, managed services are gaining traction. Managed services offer a long-term partnership with a wide reach of services, helping to minimize downtime with personalized support to fit the needs of your infrastructure. The terms “outsourcing” and “managed services” are often misunderstood and misused, so let’s clear things up a little.

What Is IT Outsourcing?

Outsourcing covers a wide umbrella of IT tasks, including managed services. Any time you enlist a third party to perform an IT-related task, you are outsourcing the job. Third-party IT providers can be located anywhere in the world, so they often work remotely, though local service providers are not uncommon. Founded or not, general outsourcing has gained a reputation for providing cheap products and foreign call centers.

IT outsourcing often runs on a break-fix model of service. In this style of IT support, the provider responds to issues as they come up. If a piece of technology breaks down, an outsourcing provider will answer the call to help fix it, which will involve some downtime as they respond. It’s a very reactive approach, so the IT company waits for something to go wrong before they spring into action. They may not focus much or at all on preventative maintenance, and some say there’s a financial benefit for them to neglect it.

Another function of business process outsourcing (BPO) is its focus on specific tasks. Usually, when you enlist a third-party service provider, you get help with a particular duty or a collection of jobs. Pricing may run on a task-by-task basis. Even if payment is hourly, they focus on specific jobs. A company might hire them to remove a virus, install new security systems or set up new infrastructure.

IT is just one form of outsourcing. Other types of BPO include knowledge process outsourcing, such as research and analysis services, and travel arrangements.

What Is Included in IT BPO?

While the individual tasks can be incredibly wide-reaching, some IT business process outsourcing examples include the following:

  • Application support
  • Telecommunications
  • Technical support
  • Disaster recovery
  • Infrastructure installation and support
  • Datacenter management
  • Email management and setup
  • Security and threat protection

Pros and Cons of IT Outsourcing

Many businesses look to outsource their IT tasks for several reasons. One of the most common reasons is that they lack the in-house resources to accomplish the job themselves. They may not want to spend valuable capital on establishing a robust IT department for a few specialized tasks.

Other reasons companies might outsource their IT work include:

  • A larger talent pool: Sometimes it can be difficult to find the talent you need locally. Outsourcing allows you to reach out to a wider talent pool, possibly finding more skilled people than are available near you. Your net widens from within a certain range of your building, to the entire planet.
  • Scalability: If your company is growing, you may need to make sure your IT services can grow, too. Outsourcing means you don’t need to invest in a larger in-house department or manage its upkeep to handle this growth.
  • Reduced expenses: Many times, hiring someone to perform a specific task is cheaper than managing an entire IT team.

Remember that managed IT services offer many of the same benefits because they are a type of outsourced IT.

Outsourcing IT demands may be a disadvantage to companies that already have a strong in-house team, or those who want to retain total and complete control. It does require relinquishing some level of control over your system, but most service companies try to emphasize transparency and communications.

What Are Managed Services?

While outsourced IT acts as a deployment tool, managed services are a management tool. Instead of receiving services as needed, you establish an ongoing relationship with your managed services provider (MSP). They will integrate with your existing team, offering advice, assistance, and consultations along the way. Typically, you’ll gain the expertise of specialists who excel in a broad array of capabilities.

One of the main focuses of an MSP is to provide consultative characteristics and help take over part of your operation. They’ll use their specialized skills and resources to help you reach your goals with the help of business-specific insights. They might focus on overhauling security or improving your infrastructure as opposed to a small component of those goals, like installing antivirus software. They can also take care of day-to-day tasks, or look for areas of potential improvement.

An MSP typically has the expertise and resources to handle certain aspects of your business better than you can.

What Is Included in Managed IT Services?

Many of the tasks that MSPs offer are similar to those of standard outsourced IT services, or those services are included in a more comprehensive approach. In addition to typical services like help desk support and hardware installation, MSPs can assist with broader tasks, such as:

  • Identifying security weaknesses.
  • Improving operating speeds.
  • Monitoring network activity.
  • Conducting ongoing maintenance.
  • Assessing network and security.
  • Managing company-wide mobile devices.

All of these duties can be handled within the scope of a typical managed services consulting arrangement.

Identifying what is included in managed services will depend on your arrangement with the MSP. Some of the different types of managed services include network security, network administration, reliable response services, and cloud computing and data backup.

Pros and Cons of Managed Services

Since managed services are a partnership and not a one-off service, their benefits can be less immediate, or less tangible. They might improve efficiency, lower costs and boost security. They often maintain and monitor a system around the clock, which can help you avoid detrimental problems and save thousands. It replaces the break-fix model and focuses on your IT structure as a whole.

Managed services providers help to address the needs of the modern business. Trying to diagnose and solve an issue after it happens is no longer acceptable. Breakdowns and problems can lead to losses in revenue and extensive downtime. Many aspects of businesses are ruled by technology that is increasingly complex and costly, and most companies will see substantial impacts from even short amounts of downtime.

Instead, with managed services, you have the ability to stay on top of things. Maintenance and preventative measures keep your system up-to-date and secure. If a problem does appear, you can have professionals on hand who already know your system and can solve things quickly.

Some other managed services offerings include:

  • Easy budgeting. A monthly fee makes it easier to predict your costs instead of paying repair fees whenever unanticipated issues occur.
  • Up-to-date technology. Small and medium-sized businesses (SMBs) often struggle when it comes to keeping their technology up-to-date. Managed services often reduce hardware costs and grant access to more modern technology than companies would otherwise be able to purchase.
  • Reduced downtime. With a preventative and proactive approach to your system, managed services can reduce downtime significantly and eliminate issues before they grow into problems.
  • Expert staff members. IT is all they do. Staff members work hard to stay updated on new security measures, technology and best practices. That expertise gets passed onto your company.

The disadvantages of managed services agreements tend to be related to finances and control. Some may object to a static monthly cost and would prefer to pay as issues arise. If issues are infrequent and you’re confident in your security and infrastructure, this may be an acceptable solution.

Some business owners also feel uneasy at the idea of giving up some control. Remember that working with experts in security means that your system becomes more protected than ever, and most MSPs focus on transparency, visibility and showing you what they’re working on. Many have remote access, reports or customizable dashboards that you can visit to maintain a clear view of where your money’s going.

The True Difference Between Managed Services and Outsourcing

While the terms managed services and outsourcing are often used interchangeably, you’ve probably gathered by now that there are key differences. Managed services are just one style of support under the wide umbrella that is outsourced IT. Under that same umbrella are other, more traditional service offerings like break-fix repairs and short-term arrangements that are still considered outsourcing.

The managed services business model is more of a partnership than a one-off service. Their integration into the team makes them incredibly valuable in gathering unique insights and propelling your business to new heights, especially with something like IT that reaches into every nook and cranny of your company. Managed services might help with large internal projects or offer new strategies to help you develop a powerful, secure IT approach.

In comparison, outsourcing handles more specific, one-time tasks like fixing problems as they appear. They won’t try to improve your systems in a holistic approach; instead, they will just fix the specific problem you called about.

In both instances, you get the benefits of:

  • Experts in the field. A provider with exceptional talent and regular training keeps your tech assistance top-tier.
  • Better hardware and software. Due to the business model of these companies, service providers often have, and provide access to, up-to-date tools, programs, and resources. They share these powerful resources with multiple businesses that otherwise might not be able to afford them. Security and separation of data are still top-notch.
  • Flexible use. You don’t pay for an in-house IT department that may be difficult to manage or more costly than necessary. Plus, your IT assistance can scale along with your company.
  • More freedom to focus on business goals. If you’re spending less energy working on your technology, you’ll have more time to focus on improving business practices and achieving your essential goals.

Here are a few areas where they differ:

Accountability With MSPs

Many business owners get a little nervous about the idea of another company having access to their IT infrastructure. When you work with managed services partners, you get a level of accountability that you typically won’t see with outsourced IT providers. MSPs will usually provide more ongoing visibility, such as a custom dashboard with live updates and reports.

MSPs create a long-term relationship with your company, so accountability is critical. You’ll be working with them for the foreseeable future, and they want to show you that they are capable of helping your business.

Partnership and Reliability

Along with accountability, the partnership of an MSP adds reliability. In an outsourced IT approach, your service provider has no interest in keeping your system from breaking again in the future. Maintenance and advice aren’t on their radars.

MSPs, on the other hand, are linked to your success. They want your tech systems to stay working and as efficient as possible. Aside from boosting your business goals and efficiency, a reliable system shows that they are doing their job well. They’ll keep things moving in an ongoing approach.

Reporting and Peace of Mind

One of the biggest benefits of managed services is the peace of mind that it offers. Think of it like insurance. Instead of paying exorbitant fees to deal with issues as they appear, you pay a more manageable amount each month and know that you always have someone to take care of any problems. Plus, they can help with preventative care — maintenance, assessments, and updates are critical for device security and performance.

This peace of mind is well worth the cost for most companies. It removes much of the uncertainty and difficulty of dealing with technology that is critical to the modern workspace.

MSPs for SMBs

The benefits of a third-party IT service are especially prevalent with SMBs. Globally, SMBs are likely to spend more than the rest of the market on IT services by 2023. They tend to have a smaller staff and fewer resources than large conglomerates, but must meet the same compliance and security requirements. Plus, they’re at a higher risk for cybercrimes. An MSP can help SMBs by delivering those enterprise-level resources at a cost-effective rate.

Managed IT Services From Consolidated Technologies, Inc.

Why choose a managed services provider? While outsourcing has its place, managed services is one of the best approaches for most businesses to improve their operations. It can boost efficiency, lower operating costs and provide many other benefits to companies of all types and sizes. With the help of skilled experts and high-end resources, managed services can bring new insights and proactive care to your IT setup.

When it comes to choosing a managed services provider, Consolidated Technologies, Inc. is your go-to choice. We are your one-stop shop for innovation and reliability. Our managed IT services include wide-reaching tasks, like 24/7 monitoring of your whole IT environment, installing patches and updates, managing mobile device usage and assessing networks. Plus, this array of services is cost-effective, to help deliver an exceptional return on investment.

Even if you think your business needs are complex and difficult to achieve, we’re up for the challenge. We’ve been tackling unique problems for years and love to get our hands dirty when most other providers would turn you away. Our highly-trained staff helps us achieve this, as they’re always up-to-date on the latest innovations.

To find out what else a partnership with Consolidated Technologies, Inc. can offer your business, reach out to us today.