Managed Services – A Brief Overview

Managed Services can be termed as the practice of outsourcing certain processes and functions designed to improve business operations and reduce the expenses in a cost-effective manner. Karl W. Palachuk, Amy Luby, and Erick Simpson were the pioneers of the managed services business model. All IT functions are covered in this model, wherein the provider makes all decisions related to technologies within the set parameters, and the company needs to review the processes.

A Managed Services Provider (MSP) delivers these services remotely to manage their end-user’s IT infrastructure. Managed services do not replace existing staff, rather help resources engage in the strategic IT program.

The most common managed services include traditional application and infrastructure management such as connectivity & bandwidth, network monitoring, security, virtualization, disaster recovery, storage, desktop & communications, mobility, and help desk & technical support.

Customer or end users pay a monthly fee to avail these services. An effective managed service model aims to absorb the burden of maintaining IT management chores, allowing the client to focus on core business concerns. A managed service provider (MSP) follows differing pricing models based on per-device, per-user, or all-inclusive pricing patterns. A remote monitoring and management service is charged on a per-device basis. An all-inclusive pricing model charges a flat fee for all managed IT service offerings delivered to customers. IBM, Accenture, Atos, Cognizant, Tata Consultancy Services, Capgemini, Infosys, Wipro, HCL Technologies, Datapipe, and ALTEN are some key players operating in the managed services market.

Companies providing managed services under different sectors include the following applications –

Information Services

• Software – production support & maintenance
• Authentication
• Systems management
• Data backup and recovery
• Data storage, warehouse, and management
• Network monitoring, management, and security
• Human resources and payroll

Business-to-business Integration

Supply chain management

• Communications services (mail, phone, and VoIP)
• Internet
• Videoconferencing

Supply Chain Managed Services

• Supply chain planning, monitoring, and control
• Sourcing and procurement
• Logistics and distribution

Marketing

• Marketing strategy & planning
• Integrated marketing/advertising agency services (graphic design, copywriting, PPC, social media, web design, and SEO)

The adoption of managed services helps companies stay updated with the growing technological advancements and address business issues related to cost, quality, and risks. However, managed service providers are facing challenges in cloud computing due to lack of knowledge and expertise. They are either acting as brokers with cloud service providers or providing their own cloud computing services. Setting up a pricing model and following the process is the key challenge for managed service providers. Additionally, maintaining operating costs and paying close attention to labor costs while improving efficiency and maintaining an adequate profit margin is another major challenge for MSPs.

Reasons for Choosing managed services

• Predictable or low costs
• External expertise
• Scalability
• Focus on core competencies
• Improved service quality
• Speed of implementation
• Tailored services

A reliable and networked ICT infrastructure has widened opportunities for learners. Networks enable tutors and students to log in on any workstation and thereby promote the sharing of resources. The offering of managed services addresses key points such as risk sharing, change management, service evolution, and continual improvement for a productive outcome.

Issues with managed services

• Limited physical size of institutions
• Funding constraints
• Lack of prior experience
• Lack of understanding of requirements
• Lack of management priority
• Lack of flexibility and control

Careful Considerations before Implementing Managed Services

It is essential for institutions to describe an output specification in terms of what users can expect from an educational set up. It is important to invest time in understanding the existing processes, costs, and service levels and articulating these overall benefits and value of managed services.

Benefits of a Managed Services Model

Companies can minimize the risks associated with maintaining client data, sensitive competitive information, and other security measures by outsourcing managed services. There are several benefits of a managed services model.

Risk Reduction

Every business operation carries a certain amount of risk. There are bound to be rapid changes in markets, competition, financial conditions, government regulations with advancements in technologies. Managed service providers lower the individual risks involved with each business service and provide the best practices for businesses.

Better Cost Control

MSPs help minimize the chances of expensive network disasters. Outsourcing converts fixed IT costs into variable costs. Companies can break down their costs into fixed month-to-month payments that are not likely to fluctuate. This will help companies plan budgets accordingly.

Focus on Core Business

Every business has limited resources and time. Outsourcing can help to stay focused on core business activities and reduce complex IT concerns in terms of business needs.

Future Proofing IT Services

An organization’s IT department faces funding, technical, security, and operational challenges. A managed service provider trains teams regarding new technologies that have the ability to minimize operational costs for a multi-year period.

Increase Efficiency and Competitiveness

Companies that have in-house teams of full-time IT professionals can deal with growing IT concerns. Outsourcing IT services can help gain expertise, ultimately reducing the associated costs for the development and implementation of specific products or services.

24/7 Availability

Most IT departments are stretched out with back-end functions as well as complex and rapidly changing technologies. Managed service providers are available 24/7 for the functioning of critical business operations to ensure that support is always available.

Compliance and Security

Organizations are bound to abide by certain standards and requisites regarding privacy, reporting, and security as per industry requirements. In addition to regular audits, many organizations are obliged to meet with compliance standards. Managed service providers help carry out these functions as well.