When you are around the IT community for a while, you’ll begin to hear some common phrases over and over – and some of the terms seem nearly interchangeable. Two such concepts are the managed services model and traditional outsourcing. Because every professional has their own preconceptions about those terms, you may think you are talking about one strategy when your colleague is talking about another. In fact, if you polled a room full of IT professionals about the differences between the two models, you’d likely get just as many answers. This is because the boundary line between outsourcing and managed services can sometimes be a bit obscure. In this article, we will discuss the descriptions and differences you need to know.
Traditional outsourcing as a business solution has existed for about three decades. The idea’s origin lies in a famous corporation Eastman Kodak. The technology titan decided in the late 1980s that it wanted to hire an outside firm to handle its IT operations. As new IT innovations tend to do, the definition of outsourcing has changed and evolved into diverse outshoot such as Business Process Outsourcing (BPO), server hosting and offshoring.
The Silicon Valley boom introduced for the first time Application Services Providers (ASPs), which were shortlived. The most recent version of this business structure, known as the cloud, has become more prevalent in recent years – which to most business people, is the same concept as digital outsourcing.
This is where the difference in opinion comes into the picture. Traditional outsourcing had become the de facto umbrella term that encompassed any service which a business could manage for another organization.
This concept was renamed ‘managed services,’ which is the term currently in use. Managed services represent the rising demand for outcome-driven models like SLAs. It is a richer and more nuanced concept, delivering targeted solutions that offer cost savings and support changing business expectations.
Managed services incorporate cloud technologies but extend beyond simply designing and deploying solutions to offer comprehensive management of business operations. Even though considered IT terminology, the idea of managed services is less about the technology and more about expertise, resources, tools, and standard processes.
An experienced and reputable managed services provider (MSP) can roll out their services regardless of how the client technology is utilized. In other words, services can be delivered successfully whether the hardware is onsite or hosted at an alternate facility. MSPs can take over operations from a local data center or in the cloud. More and more, data operations are hybrid work lace solutions that integrate all aspects of best practices in IT networking and communications.
To summarize, managed services provide a comprehensive toolbag filled with skills, processes, tools and strategies to take over the management of the company operations.
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