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Managed services is the practice of outsourcing day-to-day management responsibilities as a strategic method for improving operations and cutting expenses. This can include outsourcing HR-activities, Production Support and lifecycle build/maintenance activities. The person or organization that owns or has direct oversight of the organization or system being managed is referred to as the offer-er, client or customer. The person or organization that accepts and provides the managed service is regarded as the service provider or MSP.
Typically, the offer-er remains accountable for the functionality and performance of managed service and does not relinquish the overall management responsibility of the organization or system.
Common managed services
Common managed services include but are not limited to:
- Information Services
- Business-to-Business Integration
- Communication Services
- Internet (provided by an Internet service provider)
- Email (provided by an Email service provider)
- Telephone (typically provided by a telephone company)
- TelePresence (provided by a TelePresence Managed Service Provider)
- Videoconferencing (provided by a Video Conference Managed Service Provider or by a Video Managed Service Provider)
- Voice over Internet Protocol (Provided by a VoIP service provider)
- Supply Chain Management Services
Managed services provider
A managed services provider (MSP) is typically an information technology (IT) services provider that manages and assumes responsibility for providing a defined set of services to their clients either proactively or as they (not the client) determine that the services are needed. Most MSPs bill an upfront setup or Transition and an ongoing flat or near-fixed monthly fee, which benefits their clients by providing them with predictable IT support costs. Managed Service Providers (MSPs) sometimes are contracted to manage multiple staffing vendors and to measure their effectiveness in filling positions according to a customer's standards and requirements. In effect, the MSP serves as a "neutral" party that offers the customer a complete workforce solution while ensuring efficient operation and leveraging multiple staffing companies to obtain competitive rates. MSPs typically use a Vendor Management System (VMS) as a software tool to provide transparency and efficiency — along with detailed metrics to the user — related to every aspect of the contingent and contract workforce. The model has proven its usefulness in the private sector, notably among Fortune 500 companies, and is poised to become more common in the government arena.
MSPs often use specialized software, in order to control and deploy managed services to their customers known as Remote Monitoring and Management (RMM) software.
The business model behind managed services has been commonplace among enterprise level companies. The model has also been adapted to fit small to medium sized companies by the value-added reseller (VAR) community as they evolved to provide more consistent budgeting and higher levels of service to small businesses and mid-size enterprises.
In Information Technology and Telecommunications
IT manufacturers are currently moving away from a "box-shifting" resale (whereby partners simply sell off the shelf solutions) to a managed service offering. Key challenges for traditional resellers adopting an MSP offering is the billing process and sales process itself, the sale is more service based.
- Application service provider
- Digital solutions provider (DSP)
- Customer service
- Enterprise architecture
- IP-managed VAS
- IT Managed service provider
- Service (economics)
- Service economy
- Service design
- Services marketing
- Service provider
- Service Science, Management and Engineering
- Service system
- Technical support
- Web service