Managed services

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Managed services is the practice of outsourcing day-to-day management responsibilities and functions as a strategic method for improving operations and cutting expenses.

Although the terminology varies, typically the person or organization that owns or has direct oversight of the organization or system being managed is referred to as the offeror, client, or customer; and the person or organization providing the managed service is the service provider or Managed Services Provider (MSP).

Generally the client remains fully accountable for the overall management and control of the organization or system - including the functionality and performance of the managed service.

A very wide range of services can be managed in this way, including: HR-activities, production support, computer and IT systems.

Common managed services[edit]

Common managed services include but are not limited to:

Managed services provider[edit]

A managed services provider (MSP) is most often an information technology (IT) services provider that manages and assumes responsibility for providing a defined set of services to its clients either proactively or as the MSP (not the client) determines that services are needed. Most MSPs bill an upfront setup or transition fee and an ongoing flat or near-fixed monthly fee, which benefits clients by providing them with predictable IT support costs.

Sometimes, MSPs 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. In this situation, 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.

In general[edit]

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[edit]

IT manufacturers are currently moving away from a "box-shifting" resale (whereby partners simply sell off-the-shelf- solutions) to a more customized, managed service offering. Key challenges for traditional resellers adopting an MSP offering are the billing process and sales process itself, since the sale is more service-based and therefore less tangible.

See also[edit]