The modern business world strives for perfection in every aspect of its business. Such industrial competition introduced the practice where business firms delegate each department to relevant expert hands, ensuring that all wings of their business are functioning at their full potential. A third party firm offers these services and it is booming business now, specially for the IT service sector.
Such delegations have rapidly shaped up an entirely new business of their own. Businesses these days often choose to acquire specific skills and knowledge for their company without hiring employees full-time. They can do this by using managed services, professional services, staff augmentation, or outsourcing.
What are Managed Services?
Managed Services refers to the practice where a third-party company manages and oversees an entire department or area of another company. Parent organisations hire and outsource to third-party professional management service providers to look after a specific sector of their organisation (like the IT department). The third-party firm supervises its functioning, maintenance, compliance, and development. These approaches have unique characteristics and benefits, and managed services usually provide tailored solutions according to the organisation’s objectives.
Types of Managed Services
Services for end users
Firms ensure their customer service is not compromised at any point. They usually rely on help desks or service desks where the users can get their queries answered. But having the firm’s own setup is only feasible in some cases as the cost incurred is out of hand for middle-scaled firms, so they outsource these services.
Support for Infrastructure
Managed services support IT infrastructure, which constantly observes and counters IT-related concerns. They supervise maintaining and managing an organisation’s IT infrastructure and relevant subordinates. These managed services cover IT infrastructure basics like network, server, and database management.
On-site Services
IT integration and maintenance come with complications, and managed services physically resolve such issues. These on-site services include hardware and software installation, configuration, and maintenance.
Cloud Services
The cloud is a prominent source for storing the database in modern times. Managed services enhance the firm’s data management with easy storage and retrieval through Cloud services. They operate Cloud hosting, storage, and backup on the firm’s behalf.
Security Services
Cybersecurity is a major concern for most firms that have digitised their firm. Managed security services secure the organisation’s information and assets with utmost alert to instantly counter any breach attempts.
Technology Support
A managed service provider ensures that the company they are working for always has the technical help they need. For example, managed service providers always provide device management, application support, etc.
Pros and Cons of Managed Services
Pros of Managed Services
Model Modification
Managed service providers are comprised of IT experts who have sound knowledge and experience in the business world. They evaluate the firm’s overall proposition and remodel its IT subjects with solutions aligning with the organisation’s needs and objectives.
Tech Offered
Tech-savvy service-providing firms carry updated knowledge and have access to the latest and greatest technological developments, which they implement with their clients. Such managed service providers allow clients to enjoy better and more efficient IT services.
Expertise
Full-time IT professionals with specialized skills can greatly benefit an organization’s IT department. The expert team of such IT professionals specialises in different areas, and they enhance the organisation.
Model modification
Managed service providers have disaster recovery and backup plans in place at all times. This gives the firms the liberty of carrying out normal business operations regardless of any unfortunate incidents.
Cons of Managed Services
Physical Presence
Managed service providers usually operate from their own base unless they need to visit on-site. This may be an issue for some organisations that prefer to have an IT team inside their premises.
Cost
Managed services ensure quality but are fairly expensive, especially for small or medium-scale firms. These firms may need help to meet the financial aspects of hiring a third party. However, outsourcing to a managed service provider will seem less costly than having an in-house IT team.
Scope
Managed services usually stay within their standardised policies, which might disable them from exceeding expectations set by their parent organisations. The authority, modification and control level could be beyond the reach of firms that outsource their business departments. Thus, the limited level of customisation could be better for some.
Dedicated IT Team
The generic understanding of goals and policies set by the organisation can get lost in translation as they outsource their operations to an outside entity. However, the external staff may sometimes need more clarity. It is different from having an internally dedicated IT team.
Managed services Vs Professional Services
Managed services and Professional services share a common concept but have distinctive differences. While managed services look after an entire department, professional services offer professional help for specific projects. So let’s dive into depth to understand the differences between these two services.
What are Professional Services?
Professional service is a service provided by an expert or a professional for a specific task or assignment where the experts use their skills and knowledge to carry out the project. For instance, a business firm with legal issues may seek a professional service from a law firm to resolve the issue.
Types of Professional Services
All firms come across external factors outside of their business practices. Firms hire professionals who specialize in specific fields to deal with particular issues professionally and efficiently. These professional services vary depending upon the sectors, like the ones we discuss below:
Computer Science Services
While computer science might not be everybody’s forte, it is essential for any modern business. Digitisation is the future and also the present. But as firms of all backgrounds seek to digitise their business, they must be equipped with human resources to manage their computer science concerns. In such cases, firms hire an IT expert to help the organisation integrate and operate smoothly with technology.
Finance Services
Handling finances is one sensitive aspect of any organisation that must be handled carefully and expertly. For example, any firm would want to keep their accounts clean and tidy, so they usually look for professional accountancy or financial service providers to look after their books.
Marketing Services
Promoting brands impacts interest generation and conversion rate, thus making marketing an important area for businesses to invest. But since every other firm is marketing its product, the marketing sector is fiercely competitive. Therefore, it is almost certain that the firm will only lose to other top marketing firms without an in-house team of quality marketers.
Legal Services
Firms need to acquire top-notch legal advice and services, as it is highly advised to be done under expert supervision. In all business industries, the demand for lawyers is always high because all their operations must be under government protocols and the supervision of legal attorneys.
Planning and Construction Services
Skilled humans, engineers, and labourers carry out planning and construction operations. Only some can complete such tasks, requiring the utmost knowledge and skill set. So, engineers and construction labourers are hired for planning and construction services.
Medical and Public Services
Some skilled professionals train and qualify for professions of the highest responsibilities, like medical and biochemical sectors. These experts are sought after not just because they offer sound knowledge and expertise but because the seriousness of the issue makes people want to avoid taking risks.
Pros of Professional Services
Versatile
Professional services can be acquired for any project from any industry background and can align perfectly with the parent firm’s specific business needs. Professional servers’ versatility provides various solutions tailored to business requirements.
Improved Efficiency
The expertise and experience of professional services providers implement best industry practices that ultimately increase efficiency. These experts easily identify room for improvement and provide solutions to fasten workflow and reduce repetition.
Cost Savings
Acquiring professional services is more reasonable than hiring an in-house team. These professionals provide the best processes to increase efficiency at reduced costs, improving productivity and profitability.
Focused
Professional services are oriented to single projects and provide expert attention to each detail, ensuring the operation is carried out successfully and flawlessly. They leave no room for errors and usually complete the project by handling every other minor issue.
One-and-done
The services are mostly based on specific tasks or projects, which enables businesses to avoid long-term commitments. It means that the investment made by the firms won’t be on a time basis; rather, the contract would be seen out with the completion of the project.
Cons of Professional Services
Limited interaction
Professional services are external support with limited interaction with the firm’s internal team. This may result in a lack of communication and project ideas or objectives being lost in translation.
Future Maintenance
With the completion of one project, the contract usually gets over with professional service providers. This may force the firm to invest further in future maintenance and support, adding cost.
Slower response
Professional services are only sometimes available as they have allocated time for each project. This may hinder the firm’s internal process as they might have to align with the provider’s timeframe.
Change in Plan Costs More
Professional services are tailored to the firm’s requirements, which can vary depending upon many factors. So the precise mapping of the cost may change with time.
Need for Newer Technology
Professional services mostly use the most advanced methodologies. For instance, it may ask the firm to invest in newer technology or tools to support the project, which can be costly.
Managed Services Vs Staff Augmentation
Managed services and staff augmentation are two identical business models. Managed services is a concept in which a third-party service provider will handle and manage a department inside an organisation. On the other hand, staff augmentation involves hiring temporary skilled employees from a third-party source to fill short-term skill gaps.
What is Staff Augmentation?
Staff augmentation is another famous outsourcing business concept where a firm hires one or two third-party individuals on a short-term basis to fill skill gaps within a company’s existing team. These temporary workers are usually hired to make a complete team competent for IT projects, and the timeframe for which they are hired is usually a few weeks, months, or longer. The third-party provider usually charges an hourly or daily rate for their services.
Types Of IT Staff Augmentation
Short-Term Services
These hirings are done for a specific project or a limited time. A third-party service provider will provide a skilled professional who will come on-site and fill the void spot in the team to complete the project. The contract tenure runs over with the completion of the project.
Long-Term Services
This is also the process of hiring an added skilled individual from a third party to fill in a skilled position, but the time these professionals are hired is usually for a long-term. The hired experts will support ongoing projects or daily IT operations on-site.
Commodity
Commodity services are used when a business needs IT professionals to perform routine or repetitive tasks such as data entry or help desk support.
Skill-based
Skill-based augmentation is when the firm requires an expert for a particular project or assignment like software development or cybersecurity.
Highly Skilled
This is an advanced skill-based augmentation, as firms intend to hire individuals with the best portfolio and skillset. A few examples are IT professionals with specialised skills or certifications, such as database administrators or network architects.
Pros And Cons of Staff Augmentation
Pros
Evaluating Prospective
One of the prominent reasons some employees deliberately choose staff augmentation is to use it as a probation period. For example, business firms can evaluate prospective individuals during the augmentation period to decide whether the employee should be hired full-time
Scalability
Scalability is the major reason firms opt for staff augmentation. Firms can easily decide whether to increase or decrease their staff based on their needs. It allows firms to adjust their workforce to match their needs without the risk of overstaffing or understaffing.
Decreases the Need for Training
In staff augmentation, individuals are hired based on their experience and expertise, meaning the augmented staff would already be an expert and need no prior training.
Knowledge from Industry Experts
Staff augmentation allows firms to hire an industry expert and exert the rich experience they carry. This allows the entire firm to benefit and learn from an experienced individual who knows in and out about various aspects. The brainstorming sessions would hugely benefit from this as the firm would have a reliable perspective of the business world through an expert.
Reduce Expenses
Another important benefit of staff augmentation is that businesses can hire expert individuals temporarily. It reduces the cost significantly by removing the hassle of permanent employment, which incurs other benefits, insurance, and paid time off.
Cons
Additional Processes
Adding numbers to the workforce would inevitably bring more need for human resource management. Every firm has its own work culture and would want to keep track of employee performance and manage their workload. Thus, the process requires additional time and resources.
Onboarding Complexities
The direct integration of an outsider into any firm would have complications. The transition, ideally, will have complications because each firm differs in its culture.
Insufficient Internal Knowledge
Augmented staff usually come from a third-party source, meaning they need more knowledge about the company’s internal culture, policies, and procedures. And limited knowledge may lead to complications in industries where accuracy and compliance are critical.
More Expensive with Time
Staff augmentation is cost friendly because the contract period is short-term. But, in cases where the need may arise that the staff need to be hired for a longer period or repeatedly, it can become costlier than hiring an in-house staff.
Managed services Vs Outsourcing
The key difference between managed services and outsourcing is that managed services are typically continuous, while outsourcing is more oriented and finishes with projects.
What is Outsourcing?
Outsourcing involves hiring a third party and assigning them to supervise a specific task or service. It is a common practice in the IT industry, but other business industries also use it per their needs.
There are different types of IT outsourcing. Here are some of the most common:
Offshoring
A prevalent practice, mostly in the IT industry, is to hire a company from a different country while outsourcing the task. The motive behind this is to cut costs, as some countries provide services for lower labour costs than others. Yet, despite it coming with a few language barriers, time zone differences, and quality control issues, it is still a very famous practice in the modern business world.
Nearshoring
A prevalent practice, mostly in the IT industry, is to hire a company from a different country while outsourcing the task. The motive behind this is to cut costs, as some countries provide services for lower labour costs than others. Yet, despite it coming with a few language barriers, time zone differences, and quality control issues, it is still a very famous practice in the modern business world.
Onshoring
Onshoring is another similar practice, but the hired third-party company is from the same country. This may prove costlier than outsourcing to offshoring and nearshoring, but it enhances quality and communication.
Multisourcing
Multisourcing is when firms hire multiple firms to supervise and manage different aspects of their IT projects and services. It allows firms to achieve proficient services but may also increase complexity and coordination challenges.
Pros And Cons of Outsourcing
A prevalent practice, mostly in the IT industry, is to hire a company from a different country while outsourcing the task. The motive behind this is to cut costs, as some countries provide services for lower labour costs than others. Yet, despite it coming with a few language barriers, time zone differences, and quality control issues, it is still a very famous practice in the modern business world.
Pros
Don't Have To Hire More Employees
Outsourcing cuts the cost of hiring additional employees for firms and saves usual costs incurred with new recruitments like training, benefits, and payroll taxes. Instead, companies can outsource tasks to third-party service providers who already have the necessary staff in place.
Access To A Larger Talent Pool
Outsourcing enables companies to gain top-notch quality experts for various departments. It is useful for firms intending to fulfil highly specialised positions as they can tap into talent pools that may not be available locally or may be too expensive to hire in-house.
Lower Labor Cost
The usual offshoring practice while outsourcing allows firms to enjoy relatively cost-effective staffing as they can delegate tasks to third-party service providers in countries with lower labour costs.
Cons
Lack of Control
Outsourcing means the firm would designate the entire work process to a third-party source, restricting the parent firm’s control over the projects. The drawback is that firms must depend on their service provider to deliver and maintain quality.
Communication Issues
Lack of communication poses another challenge while outsourcing. Usually, third-party service providers operate from their base and sometimes even from a different time zone or with people who speak different languages. Thus, not having the operation inside your firm may cause communication issues.
Problems With Quality
When delegating tasks to the hands of a third party, the quality may sometimes be lower than the set benchmark or expectations. Therefore, it is very important to understand the capabilities of the third-party firm before outsourcing or else there might be issues and dissatisfactions over the delivered quality.
Why is Managed Service the Better Option?
Managed services go into depth to research their client’s businesses thoroughly and ensure a comprehensive approach while supporting operational needs. Firms also enjoy continuous support from a single provider in various areas, including IT, ERP, and security. Managed service is the better solution for firms looking to reduce costs, improve efficiency, and stay competitive. Here are other prominent reasons why managed services are better than their other counterparts:
Predictable Costs
Managed services normally have a fixed monthly or annual cost for IT services. This allows firms to balance their budget more effectively. Moreover, the pricing models are also flexible per the client’s requirements. And it not only allows a sound knowledge of the costs but managed services also look after the hardware and software, significantly reducing the cost that occurs with in-house IT staffs.
Focus on Outcomes
Managed services prioritise outcome rather than output. It is another important reason why managed services are popular; the responsibility carried out is more holistic than oriented towards specific goals. They understand their client’s objectives and provide tailored solutions using advanced technologies to monitor and manage IT systems proactively, ensuring that issues are resolved quickly and efficiently.
Better Expertise
Managed services comprise a team of industry experts who carry sound knowledge and experience. These skilled IT professionals hold in-depth knowledge of various technologies and tools, enabling better support and advice to their clients. In addition, managed service providers are often trained and certified staff, ensuring they are up-to-date with the latest technologies and trends.
Access to Technology
Expert professionals of managed service providers are well-equipped and aware of the latest technologies and tools that are often expensive and challenging to acquire for businesses. Managed services look to be the best in their competitive realm, meaning they invest in the latest hardware and software. Thus, it allows their clients access to the best technology and keeps them competitive and updated with technological advancements.
Scalability
Scalability is another important reason why outsourcing, in general, is popular. But managed services offer more scalable value than the others because it provides a comprehensive outcome. Managed services are flexible and can be adjusted per the business’s requirements. Firms and managed service providers can collaboratively scale their services as per the demand. Moreover, it helps businesses avoid significant costs associated with upgrading their IT infrastructure.
Focus on Core Business
Outsourcing through managed service providers allows businesses to focus on their core activities as their service provider completely takes care of the IT compartment. It enhances productivity and efficiency as the managed service provider would manage all IT-related tasks, freeing up businesses to focus on their core business.
Why is Matrix Solutions the Right Managed Services Provider?
We at Matrix Solutions carry over 25 years of experience in providing premium managed services for businesses of various industries. Our clientele comprises numerous world-class firms, mostly in the legal and financial industries, where we have offered impactful solutions to their unique needs. Our proven history demonstrates the expertise and deep understanding we support our clients according to their unique industries.
Our expert team implements advanced software, ensuring that we offer modern technology solutions per our client’s specific requirements. Moreover, Matrix Solutions specialise in strategic IT planning and evaluating clients’ IT infrastructure to identify areas where technology can be leveraged to improve productivity and efficiency. For constant IT support, strategic planning services, or technology solutions, Matrix Solutions have always stood out in helping firms achieve their IT goals.
Conclusion
Businesses now delegate their departments or tasks to third-party experts through outsourcing, staff augmentation, managed services, and professional services to acquire specialised skills without hiring full-time employees. This flexible and cost-effective approach has rapidly grown the outsourcing industry, shaping how organisations manage their operations and compete in the global market.
Managed services outsourcing allows your company to leave IT management to the experts while focusing on your core competencies. Matrix Solutions provides reliable management and supervision services with a proven track record, enhancing your business.
