What is managed services?

Managed Services goes by many names in the general market: business process outsourcing, applications management, Infrastructure management, on-demand utility service, outsourcing, IT management and so forth. In essence, in a managed services arrangement, a qualified service provider assumes managerial and operational responsibilities from a client for an IT application or business process. As such, a managed services relationship is an extensive collaboration between the two organizations. It can span a few months to several years, during which time the service provider becomes a fundamental part of the company’s value chain.

What value can a company derive from a managed services arrangement?

Some of the key drivers using managed services can be exemplified as below;

1) Situations in which managed services enable a company to get up to speed quickly on an advanced application. The company may not have the scale, capabilities or time to undertake a rollout, so it engages someone highly experienced with the application to get it operational and manage it on the company’s behalf.

2) The company may have an existing application, say a CRM application for Marketing or Sales and is beginning to affect the company’s business and customer relationships. The company is not sure how to get the application up to the needed level of responsiveness and effectiveness in a short period of time. So, it turns the job over to a qualified service provider. The service provider will re-engineer, upgrade, operate and manage the application for as long as necessary to ensure it meets all the specifications and requirements for customer responsiveness.

3) Applications which are absolutely fundamental to the company’s operations. Examples of these applications would be financial reporting, human resources, supply chain management and customer relationship management. The company’s objective is to operate the application and process efficiently and at the lowest cost possible. A qualified service provider can re-engineer the application to improve performance and establish return on investment.

4) Management of infrastructure and network operations by a qualified and experienced provider which is the backbone of any organization to run daily business.