As the world around us changes, so do the terms we use to describe things that have been around for decades. This phenomenon is very noticeable in the political arena with the advent of changing terms to be “politically correct”. I’m not going anywhere near political topics in this blog, but you get the point.
Terms are also changed in the business world, often by someone in marketing trying to put a new spin on an otherwise old subject. One prominent example today is the cloud. Cloud can mean a lot of different things to different people, but the basic definition is moving computer systems or software applications outside of your office or home into an offsite datacenter or datacenters. Anyone using iCloud to store their photos or music is using the cloud. However, cloud hosting is nothing new. Software and systems have been housed offsite in datacenters for years. In the 1980’s and 1990’s this type of service was often referred to as ‘offsite hosting’, ‘colocation’ or simply ‘hosted services’.
Like cloud, managed services have been around for decades with different names. Today, an entire industry has been built around managed services. The companies who provide managed services are called Managed Service Providers or MSP’s. Managed Service Provider is most often used in the technology industry. Gartner* defines Managed Service Provider as the following:
A managed service provider (MSP) delivers services, such as network, application, infrastructure and security, via ongoing and regular support and active administration on customers’ premises, in their MSP’s data center (hosting), or in a third-party data center. MSPs may deliver their own native services in conjunction with other providers’ services (for example, a security MSP providing sys admin on top of a third-party cloud IaaS). Pure-play MSPs focus on one vendor or technology, usually their own core offerings. Many MSPs include services from other types of providers. The term MSP traditionally was applied to infrastructure or device-centric types of services but has expanded to include any continuous, regular management, maintenance and support.
As usual in our field, the definition includes an overabundance of techno babble. In a more generic sense, the definition of managed services is using a third-party company to provide a business process or service traditionally performed within the company using company employees and resources.
Managed service companies make money by charging monthly fees for the services they provide with the intent of providing a stable and predictable cost that can be budgeted for by the customer. This is the “continuous, regular management, maintenance and support” in the Gartner definition. In most cases, the monthly cost of managed services is far less and at a higher quality than attempting to hire and operate internally.
Before managed services, outsourcing, fractional services, and consulting were common synonyms used to define the service. In my opinion, over time, primarily due to a small percentage of poor-quality providers, outsourcing and consulting were cast in a negative light with lower quality results and higher costs. The industry needed to distance from the negativity and managed service provider was born.
However, managed services come with its own challenges. It can be very nebulous and generic to many in the business world.
At its core, managed services are about taking a business process or portion of a business process and hiring an external firm to provide those services and do so with higher quality, typically at a lower cost when compared to hiring a team of employees to do it internally.
Although Managed Services and Managed Service Provider are often attributable to the technology industry, the concept applies to the entire professional services industry. Each of these services can be aligned to a business process needed by any company running a business. The amount of ongoing need for a service is dictated by the type and size of the business itself. Although many have not embraced using the managed services moniker for their services, the concepts are the same. Some common groups of managed service providers include:
Human Resources (HR)
Information Technology (IT)
Each group can have many specialty services within them. Customers may have the option to choose the type and amount of managed service they need for their business. Using the example above:
Month end close and reporting
Human Resources (HR)
New hire processes
Information Technology (IT)
Systems and services management
The customer has the choice to choose what service and amount is right for their business. As a company that has provided technology services for the past 20 years, we have seen the ‘preferred’ terminology for what we do change from consulting to outsourcing to managed services.
At Fluid, our Managed Service Provider offering means we take over the day-to-day and ongoing technology needs of our clients, including managing their other vendors (often a pain point). It is an all-inclusive plan purposely designed to alleviate the risk, stress, and pressure related to managing technology.
From our clients perspective, our MSP plans simply means someone else is handling all their technology needs and they can focus on running their business. Our clients also know we will proactively keep them secure and provide advisory services to help ensure technology is being used to maximize productivity and align to their company business objectives. In reality, we strive to help the company use technology to grow and make more money.
Whether its unlimited helpdesk support with excellent service and response time or complicated migrations of systems to the cloud, we have a relationship built on trust that allows our clients to lean on us while they run the business. We manage their technology operations top to bottom as if we were an employee.
Our most important metric we measure in relationship to our clients is client satisfaction. If our clients aren’t 100% satisfied in the service we provide, regardless of the type of task, we are letting them down.
Managed Services can be a very powerful tool when understood and used properly to enhance any company’s business. If you want to learn more about Fluid’s managed service offering give us a ring or click here!
* Source: Gartner IT Glossary https://www.gartner.com/it-glossary/msp-management-service-provider