IT Managed Services Model

Understanding the IT managed services model

The basic idea behind IT managed services is that a third-party vendor takes on some or all of the management of a company’s IT infrastructure. Typically, the third-party vendor will take on tasks that are not competitive differentiators for the business. For some companies, this could mean that an IT managed service provider can literally do everything for them. For others, it will mean that an IT managed service provider takes care of routine housekeeping while their own IT staff gets on with value-add tasks.

IT managed services have now become a massive industry and for good reason. Many companies, especially SMBs, need IT infrastructure but do not want the hassle of managing it themselves. This is particularly true when it comes to IT security, where the global shortage of skilled personnel is particularly acute.

At the same time, IT managed services are not a “silver bullet” to cure all IT problems. In fact, perhaps rather ironically, it usually needs to be carefully managed to be successful. With that in mind, here is a brief guide to what you need to understand.

1. You will probably still need IT-literate staff

Often one of the biggest selling points for IT managed services is that the managed service provider takes on the hassle of recruiting, retaining, and generally managing skilled IT professionals. This can make life a whole lot easier for HR. In fact, sometimes it can eliminate the need to hire in-house IT staff.

At the same time, however, it is highly recommended to keep at least one IT-literate person on your staff. In this context, IT literate simply means understanding the fundamentals of how technology works and what they mean in practice for a business. This individual can then “hygiene check” any information given by a managed service provider to ensure that the business agrees with it.

IT Managed Services Model

For the sake of clarity, this is not about “catching out a rogue managed service provider”. It’s about recognizing the fact that manages services are run by people and people view information from different perspectives.

A managed service provider will do its best to understand its client’s business but it is still an external vendor and as such cannot be guaranteed to have the same level of knowledge as in-house staff. Likewise, a managed service provider will try to tailor its communication to its client’s level of understanding, but the more they have to simplify to be understood, the more there is a risk that something will be “lost in translation”.

2. You will still need to budget for ad hoc IT-related expenses

Another major selling point for IT managed services is that they allow organizations to replace unpredictable (or semi-predictable) capital expenditures with predictable operating expenses. This is true to an extent, but it is not (usually) the whole truth. IT managed services will offer you the opportunity to have a predictable monthly bill for predictable services. It will not cover ad hoc expenses, such as installations and initial configurations, upgrades (as opposed to routine updates) or decommissioning. Similarly, it is highly unlikely to involve action to fix problems, except as defined by a service agreement. This generally means doing whatever is necessary to keep a service running in the condition in which it was handed over to them.

Customers therefore need to think about how they are going to manage extra expenses. This doesn’t have to involve going back to the old world of capital expenses, it just means being aware of what other expenses you’re likely to face and coming up with a plan to deal with them. For example, you could lease equipment instead of buying it, thus dealing with both purchase and maintenance costs. You could also use a combination of sinking funds and insurance to cope with the costs of fixing any problems which emerge.

3. Your safest bet is often to stay at least fairly local

The internet may be global but data has to be stored on a physical medium and that physical medium has to be located somewhere in the real world. A lot of the time, the safest course of action is to have that data located as close as possible to you, or, if that is not possible, as close as possible to its source, e.g. your customers. This is increasingly likely to become a legal requirement. For example, if you handle data from EU residents, then you can only transfer it to countries that have what the EU considers to be acceptable data-protection standards.

In addition to this, staying local keeps everyone working to the same sets of local laws and ensures that, in a worst-case scenario, any contract disputes will be handled by local courts.

Definition of managed services