IT Untangled: What is Managed IT Services, or Outsourced IT Services?

The term “managed services” gets thrown around a lot these days. Many providers in varying industries – from HVAC to uniform services – have some sort of “managed” product. Not surprisingly, the IT industry has a managed service as well. This article helps define what managed IT services is.

What Are Managed IT Services?

Managed IT services is an umbrella term for a massive range of services. Basically, it means that external experts assume responsibility for some or all your IT operations. Literally, they “manage” portions of IT services for you.

Managed IT Services vs. Outsourced IT Services: What's the Difference?

Managed IT services and outsourced IT services are sometimes used interchangeably. But there is a difference.

Managed IT services are a type of outsourced IT service -- Not all outsourced IT services are managed IT services though.

The distinction is in who has responsibility. With managed IT services, the outsourced IT provider is responsible for the performance and management of the specified service(s).

An example with managed IT services:

If the outsourced provider is managing the backups, they are responsible for everything related to that backup. They’re the ones making sure that it successfully backs up the data that the company needs. If something goes wrong, they’re responsible for fixing it in a timely manner. If an end user needs to retrieve a file that they accidentally deleted, they’re responsible for restoring that file. If there's a recurring problem, they get to the bottom of it. All of these services are included in the monthly management fee you're paying them.

An example with outsourced IT services (without managed IT services): 

If you don't have a managed IT services agreement and something goes wrong with the backup, the outsourced provider may still be able to fix it. It will either be for an hourly fee, or you may use a portion of time from a prepaid block of support hours (sometimes referred to as a block time agreement). But they aren’t responsible for keeping it running after that one fix since there’s no prearranged management agreement. If it breaks again, needs to be tested/maintained, or if a file needs to be restored, again, they might be able to help for another hourly fee or portion of block time. But they are not doing anything daily to keep it functioning as it needs to. The frustration many people have with situations like this is that as problems happen over and over, they keep spending more money on repairs. That's because the provider isn't investigating the root cause to prevent it from happening again. The outsourced IT provider is only reacting to issues instead of taking a proactive approach.

Fixed-Fee, All Inclusive

It makes sense for some companies to outsource the IT function of their business to a managed IT services provider. In this case, the managed IT service provider acts as the company's IT department and takes care of all IT needs. This includes anything that’s IT-related, such as collaborating on strategic IT plans, securing data, proactive maintenance, and updating software. These types of service agreements usually include unlimited end-user support calls as well. Whether you need help with your password, someone to come onsite, or the highest-level help desk engineer for a complex problem, it's all included for a flat monthly cost.

Partial Fixed-Fee

For some companies, an external IT team manages only a fragment of the IT matrix. In this case, the IT provider supports an internal IT department. The options for this type of agreement are endless. Many times, the internal IT department handles all end-user support requests, device management, and application support. Then the managed IT services provider assists with complex issues, as well as routine maintenance tasks like backup administration and firewall updates.

Both types of arrangements can work for businesses, but figuring out which one is right for you takes more investigation.

Whether you choose a fixed-fee or partial fixed-fee arrangement, the service agreement or IT services contract should be reviewed carefully before signing. There are some “all-inclusive” agreements that turn out to be “mostly inclusive.”

Make Sure the Whole IT Function Is Covered

It’s common for people to think that hiring a company to do select managed IT services, such as network monitoring or backup administration, to mean their IT is taken care of. There is a lot more to the IT story.

If you choose a partial fixed-fee arrangement, make sure you go through all areas of the IT matrix, such as network security, virus protection, strategic technology planning, proactive network administration, end-user support, help desk, patch management, application support, web development, ERP management, web support, etc. Each task should be assigned to either the internal IT staff or the outsourced provider. Who will be responsible for each section should be clear. You never want to end up in a situation where both parties look at each other and say, "I thought you were doing that!" This process clearly defines responsibility and plugs any holes that might unintentionally be left open.