Estimates suggest that over 60% of organizations will rely on managed services by 2025. Outsourcing some aspects of IT management is becoming standard practice for both organizations already leveraging sophisticated software solutions and those undergoing digital transformation.

At Canidium, our business technology services team helps enterprise and mid-level organizations determine if managed services will be beneficial. We are implementation and infrastructure management experts with decades of experience overseeing system improvements.

Leveraging this background, we put together this guide to managed services, explaining when external help is needed and when self-sufficiency is possible.

• What Are Managed Services?
• When Should You Use Managed Services?
• When Should You Opt For Self-Sufficient Infrastructure Management?
• How to Know If Your Managed Service Provider is Ripping You Off
• How to Get The Most Value Out Of Managed Services
• Canidium's Managed Services Offerings

What Are Managed Services?

Managed services describe the work of external specialists that organizations contract to maintain business applications and anticipate the need for system improvements. These third-party companies, known as managed services providers (MSPs), handle specific aspects of a business's IT infrastructure and/or end-user systems with a proactive approach. 

Managed service contracts are typically offered with either a subscription fee or on a time and materials (T&M) basis. While subscription based contracts offer the advantage of predictable billing, they also come with significant drawbacks. For example, they can be more expensive in the long run, especially if the service is underutilized. Fixed fees must be paid regardless of the actual usage or demand, which can lead to inefficiencies in cost management. At the same time, subscriptions lack the flexibility of a T&M contract. Scaling up or down your subscription based service is generally more costly and time-consuming than the alternative. 

On the other hand, the T&M model charges based on the actual time spent and materials used on a project, offering flexibility and transparency. Clients can adapt the scope of work as the project progresses, which is ideal for projects with variable requirements or where the full scope isn't clear at the outset. This model provides transparency in billing, as clients can see exactly what they are paying for, making it easier to adjust resources as needed.

To illustrate the concept of managed services, imagine owning a car you depend on for daily commuting and long road trips. Keeping your car running smoothly and avoiding breakdowns requires regular maintenance beyond your scope of expertise—oil changes, tire rotations, brake checks, and more. Rather than handling these tasks yourself or taking your car to the garage only when something breaks, you bring your car to a mechanic. The service provides regular maintenance and inspections from experts, allowing them to fix any issues before they lead to major repairs. With your investment in outside services, you get the assurance that your car is always in optimal condition, which extends its lifespan and enhances safety.

Similarly, with managed IT services, a business entrusts its IT operations to an MSP. The service provider proactively manages the company's IT systems, performing routine maintenance, monitoring system performance to preempt problems, and resolving issues as they arise. The goal is to prevent IT downtime or disasters that could interrupt business operations. Just like the auto maintenance subscription ensures your car is road-ready and less likely to leave you stranded, an MSP ensures that a business's IT infrastructure is robust, secure, and functioning efficiently at all times.

The Typical Core Competencies of Manage Service Providers

The scope of your service level agreement will define what your managed service provider will do for your organization. Your contract may be specific to your approach to operations. Some managed service providers oversee a wide range of tasks for organizations. In contrast, others take care of a narrower set of responsibilities. However, to give you a better understanding of the typical types of service offerings you can expect, here's a list of routine tasks MSPs often take care of:

Troubleshooting

Troubleshooting is a reactive service where your Managed Service Provider (MSP) swiftly addresses issues as they arise. Included in most service agreements, this incident response guarantees prompt attention to system failures, security breaches, or other malfunctions. The primary goal of troubleshooting is to reduce downtime and restore system functionality with minimal disruption, ensuring continuous operation and security for your business operations.

Making Improvements

This proactive service involves continuous assessment of the IT environment to identify areas for enhancement, whether it's upgrading software, optimizing network configurations, or enhancing security measures. MSPs often use the data gathered from regular monitoring to recommend and implement these improvements. This proactive approach not only keeps the systems up to date but also aligns IT operations more closely with the business's goals.

Consulting and Strategic Planning

Organizations can rely on managed service providers for expert advice on aligning IT strategies with business objectives. This often includes recommendations on new technologies, digital transformation initiatives, and optimization strategies to solve business challenges.

Compliance and Risk Management 

Organizations in heavily regulated sectors use managed services to ensure IT systems comply with relevant laws, policies, and regulations. This includes managing data privacy requirements, industry-specific regulations, and internal governance standards to mitigate risks.

Security Management

Besides regular security checks, MSPs often offer comprehensive security management, which includes developing security policies, conducting risk assessments, and providing training and support to ensure that all practices comply with industry standards and regulations.

When Should You Use Managed Services?

Between 2024 and 2029, managed services are predicted to grow at a CAGR of 7.9%. Clearly, more and more companies are opting for external help with digital maintenance and improvements. This increase is tied to the substantial benefits of outsourcing tasks to service providers. For example, working with a managed services provider can reduce your in-house IT costs by 40% while increasing efficiency by 50-60%. However, this does not mean that managed services are right for every company. 

Choosing between managed services and self-sufficient infrastructure management involves a detailed assessment of business needs, financial constraints, IT capabilities, and strategic objectives. Managed services might be the right choice for businesses that lack specific IT expertise, as these services provide access to professionals who can effectively manage IT systems. Simultaneously, MSPs can take on the burden of overseeing the long-term optimization of the system, eliminating the internal time and resource costs required to learn the intricacies of solution maintenance.

Managed services also enable businesses to concentrate on their core operations without the distraction of IT management tasks. For companies with variable demand, managed services offer the scalability to adjust IT resources as needed without significant upfront investment. This is crucial for maintaining efficiency during peak periods or scaling down to reduce costs when necessary. Furthermore, managed services often include enhanced security protocols and compliance measures, which are essential for businesses in industries such as healthcare, finance, and legal services where data protection regulations are stringent.

When Should You Opt For Self-Sufficient Infrastructure Management?

Conversely, self-sufficient infrastructure management is suitable for organizations that require granular control over their IT environments and those with the capability to manage complex systems internally. This might be the preferred approach for larger organizations or those in specialized industries requiring highly customized IT solutions. If a business has a competent IT department, self-management can be a viable option.

Companies that handle sensitive information or operate under strict regulatory oversight might find that managing their IT infrastructure in-house ensures better compliance with security standards and data handling regulations. Additionally, organizations that see IT as a strategic lever for innovation and competitive advantage often choose to manage their systems internally as they have more resources allocated in this business area.

Ultimately, the choice between managed services and self-sufficient infrastructure management should align with the your long-term strategic goals, operational needs, and the specific demands of the industry in which your organization operates.

How to Know If Your Managed Service Provider is Ripping You Off

Determining whether your Managed Service Provider (MSP) is delivering value or potentially overcharging can be challenging. Here are several indicators and steps you can take to assess whether your MSP might be ripping you off:

• Compare Costs and Services: Research what other providers charge for similar services. If your MSP's fees are significantly higher without a clear reason (like superior service or additional offerings), it might be a red flag. Alternatively, the disadvantages of subscription based contracts can be another red flag. They do not tailor costs to specific requirements like T&M alternatives, resulting in greater expenses and reduced value. Ensure the pricing structure is transparent and compare it with industry standards.
• Evaluate Service Level Agreements (SLAs): Review the SLAs to ensure they align with your business needs and industry benchmarks. Check if the MSP meets the agreed performance and response times. Frequent downtimes or delays that impact your business.
• Assess Communication and Support: Good-managed service providers maintain open lines of communication, regularly update you on your network status, and educate you about potential risks and improvements. If your provider is not transparent or is difficult to reach, it may suggest that they are not fully invested in your business's success.
• Review Technological Advancements: Technology evolves rapidly, and a reliable MSP should keep up-to-date with the latest innovations and security practices. If your provider uses outdated technologies that compromise efficiency or security, it might indicate negligence or an attempt to cut corners.
• Solicit Feedback from Other Customers: Speaking with other businesses that use the same MSP can provide insights into the provider's reliability and integrity. Look for reviews and testimonials to see if others have had negative experiences.
• Transparency in Billing: Ensure all charges are clearly stated and explained in your invoices. Any hidden fees or charges for standard services could be signs of dishonest billing practices.

By examining these areas, you can better understand whether your MSP is truly serving your needs or taking advantage of your business. If you suspect that your provider is not delivering value proportionate to its fees, it may be time to consider switching to a more transparent and reliable managed service provider. 

How to Get The Most Value Out Of Managed Services

To get the most value out of managed services, it's essential to begin by setting clear and measurable goals tailored to your specific needs, which should be included in your service level agreements. Understanding the full scope of services your Managed Service Provider offers is critical to avoid overpaying for unnecessary features and ensure that all necessary services are covered within the agreed-upon fees.

Strategic Planning

Regular strategic planning sessions with your MSP can help align their offerings with your business's long-term objectives, making the MSP an integral part of your team and not just an external service. This collaboration enhances their understanding of your business, which is crucial for tailoring their service to your needs. Make sure to fully utilize all the features and tools available through your MSP, and consider regular training for your staff to maximize these resources.

Reviews and Reporting

Establishing a routine for reviews and reporting with your MSP ensures ongoing oversight and accountability, allowing for service adjustments as your business evolves. Encouraging your MSP to manage your IT environment proactively can prevent many potential issues from arising, maintaining high system uptime and operational efficiency.

Security Management

Security and compliance should never be overlooked. Your MSP should provide robust measures to protect your data and ensure regulatory compliance. Regular security audits and updates should be part of your MSP's responsibility. Innovation should also be a continuous agenda item; ask your MSP to recommend new technologies and process improvements that could enhance business efficiency, such as cloud solutions, automation, and digital transformation initiatives.

Performance Metrics

Finally, using performance metrics to evaluate the MSP's effectiveness regularly will help ensure they continue to effectively meet your needs. These metrics should track user satisfaction, system uptime, and issue resolution times, pushing for continuous improvement in service quality. This comprehensive approach ensures that your managed services arrangement becomes a strategic asset that enhances productivity and supports your broader business objectives.

Canidium's Managed Services Offerings

Canidium's managed services offer a robust solution for businesses looking to offload the burden of software maintenance and optimization, enabling them to focus more on strategic growth and innovation. Here's an overview of how Canidium delivers value through its managed service offerings:

Expert Support and Maintenance

Canidium provides a dedicated team of experts committed to ensuring your software solutions operate without disruptions. This team's deep industry knowledge and technical expertise play a critical role in maintaining your systems' smooth and efficient operation, which minimizes downtime and enhances performance. Their proactive support helps anticipate issues before they arise, ensuring that potential problems are addressed swiftly and efficiently.

Scalability and Flexibility

With an understanding that business conditions can change rapidly, Canidium offers services that are designed to be flexible and scalable. This adaptability allows businesses to quickly adjust their resources to meet evolving needs, ensuring that software implementations remain aligned with business strategies even as market conditions shift. This responsiveness is crucial for maintaining continuity and achieving long-term goals.

Cost Efficiency

With Canidium's managed services, businesses can avoid the significant costs of hiring, training, and maintaining an in-house IT staff. By leveraging Canidium's external expertise, companies can reduce operational expenses while avoiding costly mistakes that often occur without specialized knowledge. This setup not only streamlines the implementation process but also proves to be more cost-effective over time.

Proactive Issue Prevention 

Canidium's approach to maintenance and support is distinctly proactive, focusing on preventing issues rather than reacting to them after they have occurred. This strategy includes regular monitoring and preemptive maintenance, which helps avoid the need for emergency fixes and ensures that the business's operations are not interrupted by unforeseen software issues. This allows companies to concentrate on innovating and exceeding their revenue goals without being bogged down by the technical challenges of software management.

A Comprehensive Understanding of Managed Services

Managed services provide a comprehensive framework for organizations to delegate essential IT operations to external specialists, ensuring that their business applications and infrastructure are maintained efficiently and effectively. These services cater to a broad array of business needs—from routine maintenance and system improvements to strategic planning and compliance management. For businesses lacking in-house IT expertise, managed services offer a valuable solution by allowing access to expert skills and technologies, which helps keep operations smooth and secure without the heavy lifting on their part. On the other hand, organizations that require close control over their IT due to regulatory demands or strategic needs may find more value in managing their infrastructure internally.

However, to ensure that an MSP is not overcharging or underdelivering, businesses should rigorously evaluate service level agreements, cost structures, and the MSP's capability to scale and respond to IT issues promptly. Transparent communication and regular performance reviews are crucial to align services with business goals and to make timely adjustments. Managed services should not just be about outsourcing IT tasks but should be a strategic partnership that fosters business growth, innovation, and continuous improvement. 

By strategically leveraging these services, companies can focus more on core activities and strategic growth while ensuring their IT infrastructure is robust, secure, and aligned with their long-term objectives.

To learn more, read this guide to managed services and flexible contracts.