The comparison between managed services vs outsourcing has grown over the last few years. As different types of business arrangements constantly evolve, many ask if a managed service is just a narrower concept of outsourcing or a new breed of business model.
In this article, we explained thoroughly how managed services vs outsourcing differ, their benefits, and which best suits your rapidly growing business needs.
What Is Outsourcing?
Outsourcing is a business strategy that involves hiring an external service provider, specifically a business process outsourcing (BPO) company, to perform tasks, provide services, or manufacture products instead of doing them in-house. The objective of outsourcing is to save money, access specialized expertise or technology, or increase operational efficiency.
Some common examples of outsourcing include hiring a recruitment process outsourcing (RPO) firm to handle a company's payroll, partnering with a manufacturer in another country to produce goods, or working with a call center company to outsource customer service.
What Are the Major Benefits of Using Outsourcing?
Outsourcing offers several benefits for businesses, including:
1.Cost savings
Outsourcing can be a cost-effective way to get work done because it allows companies to take advantage of lower labor costs in other countries and access specialized expertise without having to hire full-time employees or maintain additional internal resources.
2.Increased Operational Efficiency
By outsourcing certain tasks or processes, a company can focus on its core competencies — which can often lead to better results and higher levels of operational efficiency.
3.Access to Specialized Expertise or Technology
Outsourcing allows companies to access specialized external expertise or technology that they may not have in-house. This can be particularly useful for companies that need to tap into specific knowledge or capabilities on a project-by-project basis.
4.Improved Flexibility and Scalability
Outsourcing can provide companies with increased flexibility and scalability because it allows them to easily ramp up or down their operations as needed. This can be particularly helpful for companies that experience fluctuating demand for their products or services.
5.Higher Customer Satisfaction
By outsourcing certain tasks or processes, companies can often improve the quality of their products or services, which can lead to higher levels of customer satisfaction.
What Are Managed Services?
Managed services refer to a business model in which a company provides a defined set of IT-related services to its clients on a proactive, ongoing basis. These outsourcing IT services may include everything from managing and maintaining a customer's IT infrastructure and applications, to providing expertise and technical support in areas such as cloud computing and cybersecurity.
The goal of outsourced managed IT services is to help businesses improve their operations and increase their efficiency by providing them with expert support and guidance in key areas of IT. This can help businesses save time, money, and resources while also enabling them to focus on their core competencies.
What Are the Major Benefits of Using Managed Services?
Partnering with a managed service provider offers significant advantages to businesses, including:
1.Improved Efficiency and Productivity
Managed service providers (MSPs) are experts in their field and can handle a wide range of IT tasks, allowing your in-house team to focus on more strategic, high-value projects.
2.Reduced Operating Costs
By outsourcing certain IT functions, you can save on labor and training costs, as well as avoid the need to invest in expensive equipment and software.
3.Enhanced Security
A managed service provider typically has the expertise and resources to implement and maintain strong security measures, helping to protect your organization from potential cyber threats.
4.Disaster Recovery and Business Continuity
Managed IT service providers can help you develop a comprehensive disaster recovery plan and provide the necessary tools and support to ensure your business stays up and running in the event of an unforeseen disaster.
5.Improved Compliance
Managed services providers can help ensure that your organization is compliant with industry regulations, helping to reduce the risk of fines and other penalties.
Managed Services vs Outsourcing: Which One Is Better for You?
Managed services vs outsourcing are often used interchangeably, but they actually refer to two different types of arrangements. Outsourcing involves transferring certain business functions or processes to an external provider, while managed services refer to the ongoing management and maintenance of those functions or processes by the provider.
In other words, outsourcing is a one-time arrangement in which a company contracts with an external provider to handle a specific task or function, such as customer support or product information management.
If you want to scale your operations during peak business seasons, outsourcing to a service provider is the best move. You can also scale down with outsourcing after peak periods.
On the other hand, unlike traditional outsourcing, managed services are ongoing, long-term arrangements in which the provider takes on a more proactive role in managing and maintaining certain functions or processes for the company.
This may include tasks such as monitoring and maintaining the company's IT infrastructure, providing ongoing technical support and maintenance, and implementing security measures. The managed services provider acts as an extension of the company's own IT team, offering expertise and support to help the company operate more efficiently.
Outsource Your Business Functions to KDCI Outsourcing
Are you planning to outsource some of your non-core business functions to a reliable service provider? You may consider partnering with KDCI Outsourcing.
KDCI Outsourcing, a leading outsourcing company that has collaborated with global companies for over 10 years, offers scalable staffing solutions in graphic design, digital marketing, accounting, and software development.
Experience our world-class outsourcing services and build the best offshore team in the Philippines.
Contact us to get a FREE consultation with one of our outsourcing experts!
