Monthly Archives: April 2021

In today’s article, we will be discussing shared services vs. managed services.

Specifically, we will explore:

• What shared and managed services are
• What makes each model unique
• What makes them similar
• Why people usually confuse one with the other
• Which solution may suit your business the best

So if you’re looking to get actionable tips about shared and managed services, you’ll enjoy reading this article.

Let’s dive in.

What Is Shared Service Management?

Shared Services or Shared Service IT Management is a business model. It’s an umbrella term used to describe divisions (i.e. HR, IT, Finance, Administration) that merge or share various company assets and/or resources (processes, technology, strategies, practices, or teams).

Typically, teams within an organization perform similar tasks, especially when it comes to fulfilling internal and external service requests.

To complete these requests, teams have to work together and communicate. It also means there’s a lot of crossover:
For example, when ordering a laptop for a new staff member, the request will demand that IT, Finance, and Office Management work in tandem.

Shared IT Services best serve startups and small-to-medium businesses (SMBs), because of the increased flexibility.

Companies can improve efficiency across teams and divisions, while relying on limited resources to improve the speed of fulfilment and service experience.

What Is a Managed Services Model?

The Managed Services Business Model involves outsourcing a specific business function or process to an outside team or service provider. Once acquired, the third-party provider is responsible for maintaining those operations and anticipating the needs of the company in that department.

For example, many startups use the managed services model to acquire essential IT support (be it general IT managed services, or specific sub-processes such as cybersecurity).

The managed services delivery model empowers companies that lack the expertise, assets, or infrastructure to obtain them without investing in their development. Instead, it buys them as a service from a third-party provider.

So, what is a managed service?

In simple terms, it’s a type of advanced outsourcing where the provider assumes complete control and responsibility over those processes.

So what makes these business models unique?

Managed Services vs. Outsourcing

In IT, Outsourcing involves transferring tasks, processes, or entire product development projects to an outside company.

Typically, outsourced teams are contracted per job. They are external partners that rely on input from the company that hires them and oversees their work according to predefined strategies, milestones, and goals.

On the other hand, a managed service provider is much more independent. As experts, these companies have complete control over the operations they’re tasked with doing.

In a way, they become an extension of the company that assumes responsibility over daily tasks, while remaining autonomous in how they do it and lending their experience when defining the tasks themselves.

You can think of it like this: 
An outsource team is responsible for developing your company’s new app, while a managed IT service provider ensures the tech infrastructure can support the app across your systems once it’s done, as well as all other business operations. 

Shared Services vs. Outsourcing

Typically, shared services in IT and outsourcing don’t exclude one another. In fact, in most cases companies rely on a hybrid model.

To use the previous example:
A company may outsource its app development to an external team, while internal divisions work in tandem to oversee the project and provide them with the resources and input they need to develop the app.

Shared Services vs. Managed Services

Here’s where things get a little bit difficult. It’s also where all the confusion stems from, since most companies that have either of these models use them for tech-enabled services.

So, what are tech-enabled services?

Tech-enabled services is a term that describes several types of providers in IT:

• Infrastructure as a Service (IaaS)
• Platform as a Service (PaaS)
• Software as a Service (SaaS)

What’s the difference between tech-enabled services vs. managed services?

Managed services can be tech-enabled services, while they don’t necessarily have to follow a managed services model.

For example, if you buy a SaaS solution, you subscribe to use the software. The SaaS provider is responsible for maintaining the software, but not operating it.

With a managed IT service, the provider can use and subscribe to SaaS solutions and is also responsible for using them to complete operations it was hired for.

Now, we come to the main question from the beginning of this part: what’s the difference between shared and managed services?

The simple answer is: Shared Services aren’t fully outsourced services, while Managed Services are.

So, while you’ll use internal and external teams to develop and integrate the app (from the example we’ve used), a managed service provider will develop, integrate, maintain, and in most cases use the app (if it fits their role within your company).

So…

What Service Is Best for Your Business?

It depends.

In most cases, companies that already have a well-developed organization tend to use shared services.

On the other hand, startups and SMBs, but also large enterprises, use managed services if they lack the necessary elements to manage certain operations themselves, like IT, on a day to day basis.

And if you are one of these companies and you want to take advantage of a managed service provider, we can help you!

Demakis Technologies provides managed IT services, that includes other areas of expertise like cybersecurity, helpdesk support, and web design.
If you’d like to know more about what we can do for your business, please CONTACT US to get in touch with one of our professionals and get started today.