Shared Services vs Managed Services: What’s the Difference?

May 08, 2019

What kind of services does your company need? The answer might depend on several factors. These may include the size of your company, the skills of your employees and the skill gap you’re trying to fill, cost constraints or the overall business goals you have.

When we further dissect it, typically, a company has two choices when it comes to information technology (IT) service types: shared services and managed IT services. So, what is shared services? What are managed services? And what is the difference between the two? In this article, we discuss.

What are Shared Services?

Shared services is usually referred to a business model that helps leverage most-used resources across different departments in an organization. This is typically done by identifying and noting most used and critical services. These services are then pumped with resources and funding and divided into requirements for each individual department. Essentially, shared services lead to the formation of internal service provider departments. They help ‘share’ the resources with the rest of the company. These internal service providers are also responsible for achieving KPIs, keeping cost in check, and assuring quality services.

What are Managed Services?  

Managed IT services usually refers to outsourcing of various IT functions to a third-party contractor. In a managed services business model, the managed service provider (MSP) is responsible for all the technology decisions, in alignment with pre-decided business goals by you. An MSP usually works in remote arrangements to monitor and manage a client’s IT infrastructure (servers, machines, mobile devices) or end-user applications using SaaS or PaaS models.

Managed Services vs Shared Services: Which to Use? 

Depending on the kind of industry you work in, the kind of work you need, your size, your scaling plans, etc., you might choose either managed services or shared services based on your needs. Here, we list a few key considerations to keep in mind when evaluating shared services and managed services options for your company.

  1. What level of maturity are your internal processes? If your standardization processes and documentation are not in order you might want to take the MSP route. MSPs can put essential tracking and reporting processes in place to drive standardization for low maturity organizations.
  2. How complex are your process interactions? Basic transactions are easier to outsource, while complex and unique functions are better kept in-house. However, if your internal staff do not hold sufficient expertise to customize your service delivery or applications, you might want to consider a hybrid model with an MSP where managed service expert teams work in tandem with your internal staff.
  3. How many people do you need? Traditionally, a company finds itself at a key growth phase when they reach 100 full-time employee strength. Depending on the complexity of the project and manpower required, you can choose your service provider.
  4. What are the geographic bounds of your work? Often, many companies perform identical functions across multiple sites without any strong documentation or process standardization. Knowingly or unknowingly these arrangements drain your company out of cash. Most managed services are delivered remotely and also contain back-up provisions. These along with compliance with legal requirements laid out for operating in various continents and countries might make outsourcing your IT a better option.
  5. What are your existing and future requirements? Investing in technology and infrastructure is one of the key considerations for a company looking to scale. Shared services can deliver cost benefits for smaller operations easier. While, maintaining and upgrading applications and infrastructure for multi-national operations through an MNC service provider can be easier to scale. 

If you feel like managed IT services can be of benefit to your company over shared services, take our FREE Consultation today! As an MNC managed IT service provider, ProV managed services help streamline your IT departments and increase overall efficiency for internal processes that boost your bottom-line.

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Topics: Managed Services, it managed services providers, benefits of managed IT services, managed IT, ProV, shared services vs managed services