The Difference Between Outsourcing and Managed Services

When you come to think about it, what most businesses tend to lean towards is self-sufficiency. Unfortunately, world of modern business doesn’t work this way and more often than not you will be forced to look for help in different places. Some tasks, are simply too insignificant for your specific industry or too expensive to keep an in-house team for, which is why you will have to turn either to managed services or to outsourcing. Still, the subtle difference between these two notions eludes many.

Short versus Long-term

Even though some like to make different theories, the line between managed services and outsourcing is quite blurry at best. However, one of the most common denominators of outsourcing is that it is usually a short-term help, when your team cannot manage to do something on their own. On the other hand, people usually rely on managed services as a permanent solution to a particular minor problem, like hardware maintenance, or even more popular managed print services. All big printing companies offer managed services and what's best they can work with your already existing infrastructure. So, if you have HP, Lexmark or OKI devices, and choose Sharp as your managed print services provider, they will be able to supply you with okidata toner cartridges for example and even maintain your hardware with dedicated devices.

The payment method

Probably the greatest difference between outsourcing and managed services lies in payment method. Namely, when you make up your mind to go with managed services, you are always aware up-front what the total cost of the given service will be. Usually, there is some payment up front and then a monthly fee, but overall, there is an exact figure that you can deal with, which makes managing your business finances much easier. Finally, for this amount, you know exactly what you are going to get. As for the outsourcing, it usually depends on the deal that you make with the other company or individuals. More often than not however, performance pay is in question.

Natural evolution

Some even go as far as to claim that the line between outsourcing and managed services is so blurry because one stems from another. In other words, while outsourcing appeared in the late 1980s, it was not until recently that a term managed services got its entry into the business world dictionary. Additionally, while managed services most often (but not exclusively) dabble in cloud services, outsourcing, has quite a lot under its umbrella. In fact, the very notion outsourcing can stand for every single business relevant task that is not dealt with “in-house.”

Management versus deployment

In the end, perhaps the key difference between these two is that managed services are more concerned with management of appointed task by using adequate people, processes and tools. On the other hand, outsourcing is usually focused on more efficient deployment of work. If for example, a company can get higher quality of service or cheaper and more skilled workforce, they will outsource their business there and watch their profits plummet.

As you can see, both outsourcing and managed services have their spots in the modern business world. Although they are different, it would be absurd to discuss which one is “better.” True, they deal differently with different tasks, but this more often than not comes down to a personal preference and your specific need. The difference between them may be subtle, but sometimes it is all that it takes.

Views: 2107


You need to be a member of Small Business Bonfire to add comments!

Join Small Business Bonfire

About the Small Business Bonfire

The Small Business Bonfire is a social, educational and collaborative community founded in 2011 for entrepreneurs that provides actionable tips and tools through a small business blog, a weekly newsletter and a free online community.

Subscribe to Our Newsletter


© 2019   Created by Alyssa Gregory.   Powered by

Badges  |  Report an Issue  |  Terms of Service