Is it the right time to add managed services to your business portfolio?

light bulb box ideaStaffing firms seeking profitable growth opportunities may consider adding managed services to their offerings. This model, which involves outsourcing the management of a service to a dedicated provider, can result in stability and guaranteed output for clients. Most notably, it allows organizations to focus on core business activities while experts handle functions such as website development, help desk, payroll and marketing for a flat rate.

Assessing the Move to Managed Services

Providers can offer a variety of managed services to meet the diverse needs of their clients. And generally speaking, these services look to enhance efficiency, streamline operations and address specific project requirements.

Here are some of the managed services offerings and the roles providers can play for the organizations that partner with them:

  • Managed service provider (MSP): MSPs provide the interface, ticketing system, structure, service level agreements and the services listed under “Managed Services” below.
  • Managed services: Managing a service on behalf of a client typically includes hiring, training and managing entire teams. The providers of these services are responsible for managing the overall operation, including performance and the retention of resources. This approach often covers a broader range of ongoing operational functions and services, with the provider taking full responsibility for the end-to-end service delivery.
  • Managed delivery teams: When a provider offers managed delivery teams as a service, this also includes hiring, training and managing resources, but the team is dedicated to a client for a specific project or service. In this case, the focus is narrower, with the provider managing a particular aspect of the client’s needs. The service provider handles the workflow, escalation process, reporting and performance related to the specific project or service, rather than the overall operation.
  • Staff augmentation: Providers engage resources to help manage increased demand, special projects or specialized skills not available internally. In this arrangement, the client onboards the provider’s resources to perform assigned work and is responsible for managing the support operation, overseeing task management and the performance of resources.

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Transitioning to managed services involves a shift in strategy from individual staffing to a focus on entire team functions. The approach involves understanding the client’s entire setup and scrutinizing service quality, delivery efficiency and cost-effectiveness in order to tailor a finely tuned service and resource ecosystem to fit the client’s needs and goals.

Considerations for Managed Services

There are responsibilities and risks in managing a function for a company in a managed services capacity. Providers are 100% responsible for the client’s entire function, including liability, quality of work and the professional development of the team. But the provider has flexibility in how the work gets done. As long as service level agreements are being met, a provider can get creative in resourcing, structuring and delivering a function for a client. Unlike staffing, where the goal is to deliver talent for clients to hire or engage for a project, managed services focus on achieving a specific business outcome through a team of people without a provider-to-client handoff.

Success in managed services all but requires an entrepreneurial spirit — it’s about taking risks while thinking creatively and strategically. Balancing cash flow, optimizing bench resources, augmenting the strategic use of technology and hosting regular business reviews with clients are crucial for success in managed services.

Steve Kass

Steve Kass
Steve Kass is the chief revenue officer at Vaco Holdings.

Steve Kass

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