A managed IT service is an information technology (IT) task provided by a third-party contractor and delivered to a customer.

In a managed service arrangement, the managed service provider retains responsibility for the functionality of the IT service and equipment, and the customer typically pays a monthly fee for receipt of the service. There are many different types of managed IT service offerings. Still, the idea behind all of them is to transfer the burden of maintaining IT from the customer to a service provider. In an effective managed services relationship, a customer benefits from predictable pricing and the ability to focus on core business concerns rather than IT management chores.

Managed IT services allow businesses to delegate their IT operations to an expert third-party organisation that specialises in handling these responsibilities. These third-party organisations, known as Managed Service Providers (MSPs), are responsible for the entirety or portions of a business’ IT systems, as agreed upon in a Service Level Agreement (SLA). The client typically procures IT equipment and depending on the SLA, and Managed Service Providers may provide round-the-clock monitoring, issue resolution and reporting, and more.

According to the SLA, managed service providers charge a flat fee for delivery of their services over a set period of time. The SLA defines exactly what services will be furnished and the degree they will be offered, as well as metrics for measuring the success of these services.

Cloud computing has allowed managed IT services to expand beyond the regions and borders that would constrain the average break/fix IT through the adoption of Software as a Service (SaaS) technologies, as well as Infrastructure as a Service (IaaS) and Platform as a Service(PaaS) also. These capabilities allow managed IT services to scale at a rate dramatically larger and faster than in-house IT operation or break/fix providers.

It is now a common trend in the enterprise world to undergo a digital transformation doctrine, whereby old and onsite hardware and infrastructure get replaced with digital systems and services.

But moving from old to new systems and IT operations can be a daunting task. There are numerous advantages but it to get the most out of digital transformation, IT leader and teams need to have a very careful and considered approach, which can be time-consuming and require a lot of ongoing work post-transformation.

This is why managed services have ballooned in popularity, with some two-thirds of businesses now partnered with at least one managed service provider. Such external firms can work with the client enterprise to ensure their new digital services and infrastructure are running smoothly and effectively for their business operations.

The overall idea is that a managed service provider takes care of all the maintenance and day-to-day running of such systems and services, freeing up tome for an in-house IT team to explore new ways in which technology can benefit a company’s daily operations and potentially boost its bottom line.

It aligns the outcomes of the organisation. An IT company is incentivised to do an excellent job; they want to minimise problems for your organisation because they have KPIs directly linked to the efficiency of your IT.

IT experts give you peace of mind. You’re not an IT expert. Managed service providers take care of your IT, so you can focus on running your business.

Proactive support. Managed services offer proactive support. So instead of your IT firm constantly fixing problems, they will actually try to identify problems before they happen, keeping your systems up and your problems down.

Strategic IT planning. What IT systems do you need in 12 or 24 months’ time? Managed services help you think ahead and give you advice on what you need to be planning from an IT department. This links to proactive support and ensures that your IT infrastructure and software is upgraded and updated to minimise risks such as downtime, viruses and crashes.

Complete outsourced IT. Managed services give you access to a complete IT department. You don’t just get day-to-day IT support; you also get an IT manager and a virtual CIO so you can think strategically about how IT fits into your organisation.

What is the history of managed IT services?

At the outset of enterprise computing, information technology services and management was on a break/fix basis, meaning that computer systems were only managed by an expert when they did not work, necessitating a technician to fix it. This technician may also have been the person who built and/or installed the computer system, due to the proliferation of small IT shops that specialised in this small-scale client services at the time.

However, as time progressed, computer manufacturing grew to large scale, leaving the small IT dealer to focus less on manufacturing and more on break/fix. This system was time-consuming, labour intensive, costly and reactive. It did not allow the technician room to grow their business or take on new clients without massive investments in labour and infrastructure.

As computing devices increased yearly, the divide between break/fix technicians and the number of computers they could reasonably service under the break/fix model grew wider and wider. Managed IT services emerged in the early years of the millennium to meet this need, shifting far from the break/fix model.

Managed IT services heralded a proactive approach to IT, attempting to conduct maintenance, upgrades, system monitoring and issue resolution on a routine basis, with the goal of preventing problems before they started. Automation, increased Internet capabilities and cloud computing allowed for monitoring and issue resolution to be provided remotely, enabling more efficient processes and a consolidation of resources.

Efficiency, consolidated resources and client satisfaction, coupled with fixed rates, the ability to offer more excellent service offerings and take on a more extensive clientele led to managed IT services becoming the industry-standard approach to managing computer systems large and small for SMBs.

Managed Services began with Fortune 500 companies and their huge networks

At the same time, the hardware and software vendors were adding new and better ways for the systems to signal problems as early as possible. Simple Network Management Protocol had been developing since the early ’90s and was being applied to PCs. The first systems that could watch these tools and turn all the data into usable information were complex to manage, were geared only to large networks, and were prohibitively expensive for small business.

In 2005, systems started to mature that allowed smaller companies to take advantage of the same features and benefits as the large companies. This technology started the Managed Services movement.

The Managed Services software that is in place today allows providers to work towards two major goals:

Everything on your network that will result in a user symptom or risk will send an alert before or when it happens, and the Managed Service Provider will know about it.

Every alert they get is something important and needs to be addressed.

The more closely a Managed Service provider can get to these two goals, the more perfectly they can achieve a truly managed service and the more they can get away from “everything being an emergency” situation.

What is the break-fix mentality?

The companies who have helped service small networks in the past have been hamstrung by the lack of tools to help with the problem. The networks they service developed as simple systems, usually built by a self-taught network amateur-turned-pro. Maintenance was break-fix only, meaning when something broke, the company called, and they came running to fix it hopefully.

As time went on, the best of the support people developed procedures and programs to periodically come onsite to do a system review of logs and user information looking for hints of issues before they become big problems. In some cases, an elaborate checklist was used to record disk usage, processor usage, etc.

The problem, of course, was that the support people could only see what was happening on that particular day. If something happened later, they would never know about it unless the customer called.

Why the hype with Managed Services?

Just like larger companies, small businesses need technology to operate efficiently and to compete effectively. But as reliance on IT grows, the resources required to support this increasingly complex IT environment may not. In many small businesses, IT resources are limited and can be quickly overwhelmed.

If you fall behind in keeping up with things such as backups, patches and security, the odds greatly increase that you’ll face an IT outage or another problem down the road that will negatively impact your business. For instance, if your Email server, customer relationship management system, financial application or network goes down, you will likely face substantial productivity and revenue losses as a result.

How does Managed Services differ from the Break-Fix Mentality?

Managed services are also a philosophical change in the way that a business deals with its technology. Instead of following the old-school tradition of break-fix (literally meaning wait until the server, desktops or other critical networking devices fail, then scramble to fix them), a business operating with a managed service focuses on the prevention of these issues before they disrupt employees, management and/or clients.

Why Break-fix is no longer good enough for your business?

A Break-fix maintenance service fixes problems as they crop up. This means that something needs to go wrong before you receive any service, resulting in an inevitable reduction in IT system performance while you wait for the problem to be fixed.

Today, no business can really afford the risk and uncertainty of relying on a “Break-fix maintenance service” because your business is too dependent on having a reliable IT system. Furthermore, having separate suppliers responsible for different parts of the system puts you in the difficult position of trying to decide who should be delivering the service you require. You simply do not have time for this.

What are the categories of Managed Services offers?

If you look underneath the umbrella concept of managed services, you’ll find several major categories or offer groupings.

Monitor

I sometimes call this offer “monitor and notification,” and it’s usually the first entry point for companies into the broader world of managed services. This is where the customer has purchased your technology and some support services, but is experiencing some level of pain from operating these solutions and therefore needs a bit of help. The managed services provider (MSP) monitors those technology solutions for them, notifying them of any issues affecting the performance of that solution, which they then bring to the attention of the customer. The customer is still ultimately responsible for the operation of the technology in this instance, and it’s up to them to fix things when they go wrong.

Operate

This offer takes “monitor” to the next level, where a customer might still be having trouble addressing all of the issues brought to their attention and therefore hands over the keys of all operations to the managed services provider. For MSPs who are operating the solution for the customer, I would like to underscore the importance of leveraging the Information Technology Infrastructure Library (ITIL) framework. ITIL is a set of thoroughly defined, best-in-class processes for operating technology.

ITIL was started in the 1980s by the CCTA, a government agency in Great Britain, because of the lack of quality and consistency in services procured by the British government. It is now globally recognised as the defacto-standard of best practices in IT Service Management (ITSM). Simply put, it is the preferred “language” of IT operation by customers and managed service providers. ITIL is comprised of standard service catalogues containing foundational capabilities such as incident management, problem management, configuration management, change management, release management, and more.

Optimise

Today’s technology solutions are constantly evolving and therefore require continual performance tuning and optimisation. Historically, optimisation services were professional services (PS) offers where the PS org would go into a customer’s technology environment, assess their current operations, look for performance and configuration issues, make recommendations and changes, and ultimately turn operations back over to the customer.

Due to today’s living, breathing, and constantly evolving application-centric, network-dependent environments, it is crucial to perform these optimisation services constantly. As a result, many MSPs have converted their “one-time” PS optimisation services into annuity-based, recurring optimisation services that can easily be layered on top of the “Operate” offer.

Transform

Once you’re in the customer environment caring for their solutions and optimising them, this is a great opportunity to turn this agreement into an ongoing service you provide. In this category, you become the trusted advisor for the customer when it comes to their technical demands and can help get them on board with next-generation solutions. More often than not, we see these next-generation solutions turning into cloud or subscription offerings, which brings us to our final category of managed services offers.

Managed XaaS/Cloud

Once your customer starts leaning towards next-generation solutions, they’re likely also moving towards a new consumption model. Our research has shown that percentage of overall managed services revenue has been doubling over the last couple of years, to where 26% of all managed services revenue comes from managed XaaS/cloud offers. Clearly, this is a massive growth area for managed services! If you’re already in the customer’s operating environment optimising their solutions and transforming them into a new solution, this is a good way to lock them in and have a customer for life.

What are challenges of Managed IT Services may encounter?

Here are some challenges that you need to be aware of when looking to move to a managed services arrangement.

You were holding providers accountable. The reason you go with managed services is that you want to improve your operational efficiency and remove the amount of IT problems or roadblocks that affect your team. You need to hold providers accountable and make sure they are delivering these improvements. Most providers will offer effective reporting so you can see exactly how much work they are doing for you and how much improvement in efficiency and productivity they are providing.

You were getting strategic IT planning. As part of a managed service contract, you should be given some strategic IT planning. You might struggle to see the benefits of a managed services contract if you don’t get this component. Make sure that your IT firm is proactively planning for the next 12 or 24 months and that it has strategies in place to improve IT infrastructure and upgrade Software.

They were finding a provider with a good track record. You need to check the track record of your provider before engaging in a contract. They should be able to demonstrate a track record on delivering proactive service and measurable outcomes. Check references before you commit, and ask what clients they have, and if they have experience dealing with companies similar to yours.

What are the possible problems and errors may occur?

Additionally, the only professional test of the backup system was on the visit, which frequently resulted in days or more of missed backups. The system was prone to other human errors when the onsite technician, trying to be accommodating, would take care of the “end-user” symptoms and would not have time to address the “real issues”. This created a constant battle for the tech as they tried to convince customers that they were only causing themselves more dangerous problems down the road by not being proactive.

What to look for in Managed IT Services?

Keep in mind that a great managed IT services provider is really your business partner. Just like any other partnership, you want a managed IT services company who helps you identify how IT can be used to achieve your company’s overall business goals.

Look for a partner who cares just as much about your success, as they do about their own.

If we could give you the top five services you should look for in a managed IT services company, these would be them:

Proactive support – Continual monitoring enables a managed IT company to fix small issues before they blossom into huge ones, as well as provide regular maintenance of Software and hardware.

Data security – Nip any security issues in the bud, before they’re ever able to affect your company files and data, by using a secure firewall, servers, malware, and anti-virus protection.

Data backup – Daily (even hourly when required) backup to multiple locations is a huge piece of disaster recovery strategy that you’ll be glad your business has in place, for those unexpected events that could hit your business.

Vendor management – You, your employees, and your customers will all get peace of mind when you can monitor your contracts; ensuring all deliverables are met.

Onsite support – 97.5% of technology issues are fixed remotely, and the downtime of your company can significantly decrease by having a monitoring system in place, to address the problems before you’re even made aware of them.

Virtual CIO (vCIO) – Planning for the future and continual monitoring ensures your company can take advantage of current IT best practices and how to reach your individualised business goals.

Ask yourself this – are your technology needs being met? Is your in-house IT department (or IT guy) spending too much time troubleshooting network connectivity, patching and updating virus protection, struggling to include security for mobile devices like smartphones?

Are you paying monthly for unexpected IT break-fix services and blowing an unexpected hole in your budget?

Do you feel confident that you have a plan to grow your IT infrastructure as your business grows?

If you are a control freak, this may not be for you. Giving up control to a third-party of the heartbeat of your organisation (your IT) may make you a little squeamish, but the benefits can provide you with that much-needed heartburn relief.

If your answers to any of these questions left you slightly uneasy, a network assessment could start the process of seeing if managed IT services is a good fit for your needs.

What things to keep in your mind about managed service providers?

Managed Service Providers bring not only practical delivery of a predictable service model and cost to quickly and effectively deliver new IT service to an enterprise, but also enhance the stability and peace of mind for IT and business leaders alike.

The task of delivering new business services to the enterprise while keeping costs controlled is a difficult task in the modern business environment. A managed service is a great strategy to help your IT organisation be highly resilient, and cost predictable, fiscal year to fiscal year. MSPs complement and do not replace existing staff but rather free those valuable resources to lead and deliver on the strategic IT programs necessary to advance business goals. In larger organisations, an MSP will help your resources to focus on more strategic projects. You can rest assured that your company is minimising the risks associated with maintaining client data and sensitive competitive information and more with today’s managed service offerings.

What is managed IT?