Deciding Between a Shared Services Model and Managed Services Model

November 17, 2021 - by Synoptek

Share Button

Outsourcing IT to a team of experienced and competent IT resources is probably one of the best ways to focus on driving your business forward – without getting caught up in the day-to-day management of complex IT systems. But when it comes to choosing the right outsourcing model, the choice isn’t easy. Given the various outsourcing models present in the market today, it takes deep understanding and careful planning to choose a model that’s best for your business. In this blog, we will delve into shared services and managed services models and cover the similarities and differences between them.

What is a Shared Services Model?

In the world of IT outsourcing, a shared services model is one which allows you to leverage a specially-crafted business unit of expert IT resources to manage the IT tools and systems you use on a daily basis. Since it is a separate business unit that is created to deliver a variety of IT services, it allows the resources of each division to solely focus on supporting the overall goals – and not worry about the daily management of IT.

There are a number of benefits that a shared services model offers including centralized back-office operations, better cost efficiency, improved IT decision-making, enhanced scalability, and the freedom to focus on the core business purpose.

What is a Managed Services Model?

A managed services model is one where a qualified IT service provider manages your IT infrastructure and/or end-user systems. Also known as a fully outsourced model, this model usually covers all IT functions: right from enterprise application support to workforce productivity, cybersecurity, analytics and reporting, product development services etc. In a managed services model, all technology decisions are taken by the provider, and services are generally offered via subscription, pay-per-use model.

Benefits that a managed services model offer include efficient management of IT systems, enhanced risk management, predictable costs, and the ability to focus on your core business strategies and goals.

Comparing a Shared Services Model to a Managed Services Model

Although both shared services and managed services deliver core IT capabilities for better management of critical IT systems, the two models are also different in many ways. Let’s look at a detailed:

1. Nature of Your Business

If you are a tech organization, it is highly likely that you have the tools and skillset needed to efficiently manage and support your IT systems. In that case, a shared services model can deliver the capabilities you need to drive your business forward. But if you are a retailer or healthcare organization, engaging with a provider via a managed services model can open doors to unmatched skills and capabilities to efficiently run your business.

2. Level of In-house Expertise

A shared services model works better if the level of expertise of your in-house IT team is high. If you are confident in your team’s ability to cater to your business needs, you should opt for a shared services model. But if you are struggling to meet your goals due to a shortage of the right skills and experience, outsourcing these skills to a managed services provider is a far better idea.

3. Response Time

If your business users or customers expect extremely quick responses for their issues and queries, with a shared services model, you might have to settle for slower response times. Since your internal IT team members are likely to have many responsibilities on their shoulders, they won’t be able to dedicate all their time to responding to or resolving issues. On the other hand, if you outsource your IT to a managed services provider, you can enjoy extremely fast response times and pave the way for higher employee productivity and increased customer satisfaction – all at once.

4. Scalability

For businesses that have limited scalability requirements, a shared services model can be adequate to meet current (and future) business needs. But for those that need to scale quickly and frequently, enduring the long process of hiring, training, and retaining new resources can get extremely overwhelming. In such situations, having a managed services provider provide on-demand access to experienced and qualified resources – whenever and wherever you need them – can help you meet your scalability demands with ease.

5. 24×7 Support

When it comes to requiring 24×7 support, a shared services model can only offer a certain level of support. Because your in-house IT team has other priorities, and is usually based in the same time zone as your business, achieving uninterrupted support is not exactly possible. With a managed services model, however, you can receive round-the-clock support. Irrespective of whether you face issues during or after business hours, a managed services provider can resolve them in time – while also making necessary changes, so you don’t encounter the issue again in the future.

Choosing the Right Model and Partner

If you want to successfully drive digital transformation, you need to outsource the complexity of day-to-day IT managed by qualified and experienced resources: you can either allow your in-house IT team to take care of your IT needs or engage with a mature managed services provider to get end-to-end support for your IT infrastructure. The IT services model that you opt for depends on a number of factors: from the nature of your business to the level of in-house expertise, the response time you need to your scalability requirement, and 24×7 support. Make sure you carefully carry out a detailed assessment of your IT requirements before you choose the right model.