The comparison between Managed Services vs Outsourcing has grown over the last few years. As different types of business arrangement constantly evolve everyday, many ask if managed services are just a narrower concept or outsourcing or a new breed of business model. 

In this article, we explained thoroughly how managed services vs outsourcing differ, their benefits, and which best suits your rapidly growing business needs:

What Is Outsourcing? 

Outsourcing is a business strategy that involves hiring another company or individual to perform tasks, provide services, or manufacture products instead of doing them in-house. The objective of outsourcing is to save money, access specialized expertise or technology, or increase efficiency. 

Some common examples of outsourcing include hiring a company to handle a company’s payroll, hiring a manufacturer in another country to produce goods, or hiring a call center to handle customer service.

What Are the Major Benefits of Using Outsourcing? 

There are several potential benefits of using outsourcing for a business, including: 

Cost savings

Outsourcing can be a cost-effective way to get work done because it allows companies to take advantage of lower labor costs in other countries or to access specialized expertise without having to hire full-time employees. 

Increased operational efficiency

By outsourcing certain tasks or processes, a company can focus on its core competencies and can often achieve better results and higher levels of efficiency. 

Access to specialized expertise or technology

Outsourcing allows companies to access specialized expertise or technology that they may not have in-house. This can be particularly useful for companies that need to tap into specific knowledge or capabilities on a project-by-project basis. 

Improved flexibility and scalability

Outsourcing can provide companies with increased flexibility and scalability because it allows them to easily ramp up or down their operations as needed. This can be particularly helpful for companies that experience fluctuating demand for their products or services. 

Higher customer satisfaction

By outsourcing certain tasks or processes, companies can often improve the quality of their products or services, which can lead to higher levels of customer satisfaction.

What Are Managed Services? 

Managed services are IT support services provided by a third-party vendor. The vendor is responsible for managing and maintaining the systems and infrastructure of a company, freeing up the company’s own IT staff to focus on other tasks. Some examples of managed services include cloud hosting, IT security, data backup and recovery, and technical support.

What Are the Major Benefits of Using Managed Services? 

There are several benefits to using managed services, including:

Improved efficiency and productivity

Managed service providers (MSPs) are experts in their field and can handle a wide range of IT tasks, allowing your in-house team to focus on more strategic, high-value projects. 

Reduced operating costs

By outsourcing certain IT functions, you can save on labor and training costs, as well as avoid the need to invest in expensive equipment and software. 

Enhanced security

MSPs typically have the expertise and resources to implement and maintain strong security measures, helping to protect your organization from potential cyber threats. 

Disaster recovery and business continuity

MSPs can help you develop a comprehensive disaster recovery plan and provide the necessary tools and support to ensure your business stays up and running in the event of an unforeseen disaster. 

Improved compliance

MSPs can help ensure that your organization is compliant with industry regulations, helping to reduce the risk of fines and other penalties.

Managed Services vs Outsourcing: Which One Is Better for You?

Managed services vs outsourcing are often used interchangeably, but they actually refer to two different types of arrangements. Outsourcing involves transferring certain business functions or processes to an external provider, while managed services refers to the ongoing management and maintenance of those functions or processes by the provider. 

In other words, outsourcing is a one-time arrangement in which a company contracts with an external provider to handle a specific task or function, such as customer support or product information management. If you want to ramp up your operations during peak business seasons, outsourcing to a service provider is the best move. You can also scale down with outsourcing during after peak periods. 

On the other hand, managed services are ongoing, long-term arrangements in which the provider takes on a more proactive role in managing and maintaining certain functions or processes for the company. 

This may include tasks such as monitoring and maintaining the company’s IT infrastructure, providing ongoing support and maintenance, and implementing security measures. The provider acts as an extension of the company’s own IT team, offering expertise and support to help the company operate more efficiently.

Outsource Your Business Functions to KDCI

Are you planning to outsource some of your non-core business functions to a reliable service provider? You may consider partnering with KDCI that has been operating for over ten years serving global companies. 

KDCI, an Ecommerce outsourcing company, offers scalable staffing solutions in the area of customer support, graphic design, digital marketing, accounting, and web development. We’ve worked with some of the top global brands in the world such as Apple, Dell, and Canon. Experience our world-class outsourcing services and build the best offshore team in the Philippines.

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