Managed Services vs. Outsourcing. How Do You Know the Difference?

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I’m sure by now you have heard the term “managed services” tossed around quite a bit.  It’s a powerful concept that will change the landscape in physical security, now more than ever.  But what exactly is it and how does it differ from outsourcing?

A true managed services model has key distinguishing components which significantly set it apart from the outsourcing model.  The quickest and easiest way to identify a physical security provider who offers true managed services is to ask 3 simple questions.

What is your process for handling tickets and alerts?

Understanding how support tickets and system alerts are triaged and resolved is a simple way to identify which type of model your service provider utilizes.  A managed services model relies on a framework of people, process and workflow automation built into their system to provide a consistent level of service.  This system will automate alerts based on severity, provide ticket prioritization based on issue type and deliver consistent service level agreements. Alternatively, outsourcing is a conventional one-to-one ratio model where you replace your headcount with the service providers resources at a markup.  A customer receives dedicated resources to handle all tickets and alerts however they will lack intimate knowledge of your environment or any outstanding issues. Without this knowledge, prioritization and resolution of issues can be prolonged and sometimes even further complicated.

What does the reporting structure look like?

How information is disseminated and reports are delivered is another revealing indicator of a true managed services provider.  Reports from a managed services provider are generated through automated technology on a defined and consistent schedule to provide transparency in real time.  With outsourcing, the dedicated resource generates reports on an ad-hoc basis for the customer.  Without the automation, it’s typical to see a lack in reporting consistency and regimen.

What does the pricing structure look like?

The most obvious line in the sand between managed services and outsourcing is when it comes to pricing.  Almost always, the managed services model boasts a lower cost solution with a higher level of service than outsourcing can.  The standard calculation for outsourcing takes the dedicated people + burden rate + margin (which typically ranges from 20%-30%).  Whereas the managed services model relies on technology, automation and a refined team without the need for dedicated resources for each customer which significantly reduces cost of service.

To wrap it all up.

There has been a lot of buzz in the industry about managed services but no clear language to differentiate the concept from outsourcing.  While at first glance it may seem the two are one in the same, given that they are both services that essentially allow a company to remove the internal burden of managing security, the managed services model is far greater in capabilities. It’s not just a service, but a powerful framework that’s redefining the security industry. Inquiring on the ticketing process, reporting structure and pricing can quickly clear the confusion and allow you to distinguish managed services from outsourcing.

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