Managed Services to counter the shortage of manpower | SITS
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Managed Services to counter the shortage of manpower
Outsourcing versus managed services: These are the differences. This is how companies free up resources and strengthen the security of their IT.
3 minutes
April 10, 2024

The spectre of a shortage of skilled workers is looming. The baby boomer generation, which makes up the majority of today’s workforce, will soon reach their retirement age. In addition, there are a number of challenges arising with hybrid work, AI, cloud migrations, half a dozen new compliance guidelines and new threats that are causing companies in a wide range of industries to run out of skilled workers. According to the industry association Bitkom, there are currently around 149,000 vacancies for IT experts just in Germany. “Too few skilled workers and too much regulation are slowing down digital Germany,” warns Bitkom President Dr. Ralf Wintergerst in this context. Companies that are short of employees must therefore take urgent action. Managed services are one option to compensate for the lack of knowledge and manpower in their own ranks.

From MSPs and outsourced processes: what managed services offer

But what exactly are managed services? Managed services is the outsourcing of defined IT functions, recurring IT services and processes to an external body. This is called a Managed Services Provider, or MSP for short. Such services are usually provided and managed remotely, allowing companies to hand over responsibility for certain aspects of their IT operations to external experts. However, there is also the option of providing in-house premises.

Managed services can cover a wide range of IT functions. Examples include infrastructure management, network monitoring, security measures, data backup and recovery, application hosting and technical support. In this process, companies make cost-effective and efficient use of external expertise, improve their own IT capabilities and optimize their performance. But that’s not all, as managed services also help to reduce the time and effort involved in managing complex IT environments in-house.

Managed Services advantages and opportunities at a glance:

  • Predictable spending: Managed services are usually offered as a subscription, allowing companies to better predict and budget IT expenditure. Instead of high upfront costs for IT and staff, they pay a recurring fee – and only pay for the services that are actually needed.
  • Improved security and compliance: MSPs are inherently designed for compliance and protect sensitive data and systems from cyber threats and compliance breaches.
  • Focus on core business: By outsourcing routine IT tasks and responsibilities to an MSP, companies can simply let their IT teams catch a breath and focus on their core business, tackle innovation and simply be more productive.
  • Proactive monitoring and maintenance: MSPs continuously monitor the performance and condition of IT systems and infrastructures – either at specific times (9 to 5) or 24/7, depending on the model. They proactively detect vulnerabilities and minimize operational downtime.
  • Expert know-how: MSPs operate teams of qualified experts who have specialist knowledge in various IT areas, including networks, cyber security, cloud computing and application development – knowledge that can only be purchased internally at great expense through training and recruiting experts.
  • Flexibility: Managed services are designed to scale easily with operations. Regardless of whether operations are expanded, new users are added or new technologies are introduced: Companies can easily expand their Managed Services at any time.

Managed Services versus Outsourcing

Outsourcing IT tasks is popular: turnover in the IT outsourcing market is expected to be around 147.6 billion euros in 2024. But how do managed services differ from traditional outsourcing? First of all, managed services are also outsourced – so there is a conceptual overlap here: With managed services, the service provider assumes responsibility for certain tasks and services, often with a higher degree of autonomy. The customer concentrates on its core business activities, while the service provider takes over the administration and maintenance of the services.

In classic outsourcing, on the other hand, certain business processes or functions are outsourced to an external service provider. The service provider carries out these tasks on behalf of the customer, but the customer usually retains a certain amount of control and responsibility. As only certain sub-departments and IT services go to the service provider, the IT remains in the customer’s company. The customer therefore continues to have the final control over its infrastructure, IT structure and processes. The IT services to be provided are precisely defined in advance and must be provided regularly on the basis of service level agreements (SLAs).

  • Managed services can be very specifically tailored to individual needs, as they are often smaller in scale.
  • Managed services can be more cost-effective as only what is needed is purchased.

Managed Services Provider vs. traditional IT service Provider: Here's what matters

The main difference between a managed service provider and a traditional IT service provider is their service model, the responsibilities and scope of the services provided and the nature of the relationship with the customer.

Managed Service Provider   Traditional IT Service Provider
 

Services based on a subscription-based model:

customers usually pay a regular fee for the services provided, which are based on a service level agreement (SLA). MSPs assume responsibility for the management and maintenance of certain IT functions and systems for their customers.

   

Services on request:

invoicing usually on an hourly basis or project-oriented. Customers commission the service provider for specific projects, problem solutions or consulting services, and billing is based on the service provided.

 

Long-term partnership:

MSP offers continuous support and consulting over a longer period of time. The service provider also works closely with its customers to continuously improve IT infrastructure and services.

   

Engage in specific projects or tasks:

Services may be limited in time. Once the project is completed, the collaboration usually ends unless there are further requirements or projects.

 

Management and operation of specific IT services:

Examples include network monitoring, security management, data backup, cloud hosting etc.. The MSP acts as an extension of the company and takes over the day-to-day operational tasks.

   

Comprehensive services:

Solutions for specific technical problems or projects. This can include the development of a customized software application, the provision of hardware and software or the performance of an IT infrastructure review.

The question is: What is suitable for which company or which requirement? Is it better to choose an MSP or a traditional IT service provider? The definition and requirements are decisive here. In general, the following applies: if there are very specific requirements, for example for products or tasks, the managed service is the appropriate choice. If full support is required or if it concerns content that is mapped by entire departments, classic outsourcing via an IT service provider is the preferred option.

How can Managed Services help to counter the shortage of manpower?

Managed services therefore offer many advantages and, due to their flexibility, are a good way to combat the shortage of skilled workers. One reason for this is that outsourcing IT tasks can help to better utilize existing talent, as not everyone needs to have all their specialists in-house.

Managed services also allow:

  • tackle time-critical issues more quickly
  • outsource time-consuming tasks, such as log analysis or documentation, in order to relieve in-house staff
  • minimize dependency on specialist knowledge in the sense of “brain drain”, as specialist expertise is outsourced

Some companies struggle to ensure compliance with industry regulations and security standards due to limited resources and expertise. Managed services can provide valuable support when it comes to compliance – especially in times of increasing skills shortages. This can help avoid costly regulatory fines and penalties associated with non-compliance. In addition, managed security services often include advanced threat detection and response capabilities such as Security Information and Event Management (SIEM), Intrusion Detection and Prevention Systems (IDPS) and Threat Intelligence Analysis. With such technologies, emerging threats are detected and averted more effectively than with the sole use of internal resources. When there is a shortage of staff, the expertise and experience of MSPs is worth its weight in gold to improve security and overcome complex technical challenges.

By working with experienced MSPs and MSSPs, such as the experts at SITS, organizations strengthen their IT security, increase operational efficiency and reduce the risks associated with the ever-evolving threat landscape.

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