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Managed IT Services vs. Outsourcing: What’s The Difference?

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Every business needs to outsource operations at some point in time. Outsourcing is hard wired to take complete control of your operations and deliver results, so that you can focus on your core business. For example, BPOs, customer service, and many others. 

Managed IT Services (MSPs) in NYC is another ball game altogether. Many assume MSPs to be another name for technology outsourcing but it is not. 

In each case, business operations are outsourced to save money and/or receive technology capabilities not available in-house.

Some choose to leverage the benefits of technology leaders. These choose managed services as their partners. Outsourcing fails to add intelligence in the process. Outsourcing is like holding a stick to walk, whereas MSPs are your high tech prosthetics.

Managed IT Services vs Outsourcing

8 Differences Between MSPs & Outsourcing

1. Basic difference

Many feel that both MSP and outsourcing are one and the same thing. The answer is yes and no. The terms are used interchangeably in the industry. But the process is completely different for both.

When you partner with a provider for managed IT in NYC, for cloud functionality, the service provider manages your cloud for you without any expense of hiring talent or added resources of any sort.

Outsourcing means receiving services from a third party. They are not active participants in handling your cloud system. They just provide Software-as-a-Service (SaaS) but you have to take care of in-house cloud systems.

When you refer to receiving IT services from a third party organization, it means ‘outsourcing’. But when you sign a contract with a service provider to co-exist  it is known as ‘managed services’.

2. Is MSP a fancy way of saying outsourcing?

Since MSP got it’s stature in the industry, many prefer to call it a fancy way of outsourcing. For some, outsourcing is a nightmare. Semi-trained remote workers, lack in communication, efficiency,  and in-sight all come to mind. 

Are MSPs essentially the same, just dressed up differently?   

No. It’s true that MSPs and outsourcing both refer to hiring third party organizations. Tasks such as helpdesk, customer service, data entry, logistics, and much more require third party assistance. 

With outsourcing, you choose which services to run externally and help address specific business operations.

MSPs, on the other hand, take an intelligent route in providing technology solutions. Their largely skilled IT professionals provide a comprehensive set of technologies under many domains. Thus, you get better quality customer services, operational support and better end-user experience. 

3. Which is more comprehensive?

As we discussed in our previous pointer, MSPs choose to work intelligently with you to provide comprehensive services at your best.

Outsourcing gets your task done. MSPs, different from a simple outsourced vendor, help you get your task done efficiently, smoothly, and gain better results.

MSPs are always one step ahead of you. They help you select a plan that is in the best interest of your company. In fact, they help build a technology strategy that coincides with your company goals.

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4. In-house demands

Both have their own unique space. Your in-house requirements dictate what’s best for you. 

When you’re an owner of a small business organization, you need an IT service provider, then MSPs are the way to go.

Especially, when you can’t spend your resources for extra in-house skills to manage your IT infrastructure. MSPs don’t just help you solve a problem, they take active participation in monitoring your infrastructure, network operations, disaster scenarios, and cyber security.

5. What supports our economy?

Exchange rate between U.S. dollars and currency of foreign service providers determines the cost-effectiveness of outsourcing.

There are several factors that contribute to delegating IT services to a third party, particularly MSPs vs outsourcing, services involved, payment options (subscription or contractual), market conditions.

Once you explore your cost options, you may find that MSPs are more cost-effective and provide value for cents. Opportunities are better favored when you’re with an MSP.

Providing quality business to U.S. companies supports national growth and economy. Outsourcing can also benefit our economy but in a circuitous way.

As Computerworld points out, “It was U.S. technology — [especially] the boom in telephony and fiber optics — that directly contributed to the viability of offshore IT outsourcing.

It’s often American technology that renders services for outsourced organizations. Thus, the majority of money is driven back to our homeland.

6. MSP in action

Say your ERP system has gone live but is still in beta version. You employ your software to check for operational errors. Some employees fail to understand and use the features of the software.

They just go back to using excel spreadsheets, and third party tools that your new ERP software was meant to replace. 

An MSP will perform an assessment to know what troubles your employees are facing. It will study your suggested ROI and real-time challenges to provide practical solutions. They’ll determine if any hardware or software infrastructure components are compromised. 

Whether there’s any need to combine your existing ERP software to other business softwares. MSPs work to create custom solutions for you.

7. Who offers more control?

Businesses fear losing operational control to outsourced organizations. In our debate of local MSPs and outsourcing, the latter brings in more risk into the picture.

Service quality is at risk. There’s also end user service, business ethics, and IT competency to consider. 

Control is an illusion. To run a business successfully, one needs to work with quality partners and trusted advisors. MSPs promise you both.

8. What about long-term success?

Both outsourcing and MSPs offer different degrees of foresight. An outsourced vendor will only work as diligently as your next order.

They won’t chip in to consider a better working schedule or pattern that is in favor of business. They won’t ever tell you if there’s an efficient way to run your business.

On the other hand, MSPs genuinely want to see your operations expand and business flourish. They will take active part in planning and execution of activities in your favor. Especially, when these tasks hold a long-term benefit.

They focus on both, short-term and long-term goals.

Conclusion

If your business is looking to accomplish static tasks and operations, outsourcing is for you. While, if you’re looking for dynamic solutions, then a managed services provider is your best bet. 

You get an externalized customer service experience through outsourcing and a more internalized and personal helpdesk system through managed services. So, the choice is yours!

If you believe an MSP can benefit your organization, please call Xperteks on 212-206-6262 to clarify and we’ll help you with our best pricing on various packages.

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