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Managed Services Vs Outsourcing

A Quick Insight into Differences between Managed Services and Outsourcing

The constant onslaught of uncertainties in the business domain has increased costs and skill gaps in different companies. Different businesses are looking for ways to reduce costs and reimagine the hiring process and ensure that the workforce is equipped to deal with any projects handed to them. Building effective teams are about shared skills and responsibilities. Two methods to augment the workforce have been used by organizations in India. But most professionals use the term ‘managed services’ and ‘outsourcing’ interchangeably without knowing the benefits and disadvantages that it might have on the company. Both are great options for getting skills on a short-term basis to tackle a new and challenging project. However, it is up to the company environment, values, and objectives that impact how the services will benefit the organization.

Differences Between Managed Services and Outsourcing

Outsourcing is a process by which an organization delegates a plan for an existing business to an outside company. The external company helps in completing the task using their existing skill base. This process can reduce the use of equipment, technology, and costs, allowing your company to focus on other activities. Outsourcing is mainly associated with short-term and narrow projects, while organizations must be more effective regarding larger and more creative strategies.

On the other hand, managed services refer to the hiring of outside agencies or companies for more established and knowledge-based support. These tasks have broad strategies and will need to have a holistic approach. Payment to these companies is based on subscription; for instance, a task related to the IT department can be outsourced where the outsourcing company will do specific work. However, managed services will not only take care of the task but will manage the whole department, including the workers. An outsourcing company wants to provide the service for that specific task which might be a minor part of a larger project. They are not interested in the company but rather in their particular service. While a managed service provider is concerned about the company’s future and focuses on organizational success.

Managed Services Vs Outsourcing

Managed Services Vs Outsourcing

Managed services Vs Outsourcing is really about the needs of your company. If you need somebody to take care of the whole infrastructure, then it is managed services, while outsourcing can only be used for a specific task or part of the entire project.
Some of the advantages of managed services are:

  1. Partner - For larger organizations, managed services are a better option because they are partners for your company. They provide real business inputs and strategies to increase the productivity and performance of employees. These companies will train your employees and reduce the skill gaps wherever necessary. They provide customized training programs focused on your employees’ skill sets. It is a great partnership that considers human resource needs and provides solutions to business issues.

  2. Accountability - If something goes wrong, the outsourcing department will not take responsibility since they have only provided service for part of the project. However, accountability is of the essence when it comes to managed services. The services use state-of-the-art technology and are fully equipped to take any responsibility regarding threats or disasters. They have the tools to deal with emergencies and can help strategize.

  3. Ensures Longevity - Once you have subscribed to managed services, they will be with you for the long haul. They are dedicated and will remain with you throughout the ups and downs of the company.

  4. Skilled Professionals - The service providers come with a highly skilled body of professionals who have tried and tested the methods and other organizations. They are more accustomed to different company cultures and can help to increase positivity and success in an organization. A partner like this will help your company to upskill and reskill your workforce.


Understand the needs of your company and your workforce. Accordingly, reevaluate the benefits of each service and choose the best option. Managed services can be a great partner for a burgeoning business and help you stay competitive among numerous uncertainties.


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