As technology needs grow, businesses are often challenged with tasks that require software development. While expanding an in-house team might seem like the obvious solution, IT outsourcing services can be more beneficial. This strategy provides access to specialized skills and expertise while being more cost-effective than maintaining full-time experts.
If you choose to outsource, you need to select the engagement type. Typically, companies face the choice between managed services vs professional services.
What is the difference between professional services vs managed services? What are their benefits? How to choose between these types of engagement? What is better for your specific business case? Let’s find out!
Comparing managed services vs professional services
Managed services
Managed services refer to the ongoing, proactive management and support of a company's tech infrastructure by an external provider. Businesses that use these services benefit from continuous monitoring, maintenance, and optimization of their systems. The managed services model prevents issues before they arise, ensuring systems are always up-to-date and running efficiently. Examples of managed services include:
- Infrastructure management: This includes monitoring and maintaining servers, networks, and storage systems. The managed service provider (MSP) ensures everything is running smoothly and resolves any issues.
- Network security services: An MSP can handle firewall-related tasks like intrusion detection and vulnerability management. These keep your organization's data secure from cyber threats.
- Help desk support: Your employees can contact an MSP for technical assistance with everyday problems, such as password resets or software troubleshooting.
- Cloud management: If your business relies on cloud-based applications like Microsoft 365 or Salesforce, an MSP can handle the provisioning, configuration, and ongoing maintenance of these services.
- Data backup and disaster recovery: These solutions ensure your critical business information is protected in case of a disaster and your systems are back up and running quickly if any damage occurs.
- SaaS management: Many SaaS applications require ongoing configuration and updates. An MSP can manage these tasks, ensuring your SaaS applications are optimized and secure.
Professional services
These services are a range of project-based activities that require specialized skills and expertise. Professional services are typically contracted for specific tasks or projects with a defined scope and timeframe. Their providers bring in-depth knowledge and experience to address complex challenges, develop customized solutions, and implement new technologies. Here are the examples of professional services:
- Technology consulting: Your service provider offers strategic advice and planning to optimize tech infrastructure and align it with business goals.
- Software development: Your vendor designs, develops, and deploys custom software applications based on your business needs.
- System integration: The developers for hire integrate disparate systems and technologies to optimize workflows and deliver improved efficiency.
Unlike managed services, which focus on continuous support, professional services suit businesses seeking targeted expertise for particular projects. In the debate of managed services vs professional services, the latter helps organizations achieve specific objectives, such as launching a new product, upgrading infrastructure, or implementing new processes.
Advantages of managed and professional services
Benefits of managed services
Companies often choose managed services so that they continuously maintain their critical infrastructure, which enables to focus on core business activities without distractions. Moreover, managed services are more budget-friendly than a dedicated in-house team because the former eliminates the need for significant upfront investment. With an MSP, you can save on costs associated with salaries, benefits, and training of in-house employees.
Here are more of its advantages:
- Proactive issue resolution: MSPs continuously monitor and manage infrastructure systems to identify and address potential issues before they become critical problems. This proactive approach minimizes downtime and ensures business continuity.
- Predictable budgeting: With a subscription-based pricing model, businesses can estimate monthly or annual costs for managed services. This helps with financial planning and eliminates unexpected expenses.
- Access to expertise: MSPs offer broad expertise and resources that may not be available in-house. These experts' skills and knowledge can improve the company's tech infrastructure and operations.
- Focus on core business: IT outsourcing allows client companies to prioritize their core business activities without distractions. This allows them to allocate internal resources better and improve their productivity.
- Scalability: Managed services can easily scale with the growth of the business. Whether expanding operations or integrating new technologies, MSPs can adjust their services to meet changing needs, ensuring that tech infrastructure supports business growth.
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Benefits of professional services
Organizations facing specific challenges often benefit from engaging professional services firms. Professional services are particularly valuable for tackling a large-scale or specialized project, such as hardware/software deployment, cloud migration, data backup/recovery plan, or new office setups.
Here are the particular benefits of these services:
- Specialized skills: Professional service providers bring a mix of technical and business-oriented skills relevant to your project. In addition to understanding various programming languages, frameworks, and methodologies, a reliable partner also has expertise in your industry. This allows such a company to translate your needs into efficient software solutions that support your business goals.
- Flexibility: The project-by-project engagement model allows organizations to address specific challenges without committing to long-term contracts or permanent hires. For example, a company might first hire Angular specialists to develop a web application and, upon completion, engage a team of Node.js experts to integrate a new back-end system. This approach ensures access to the right skills at the right time.
- Tailored solutions: Using off-the-shelf solutions may fit some companies, but these generic options often need more flexibility to address the unique challenges of your business case. Custom solutions offered by professional service providers aim to meet the requirements of your specific case. While the former can keep you running, a piece of tailored software is what can give you a competitive advantage.
- Rapid implementation: With dedicated expertise and clear project scopes, professional services can often deploy and integrate new solutions quickly. This swift execution means businesses can benefit from new technologies or processes sooner, allowing them to respond promptly to market changes and achieve their strategic objectives without unnecessary delays.
- Enhanced innovation: Choosing a professional services provider allows your company to access the latest industry trends, technologies, and best practices. Leveraging innovation allows a business to improve its products, services, and processes. Moreover, external expertise introduces fresh perspectives that can result in new insights into your projects.
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How to choose between professional services vs managed services?
When deciding between managed services vs professional services, it's essential to view them not as competing options but as complementary strategies that can be crucial to your company's success. Both services can work together strategically to drive customer satisfaction and boost renewal rates. Here’s how to determine which service model is right for your organization based on key considerations.
1. Assess your business need
Start by assessing your project requirements. Managed services help businesses with continuous tech support and infrastructure maintenance, covering a wide range of services such as network management, security, and user support. This approach ensures the maintenance and monitoring of critical systems, freeing up your internal teams to focus on strategic, revenue-generating projects.
On the other hand, professional services work well with specific, time-bound projects requiring specialized expertise, like software development or system integration. These services provide the targeted skills needed to complete complex tasks efficiently.
2. Estimate budget
Consider your financial planning preferences. Managed services may be the better choice if you value predictable, recurring costs due to their subscription-based pricing. This model allows for easier budgeting and financial forecasting.
However, if your budget is more flexible and you prefer paying for services on a project-by-project basis, professional services might be more suitable. This approach can be more cost-effective for businesses requiring occasional specialized assistance without continuous support.
3. Evaluate internal resources
What are the capabilities of your in-house engineers? Managed services can fill gaps in your team's expertise, providing ongoing management and maintenance without additional hires. Small businesses can save money this way, while enterprises can outsource one of their business components, such as cybersecurity.
Conversely, if your team lacks specific skills for certain projects, professional services can temporarily offer the necessary expertise, ensuring that your projects are completed with high-quality results.
4. Determine the flexibility requirements
Think about your business’s growth and adaptability needs. Managed services offer scalable support that can adjust to changing demands, making them suitable for businesses expecting growth or fluctuating requirements. This flexibility ensures that your infrastructure can scale with your business.
A comparison of professional vs managed services in terms of flexibility reveals that professional services ensure that businesses can leverage expert knowledge for short-term projects, offering the agility to meet precise goals without long-term agreements.
5. Align with strategic objectives
If you aim to establish a long-term partnership for scalable infrastructure improvement, an MSP can continuously align it with your business objectives. MSPs provide regular maintenance and strategic advice so your tech infrastructure grows organically with your business.
However, if you focus on executing short-term projects that drive immediate improvements, professional services offer the project-specific focus required to achieve these goals.
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Wrap up
To conclude, the choice between managed services vs professional services depends on your business needs, budget, internal resources, the flexibility required, and strategic goals. Managed services provide ongoing, proactive support and management of technical infrastructure on a subscription basis, and professional services offer specialized expertise for specific, time-bound projects to deliver custom software solutions.
However, it is not always necessary to compare managed services vs professional services because both can be used simultaneously to achieve the company's strategic goals. In this case, partnering with a provider that offers both options would be an enormous advantage.
At N-iX, we offer managed and professional services for middle—and enterprise-sized companies. With 2,200 experts on board, we handle projects of any complexity, providing technology consulting, digital transformation, custom solution development, and team extension.
