As a business owner, you have choices to make every day. Some decisions will have little impact on your overall options. Others, however, can drastically alter the course of daily operations. Deciding between co-managed and managed IT services is one decision you should not take lightly. What must you know before making this critical choice?
Defining The Services
Before comparing co-managed and managed IT, you must know what each option is. With co-managed IT services, you partner with an external IT services provider to handle IT management and operations. Your organization’s internal IT staff works together with the external provider, leveraging the provider’s specialized expertise and additional capabilities.
With fully managed IT services, your organization outsources IT operations and management to an external provider. The provider handles all or nearly all aspects of IT with little involvement from internal staff. Essentially the provider serves as the organization’s IT department. The approach follows an as-a-service contracting model.
Control & Customization
A major difference lies in where control rests and the degree of customization possible. With co-managed IT services, your organization retains much more visibility and control compared to fully managed services. The ability to influence IT decisions and approaches tailored to the business is higher. However, the level of control and customization depends on what responsibilities are shared versus handled solely by the external provider.
Managed IT services offer less customization since the provider makes most IT decisions based on its best practices and economies of scale from serving multiple clients. However, organizations have more control over defining contracted service level agreements. There is normally still some flexibility for an organization to request specific requirements within limits.
Expertise & Cost
A key benefit both co-managed and managed services offer is leveraging the typically greater expertise, capabilities, and efficiencies an established IT services provider can provide compared to an in-house IT organization. The breadth and depth of experience the provider brings from working with other clients at scale can be immense. You can tap expertise on demand.
However, co-managed IT services allow you to leverage better the specific business and institutional knowledge of internal IT staff. Fully outsourcing IT can lead to lost knowledge and a lack of alignment with broader organizational needs. With co-management, internal staff skills also improve by working with technical experts from the external provider.
From a cost perspective managed services will often have lower upfront costs than co-managed services since fewer internal staff are needed. However, ongoing costs may be higher for managed services given the provider shoulders all responsibility and risks. For co-managed services, certain costs are shared and the partnership model can drive efficiencies to help balance expenses.
Transitioning & Terminating
For organizations considering a switch between approaches, moving from managed services to a co-managed model typically involves easier transitioning. Bringing certain operations back in-house and adding staff with the assistance of the existing external provider is more straightforward than fully outsourcing all responsibilities after having in-house staff.
Terminating any long-term outsourcing contract can have complications for operations. However, managed services’ reliance on external capability means orchestrating an orderly transfer or rebuilding in-house skills is even more challenging compared to co-managed arrangements designed around internal staff staying involved.
You should weigh your needs, capabilities, budgets, and growth trajectories when determining if a co-management or full-management approach makes the most strategic sense for your IT services. Establishing clear objectives, service levels and governance procedures can help maximize the benefits while minimizing the pitfalls of whichever model is selected.