Managed IT Services: Pros and Cons

Managed IT Services is the perfect IT model for small to medium sized enterprises. Generally observed as the touch stone of technology outsourcing, this IT model is an important arrangement for vendors and outsourcing organizations. It allows a company to outsource certain IT functions to an external vendor, rather than hiring their own in-house staff, purchasing their own equipment and managing their own IT department.

Here are some salient benefits of the Managed IT Services:

– It is also called the Fully Outsourced Model. In this model the vendor takes total liability of a group of deliverables in a scheme.
– The vendor also has total decision making liabilities for providing the fixed group of deliverables.
– Finances are designed on the basis of the span of time, this typically ranges between 12-months to 5-years.
– Sometimes budgets are also designed for the complete task, similar to a fixed price engagement. In such scenarios, the vendors are free to decide where, how and the total number of personnel required for the task to be delivered. However, there are certain risks involved with this attitude as vendors can decide the allotment of the shared reserves for a job which may result in delivery issues.
– The model is widely used if the task can be easily reached out with clearly marked deliverables.
– To help this model work, the vendor must have perfect realization of the client’s requirements. The client must have the confidence to provide the vendor with the job.
– The duty of the client is to review the contracts’ management and track budgets.
– Vendor is responsible for choosing the resources and taking care of stakeholder anticipations.
– Managed IT Services is quite often used by companies as an extension of their pre-set engagements.

Here are the pros of this model:

– As management and delivery of stakeholder anticipations is the liability of the vendors, the clients are free to focus on running their business.
– Vendors are quite free and may work in moderately interference-free projects.
– It also enables vendors to create long term planned investments which will indirectly profit the clients through a lower costs financial modeling.
– Knowledge custody becomes quite modernized and sustainable.

Here are some of the cons:

– Vendors can become reluctant and not take up new or additional responsibilities.
– Business-cultural differences between clients and vendors result in gap between both parties, and can affect the results.
– In certain circumstances, vendors are not in the knowledge space or domain to realize and understand what the client need, and this could cause major setbacks.
– Procedure upgrades may cause the decline in manpower capacities, which are involved the tasks, this situation is not favored by vendors because of a natural cut down in billing.
– Re-allotment of the contracts is also not appreciated by existing vendors, as they fear it to be less or non-cooperative.

Managed IT Services has been proven by many businesses all around the world, especially for SMEs, who are usually on a strict spending budget and cannot afford to invest in their IT department or infrastructure.

CommGate (S) Pte Ltd provides Managed IT services for SMEs in Singapore. Its services include & business applications for Connectivity, Communication, Collaboration and Software as a Service (SaaS). CommGate provides your business with a comprehensive Managed IT services you can reply on.

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