Shared services and managed services have a cost, but they can cost different amounts for a variety of reasons. Shared services require an internal company investment in the creation of a new service management department. Costs included in this investment may include hiring new staff, creating physical space for the department, and maintaining payroll for the designated team. After the department starts operating, there may also be additional costs that were not previously considered during the planning process.
If you are a technology organization, you most likely have the tools and skill set needed to efficiently manage and support your IT systems. In that case, a shared services model can offer the capabilities you need to drive your business forward. But if you're a retailer or healthcare organization, interacting with a provider through a managed services model can open doors to unparalleled skills and capabilities to efficiently run your business. Managed and shared services have long been a cost-effective way for government entities to stay on budget.
At OST, our managed and shared services support numerous large-scale, complex and distributed operations to save organizations time and money. We provide outsourced solutions to federal, state and local governments in the areas of administration, human capital management, technical, organizational and even field support. Shared services are a business model that leverages an organization's resources. This translates into lower costs with agreed customer service levels.
It is an independent business unit that provides numerous services to both corporate functions and operating business units. One of the main objectives of hiring an MSP is access to unlimited IT support, for a fixed monthly fee. An MSP ensures that an organization can keep up with its budget, paying only for what is used. The fixed cost of managed services can be lower than the investment in shared services and the fixed cost is simple.
The benefits of a managed services model include efficient IT system management, improved risk management, predictable costs, and the ability to focus on your core business strategies and objectives. Because the managed services model relies on an external company, it can help internal employees focus on maximizing productivity in their trained positions, rather than adding additional tasks that they may not be trained in. Shared Services (SS), a combination of internal and outsourced IT operations, utilizes internal and external managed services. Both approaches allow the company to focus on higher value-added activities; however, the shared services model has three key advantages over centralized services to provide sustained impact in the face of ever-evolving business needs.
Managed services are the business model of outsourcing the maintenance of a service or services to a specialized company. As a separate business unit that is created to provide a variety of IT services, it allows the resources of each division to be focused solely on supporting the overall objectives and not worrying about day-to-day IT management. After considering the variables, decide if the aspect in question would be better managed using a managed or shared services model. When a company outsources various aspects of its operation to a managed service provider, it chooses not to use any internal knowledge.
A shared services model has three key advantages over centralized services, increasing the likelihood of delivering sustained business impact, especially during disruptive business conditions. In the shared services model, the cost of service delivery is “charged to customers” and business groups may have the option to hire an external service provider or do the work themselves, so SSO must be competitively priced. .
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