Managed Services vs Outsourcing

“Outsourcing” is a broad category. Managed services is a specific operating model where the provider commits to service levels and runs day-to-day operations. This guide explains the practical differences.

The practical difference

Outsourcing can mean many things: projects, staff augmentation, or ongoing services.

Managed services usually means: the provider owns operations, commits to defined SLAs, and is accountable for ongoing performance.

When managed services makes sense

• You need reliable operations (uptime, response times, maintenance routines).
• You want predictable performance measures and clear accountability.
• You can define service boundaries and escalation paths.

Common pricing models

• Flat monthly: defined scope and SLA, predictable cost.
• Tiered: price varies by users, devices, tickets, or workload bands.
• Hybrid: base fee plus project fees for out-of-scope work.

Always clarify what counts as “in scope” vs “project work.”

Common pitfalls

• Unclear scope (everything becomes “out of scope”).
• SLAs that measure the wrong things (speed without quality).
• Weak governance (no internal owner, no cadence, no escalation).

Note: This page is educational and general. It is not legal, tax, HR, or security advice. For decisions with real risk, consult qualified professionals.