A managed service in IT is a precisely defined, typically recurring service provided by a specialist provider that is typically billed on a demand or time basis. The type, scope, and quality of the services are contractually defined in advance between the managed service provider (MSP) and customer in a service level agreement (SLA). It might define, for example, IT system and service availability or the response time following a fault. Cloud-based managed services, in particular, are the most modern and flexible form to relieve internal IT.

A managed service provider (MSP) typically provides defined services to multiple customers from a shared infrastructure. The data and processes of the different customers are strictly and securely separated thanks to multi-client capability. The MSP thus achieves economies of scale in costs, personnel, and expertise, which it can pass on to the customers via an attractive pricing model.

A service level agreement (SLA) defines the level of service a provider agrees to provide and specifies the criteria against which the service will be measured. It defines remedial actions or continuous improvement process (CIP) should the provider fail to meet the agreed service level. This is an important part of any contract with a managed service provider. Standardized SLAs and contracts are now offered for many services.  

Services such as IT support or helpdesk can be part of a managed service. The specific scope depends on the customer’s individual service desk architecture. In many cases, it will make sense for first-level support to be provided by a general, in-house, or external team and second-level support by the managed service provider.

There are a number of factors that influence the quality of a managed service provider. First, the provider should be able to demonstrate extensive expertise in the area in question with relevant references and a large pool of specialist staff. Second, a provider with extensive experience in service management is likely to also have considerable expertise in designing service processes. Third, service desk professionalism and capacity are important factors in the provider’s contactability and engagement in the event of problems. High call volumes are an important indicator in this respect, and service hours outside of core hours are also crucial. 

As a general rule, the greater the number of non-IT employees who will come into contact with a managed service, the more important it is to have a locally based provider. For example, if a problem occurs with business-critical services, such as Microsoft Teams communications, language or cultural barriers should not stand in the way of resolution. Continuity and specific experience with the customer are also essential, as is knowledge of local data protection policies or general business operations. Providers based in Germany have a clear advantage in these areas.