Definition of Managed Services

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The basic definition of managed services is that a managed service provider takes over some or all of the tasks needed to perform a function which is essential but not core to a business. That sounds simple and in theory it is. In practice, however, it takes more in-depth understanding and solid communication to make it work.

Understanding managed services from a provider’s perspective

From the perspective of a managed service provider, “managed” is generally a synonym for “ongoing and routine”. In other words, a managed services provider will expect a service to be in a healthy state when they take it over and they will see their job as being to do whatever they reasonably can to keep it that way.

Anything ad hoc is likely to be outside of the scope of managed services

The most obvious examples of ad hoc activities are installations (and initial configurations), upgrades (as distinct from standard operational patches and updates) and decommissions. None of these are likely to be covered by a standard managed services agreement. Most IT managed services providers will be able to accommodate them, but they will treat them as add-on services and charge accordingly.

Likewise, if client-owned equipment is discovered to be faulty, a managed service provider will typically only arrange for a swap out if the equipment is covered by a warranty or other service agreement with them or another third-party vendor. In this situation, they will typically just contact the vendor and arrange a like-for-like replacement, which will then be installed and configured to identical specifications.

Definition of Managed Services

If you look at the matter from their perspective, this makes complete sense. Managed service providers need to be able to budget and maintain their cash flow just like everyone else. It’s fairly straightforward for them to do this when they are billing customers for regular, everyday tasks, but completely impractical for them to do so with ad hoc ones. They therefore make sure that their regular billing only covers predictable, repetitive tasks and that anything else is extra.

Managed services basically revolves around maintaining normal operating performance

As previously mentioned, managed service providers will expect customers to hand over infrastructure in what is agreed to be a healthy running state. The managed service provider will then do whatever they reasonably can to keep it that way. To avoid confusion, it’s very much recommended that the customer and the managed service provider agree a definition of normal operating performance along with an acceptable level of deviation. That way everyone is clear about where they stand and can confirm that they’re happy with it.

For the sake of completeness, it’s in the highest degree unlikely that any service provider will be able to guarantee 100% uptime. In most cases the high nineties is as far as anyone can be reasonably expected to go.

Managed services are very much based around standard operating procedures

Managed service providers tend to dislike terms such as “best practices” and “industry standards”. The exception is when these are clearly documented, especially by an authority body. For example, “security best practices” is a very ambiguous term, but compliance programs are specific and backed by authority sources.

What this means in practice is that a managed service provider will figure out what it needs to do to keep a service running to an agreed standard and will encapsulate this in a runbook of standard operating procedures. These will specify what tasks need to be performed when, how and by whom along with escalation paths for incidents. Every task will be documented in some way and will be undertaken under an agreed SLA with reporting to prove that the managed service provider is in compliance with their contractual obligations.

It is recommended to document reasons as well as requirements

Managed service contracts tend to be about reconciling a customer’s need to focus on outcomes with a managed service provider’s need to focus on procedures. This basically means that a customer has to figure out what they need and what they want (and prioritize the latter) and then the managed service provider has to work with the customer to figure out what can come under the scope of a managed service agreement and what, if anything, needs to be an ad hoc project.

They then need to work together to determine what standards have to be met for the customer to achieve their objectives. It’s highly advisable to keep notes on the thinking behind any decisions taken to provide a reference point for any changes which may be needed in the future. In other words, so that nobody needs to “reinvent the wheel”.

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