MSP vs. Managed IT Services

man sitting at desk surrounded by computers, keyboards, and monitors while on the phone.

One thing that has created confusion in discussions about workforce management is the term Managed Service Provider or “MSP.” Depending on who you ask, an MSP is a way to outsource either contingent workforce management or IT services for your organization.

Today, we’ll explore MSP vs. managed IT services, the business practices these terms describe, and help clear up any confusion or misunderstanding. 

Which Came First? | MSP vs. Managed IT Services

The idea of managed services as a business process outsourcing (BPO) practice didn’t come about from experts in workforce management. 

Instead, managed services for contingent workforce management was born from the IT services industry. It had been around for decades before modern workforce management existed. Yet, the success of these services served as the model for the contingent workforce MSP we know today.

The ‘MSP’ for IT Stands for ‘Managed Service Provider’

Managed services involve outsourcing the responsibility for building, deploying, and maintaining a range of technologies—hardware, software, or both. They help organizations improve operations and cut expenses related to IT. Computers and information technologies are a huge part of nearly every organization. 

The constant demand for skilled IT pros makes IT staffing a costly part of business. Many companies have found the managed services model a cost-effective way to ensure their tech meets their needs. Likewise, they don’t have to source, train, manage, and retain costly IT staff. However, they’re not the same when looking at MSPs vs. managed IT services for a contingent workforce.

MSP for Human Capital

This form of BPO offers an efficient and effective means of outsourcing the management of your organization’s contingent workforce. A well-designed program can oversee the comprehensive contingent workforce management lifecycle upon partnering with an MSP supplier. 

Similarly, MSP for IT services uses these programs to give customers the full benefit of experienced professionals with deep expertise in workforce management.

Customers rely on the MSP to:

  • Manage multiple staffing supplier relationships
  • Negotiate pricing and terms
  • Monitor performance
  • Drive compliance with the customers’ business rules

To summarize, MSP vs. Managed IT Services—both managed services for IT and managed service providers for human capital—are examples of business process outsourcing designed to help customers cost-effectively manage critical business functions. 

Both rely on detailed service level agreements or SLAs to define the business rules the MSP must observe while internal resources oversee the MSP’s activities. 

For IT Services, an organization’s IT management monitors performance and drives SLA compliance. Likewise, for contingent workforce MSPs, it is the HR or workforce management leadership tasked with oversight. In both cases, a well-designed and adequately managed MSP outsourcing strategy helps organizations work more efficiently and effectively.

Need help managing your workforce? Read more about our managed service provider offerings or contact us to talk more!

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