Managed services: a definition
Managed services is a combination of human capabilities, technologies, insights, leading practices and strategic alliances with software providers - all packaged as a multi-year subscription offer with predictable costs. These services, usually delivered remotely, take over a process or subprocess, and they go beyond backoffice activities to deliver strategic outcomes in knowledge-intensive areas throughout the business. These range from information technology (IT) to finance and accounting (F&A), risk and regulatory, data and analytics, procurement and more.
About the study
In October 2021, we commissioned a study from HFS Research to understand the market’s current and planned use of managed services as part of business transformation, along with common hurdles and the expected return.
The enclosed findings are based on conversations with 800 executives around the world, including CIOs, CFOs, COOs, functional heads and shared services leaders.
They represent companies with $1.5 billion or more in revenue across various sectors: government, financial services, life science, retail, travel and healthcare.
Key findings
Managed services is the most effective delivery model for the type of work that providers offer. Nearly 9 in 10 executives agree.
Managed services already has traction in knowledge-intensive activities. Over 40% of respondents say managed services are used for more than half of their organisation’s activities in IT, cybersecurity, risk, compliance and business performance*.
Most companies plan to boost spending on managed services over the next two years. 75% of respondents said so, and the projected increase is often by significant margins.
The top goals for using managed services are cost savings, innovation and speed. 86% of respondents cite savings and innovation; 83% cite accelerated outcomes.
Those using managed services see substantial operational and financial rewards. 97% anticipate that using managed services at scale will boost profits. Nearly three-quarters expect improved employee and customer satisfaction.
IT and cybersecurity are big areas of need, with more focus areas emerging. Nearly 60% of respondents see their use of managed services going up more than 10% in IT, cybersecurity, and risk.
*The business performance category includes functions and activities such as finance and accounting (F&A); data insights and analytics; tax; legal; human resources; and transparency and reporting for environmental, sustainability and governance (ESG)
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