Managed services is the practice of outsourcing day-to-day management responsibilities as a strategic method for improving operations and cutting expenses. This can include outsourcing HR-activities, Production Support and lifecycle build/maintenance activities. The person or organization that owns or has direct oversight of the organization or system being managed is referred to as the offer-er, client or customer. The person or organization that accepts and provides the managed service is regarded as the service provider or MSP.
A managed services provider (MSP) is typically an information technology (IT) services provider that manages and assumes responsibility for providing a defined set of services to their clients either proactively or as they (not the client) determine that the services are needed. Most MSPs bill an upfront setup or Transition and an ongoing flat or near-fixed monthly fee, which benefits their clients by providing them with predictable IT support costs. Managed Service Providers (MSPs) sometimes are contracted to manage multiple staffing vendors and to measure their effectiveness in filling positions according to a customer's standards and requirements. In effect, the MSP serves as a "neutral" party that offers the customer a complete workforce solution while ensuring efficient operation and leveraging multiple staffing companies to obtain competitive rates. MSPs typically use a Vendor Management System (VMS) as a software tool to provide transparency and efficiency — along with detailed metrics to the user — related to every aspect of the contingent and contract workforce. The model has proven its usefulness in the private sector, notably among Fortune 500 companies, and is poised to become more common in the government arena.
MSPs often use specialized software, in order to control and deploy managed services to their customers known as Remote Monitoring and Management (RMM) software. Examples of such software include Continuum, Managed Workplace, N-able, PacketTrap, Nimsoft and CentraStage.