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What is co-managed IT and when is it a good fit?

co-managed IT

As businesses grow and the pace of technology accelerates, IT teams can quickly become overwhelmed. How do they keep networks, users, data, and infrastructure safe from sophisticated cyber events and hacks? How do they access specialized talent for large strategic projects like technology transformations while still handling day-to-day tasks such as network maintenance, hardware and software upgrades, user support, onboarding, and troubleshooting? Because of its complexities, IT can easily become a limiting factor (rather than an enabler), putting the brakes on parts of the business that need to keep running smoothly.

For all of these reasons, co-managed IT is an increasingly popular way of managing IT, particularly for small and midsize businesses. It combines the knowledge and continuity of a dedicated in-house IT team with the flexibility and broad-ranging expertise of an experienced managed service provider (MSP). With co-managed or hybrid IT, you don’t need to choose between an IT staff on your payroll or an outsourced MSP partner. You can build a flexible, “best of both worlds” model that provides economies of scale and is purpose-built for your particular business.

Sounds simple, right? Like most things in tech, co-managed IT is not as straightforward as it appears. Let’s look at the advantages and dispel some of the myths as we lay out a successful strategy for understanding the complexities and making the right choices.

The small-business dilemma

When it comes to IT, business typically have two choices: use internal staff for IT support or contract with an outside organization. While inside staff is often the first choice for a small or medium-sized business (SMB) because it seems less expensive and easier to manage, it can actually be the worst choice. Employees can easily get bogged down as they try to juggle business tasks with their IT responsibilities. Internal resources can also fall behind in the range of skills and tools they need to effectively manage the full scope of a company’s technology. Finally, in-house teams don’t necessarily have the know-how to keep the organization safe from sophisticated hacks and cyber attacks.

What is co-managed IT?

Co-managed IT is a combination of 4 simple things: a trusted partnership, intelligent division of labor, clearly defined responsibilities/accountabilities, and technology best practices. Under a shared management model between in-house teams and a managed service provider, employees are tasked with managing specific aspects of IT, while the outsourced partner covers everything else. Like all collaborations and partnerships, co-managed IT offers important advantages when it is structured properly and is a good fit for the business:

  • Companies get flexible and scalable technology capabilities that keep pace with today’s dynamic business environment
  • They can shore up their weak areas and focus on business growth, rather than the trials of daily IT support
  • They gain access to experience and expertise they might not have internally

Once a company decides to work with an outside resource, it’s important that they find a professionally run firm that can cover several bases. These managed service providers should have multiple staff members with the different skills and expertise SMBs need to address the broad range of technical issues they typically face. MSPs also carry business insurance and invest in regular technical training so they can stay on top of the latest technologies and best practices.

A divide and conquer strategy

For most companies, IT is not the core business, but it is at the heart of just about everything they do. This makes co-managed IT a very attractive proposition to enable customized and dynamic business outcomes. Your MSP partner augments in-house hands-on resources, and does it in a way that is cost-effective, scalable, and sustainable.

For example, the onsite IT team might handle routine tasks related to day-to-day operations and user support, while the MSP provides 24/7 coverage in areas such as network monitoring, endpoint security, cloud computing, and infrastructure management. The MSP can also make sure you’re following current best practices across your technology stack and keeping up to date with the latest security protections. Each division of labor is different, but the overall objective is to make sure everyone is covered and everyone does what they’re best at.

Even though co-managed IT looks different for every organization, here are some common themes that seem to run across industries and businesses:

  • The IT workload often surpasses resource capacity, either because your in-house team is too small, the business is growing too quickly, and/or the technology is becoming too challenging and complex to manage.
  • You’re embarking on a major transformation and don’t have the needed resources to see it through all of its lifecycle stages.
  • Cybersecurity threats are everywhere and you need a very specialized skillset to deal with them effectively.
  • Business continuity requires a robust backup and recovery plan that you don’t currently have.
  • To keep the business going, your IT requires around-the-clock coverage from IT professionals (onsite team and partner organization).

According to Mordor Intelligence, “It is estimated that successfully deploying managed services will help protect your IT assets, reduce IT cost by 25-45%, and increase operational efficiency by 45-65%.”[1]

Debunking common myths about co-managed IT

  • Co-managed IT will raise costs: Not true–a mix of in-house and MSP resources is often the most cost-effective solution to reduce operational costs.
  • Co-managed IT won’t fit my business: Not true–you can get specific à la carte IT services, based on your needs.
  • Co-managed IT will mean a loss of control of quality, responsiveness, agility: In fact, the opposite is true, as IT specialists from a variety of disciplines can partner with you to complement and add value at every critical touchpoint.
  • An MSP won’t care as much about my business as employees: This is not true–your MSP’s success will be tied to your success.

Choosing the MSP that best fits your needs

You probably have a pretty good idea about your organization’s strengths and limitations, where you’re stretched too thin, and the gaps you need to fill. As you move toward a co-managed IT model, you’ll want to be sure that the company you partner with has services that are:

  • A good fit for what you need
  • Priced right
  • Well-reviewed by other client companies

Typically, the first step in this process is a gap analysis or audit that looks at what your organization is doing well and what it is struggling with. Think about what you could accomplish by hiring new staff versus outsourcing and compare the costs of each. Are there places where your teams are overwhelmed? Is your organization staying current with emerging technology? Would it be more cost-effective to outsource rather grow your in-house team?

You could also start to meet with MSPs to get a clearer understanding of what services they provide. As you get more comfortable with a couple of candidates and their offerings, consider having more in-depth discussions that involve some of your key in-house players. Since they’ll be working in the trenches with any MSP, their support will be a critical success factor in developing a strong collaboration. Have your team ask about:

  • Services: Are they a good choice for the services you want to outsource?
  • Experience: Do they have a strong track record managing IT operations and security?
  • Accessibility: Are their services available around the clock, if you need that kind of coverage?
  • Scalability: Can they help you scale up and scale down as needed?
  • Pricing: Does their pricing compare favorably with other MSPs you’ve investigated?
  • Compliance: Can they conduct audits to ensure you are meeting all requirements for security standards?
  • References: What are past and current clients saying about this MSP?

The co-managed IT value proposition

Co-management takes the pressure off of in-house IT departments, allowing onsite teams to focus on the tasks and projects they are highly skilled at, and leaving the rest to their MSP partner. Working with an MSP, you can have everything from weekday to 24x7x365 site management, monitoring, maintenance, and support, in addition to help desk and state-of-the-art security solutions. With a mix of offerings, you can select a customized plan for your business, and you can also be proactive in finding and quickly fixing issues that could harm your organization.

Co-managed services can also help with IT audits, cloud computing services, offsite data backup and recovery, and continuity. Everything about your MSP partnership should be designed to streamline operations, maximize the cost/benefit equation, and mitigate risks.

 “Outsourced and co-managed IT models have become the strategic go-to for SMBs who want to focus their efforts on business growth rather than the rigors of daily IT support.[2]

How to successfully transition IT tasks from in-house teams to an MSP

This is both a technical and a management challenge, and it’s critically important that you get it right. Like any change in the workplace, employees will need to understand the benefits of a co-managed MSP. Why are you making this change? Will it make their jobs easier or harder, more or less secure, duller or more fulfilling? In the employee’s mind, this is a major change, and their support will be a critical success factor moving forward. Once they understand the rationale and you have their buy-in, they can be willing partners with your MSP as you divide up work and fill gaps.

Customer testimonials

“Sagacent provided us reliable, responsive, and insightful IT services. When we acquired another company, they helped us migrate the entire company’s IT system into our stem within 24 hours and without any business interruptions. This included an entire server migration. Their excellent service has earned them an outstanding reputation and has made them our trusted partner.” Rose Battery, Contract manufacturing.

“Regardless of the need (and sometimes the hour), Sagacent Technologies has been ready to support my business. My staff and I don’t have to be concerned with computers or the network–which has freed us up to concentrate on our core business. I gladly recommend Sagacent Technologies for any computer, networking, security, or other technical needs.” Susan, internet/mail order business.

The Sagacent co-managed MSP partnership

When you partner with Sagacent Technologies, our support and expertise amplify the capabilities of your in-house teams. This enables you to focus on what matters most–managing your business, not the technology you use to run it.

Sagacent has built a team of experts who have an in-depth understanding of today’s technologies, as well as up-to-date knowledge about best practices and how to apply them in real-world settings. We have extensive experience partnering with in-house IT teams, offering co-managed services that enhance capabilities and are tailor made for each customer’s unique set of requirements.

Our customers have full access to our services—integrated with their onsite organizational structure—always up-to-date and ready when and where they need them. And because Sagacent’s services are highly customizable, each customer only pays for the services they need, which ensures a very flexible and cost-effective outsourcing solution.

[1] Mordor Intelligence, Managed Services Market – Growth, Trends, COVID 19 Impact, and Forecasts

[2] Coretelligent Insight Article, December 2022