Managed services represent a higher-margin, more predictable revenue model than traditional project-based consulting. Firms that successfully transition to managed services build more sustainable businesses.
Managed Services vs. Traditional Consulting
| Factor | Project-Based | Managed Services |
|---|---|---|
| Revenue | One-time | Recurring |
| Predictability | Variable | High |
| Client relationship | Episodic | Continuous |
| Margin potential | 35-55% | 40-65% |
| Scalability | Linear | Leveraged |
Common Managed Service Offerings
- Outsourced Finance/Accounting: Ongoing financial management
- Managed IT: Infrastructure and application management
- Marketing Operations: Campaign management and analytics
- HR Administration: Payroll, benefits, compliance
- Data & Analytics: Ongoing reporting and insights
Building a Managed Services Practice
- Identify repeatability: Which services can be standardized?
- Define SLAs: Clear service level agreements
- Build processes: Documented, scalable workflows
- Price for value: Monthly or annual contracts
- Measure outcomes: KPIs that demonstrate value
- Invest in automation: Reduce delivery cost over time
Pricing Managed Services
- Fixed monthly fee: Most common, simplest for clients
- Tiered pricing: Different service levels at different prices
- Consumption-based: Pay for what you use
- Hybrid: Base fee + variable component