Why Choose Managed Services? Three Benefits for Heavy Industry
If you work in heavy industry, you know how chaotic projects and sites can be on any given day. Hundreds or even thousands of craftsmen with specific contract permutations arrive on-site daily for their shifts.
While managing the payment process of a large contractor workforce is often done by internal teams trained on a specific software platform, some companies choose to invest in managed services.
By utilizing managed services, companies can offload certain operational responsibilities to specialized service providers, allowing them to focus on their core business functions, improve efficiency, reduce costs, and enhance their overall competitiveness..
Why Choose Managed Services?
Managed services typically reduce costs and improve operations.
Managed services can include a range of outsourcing functions, such as:
- IT support, infrastructure management, software development and management, cybersecurity, and data analytics.
- Engineering and design services, including feasibility studies, conceptual and detailed design, project management, construction, and maintenance.
- Procurement and supply chain management services, such as vendor management, purchasing, inventory management, and logistics.
- Health, Safety, and Environment (HSE) Services, including safety assessments, risk management, incident management, and compliance with regulatory requirements.
By outsourcing these functions, companies can do what they do best. Additionally, managed service offerings may include specialized expertise and technologies unavailable in-house. As a result, businesses can improve the quality and efficiency of their outsourced services.
3 Benefits of Managed Services in Heavy Industry
Many heavy-asset companies struggle to hire, train, and retain skilled staff. When it comes to outsourcing different areas of operations and leaning on experts, managed services allow employees to focus on different tasks, value opportunities, and optimization.
Here is a closer look at three benefits when companies embrace managed services:
- Depth of Subject Matter Expertise – Heavy industry is very complex. Managing large projects and sites, like turnarounds, can mean a massive number of suppliers coming on-site. All the focus should be on the work, like changing out a piece of equipment. When you use managed services to help process payments and supplier contracts, you can bring calmness and structure to a chaotic time.
By managing those vendor relationships, companies can ensure contract terms are being applied correctly; and there is no leakage. This is particularly helpful when firms know they can be audited at any time. If employees have a backup from subject matter experts provided by an MSP, they can reach out at any time and have questions answered or lean on them for support.
2. Resource Scalability – Yes, companies can hire individuals to handle a particular task, like approving payments. However, during a high-volume period, it’s helpful if you have the backup to scale up resources depending on the needs of the business. Also, it is critical these resources have access to the training they need.One of the biggest advantages of using managed services is that you’re not leaning on just one person or a few people. It allows employees to get out of the weeds, such as processing payments, and have a greater impact on the broader business.
3. Operational Consistency – Everyone wants to ensure their business is running consistently – even if different locations have different processes. For example, you always want to ensure all the data is entered in the same format. This allows consistent outputs so you can more easily see if you’re compliant in the case of an audit. You can also use this consistent data for future benchmarking.
Over time, the business and its employees can drive impactful change. For example, a company using a contractor spend management solution may discover 60% of over-rides on a given day are due to a malfunctioning card reader at a site. Now, they can see the big picture and fix the broken reader.
With managed services, employees can troubleshoot and be more strategic in driving optimization because they have an outside team supporting them.
Growing Market for Managed Services
Just how big is the managed service market? Managed services accounted for $48.6 billion in 2021 and is expected to reach $73 billion in 2025.
According to a 2022 study by KPMG, 75% of organizations planned to increase spending on managed services. Of those, 41% use managed services for more than half of their work in IT, cybersecurity, risk, and business performance.
For example, cloud services can help companies leverage the power of cloud computing without the need for in-house expertise. This is especially helpful when migrating data and applications to the cloud, managing cloud environments, and providing support and optimization.
Another way managed services can be utilized is by providing remote monitoring and control. With the increasing use of IoT-connected devices, MSPs can offer remote monitoring and control services for operators.
In the oil and gas industry, sensors and monitoring devices can be deployed across remote sites. For example, IoT sensors can monitor for flammable gases and toxic vapors in the atmosphere to help prevent gas leakages and oil spills.
Using an MSP for remote monitoring and control, companies can collect real-time data for insights into equipment performance, and collect environmental and safety data for compliance. This function can help companies proactively identify issues, optimize production, and enhance safety.
What is the Next Generation of Managed Services?
Initially, managed services may have been used for projects narrow in scope or to solve specific business functions. Today, it seems traditional managed services models are evolving, due to labor shortages, risk mitigation, and regulatory challenges.
According to a Harvard Business Review Analytic Services White Paper for Deloitte, the next generation of managed services involves filling skills gaps and providing a competitive advantage. These services can focus on everything from simple task completion and cost reduction to outcome-oriented innovation.
Instead of managed services providing static outcomes, the report says businesses are rethinking “build vs. buy” decisions. Managed services can not only help enterprises to standardize or automate repetitive tasks but help to inspire innovation and provide strategic value.
In the report, Will Venters, PhD, an associate professor of information systems at the London School of Economics, validates this approach. “It makes sense that the company that helps you implement and integrate a cloud system can also help run it and offer advice on the best way to maximize its use,” he notes.
He adds: “Many industries have tight labor pools and a competitive market for finding and retaining good talent, which has motivated organizations to contract with managed service providers to supplement their in-house staff.”
Take the Next Step to Faster ROI with MServ
MCi now offers its own global managed service offering, MServ. Heavy industrial sites that leverage large contractor workforces can benefit from industry best practices, achieve strategic operational excellence, and drive cost-saving value—up to 50% faster.
By leveraging the TRACK Platform and MServ offerings together, businesses can focus on high-value deliverables for their organization.
The MServ offering includes all the functionality and benefits of MCi’s contractor spend management software, the TRACK Platform, managed by a team of knowledgeable and responsive MCi experts. This removes the administrative burden from customers’ internal teams.
Our global team of contractor spend experts can provide companies with the expertise needed to effectively manage relationships with their contractors, including onboarding, compliance tracking, collaboration, daily cost settlement, contracting strategies, actionable insights, and continuous value optimization.
Curious about our MServ offering? Learn more now.