Four Common Misperceptions About Managed Services

The term ‘managed service’ provider is often misunderstood—it’s a very broad, catch-all work structure like ‘agency.’ At the end of the day, both are organizations or groups of people innovatively executing a service or task on behalf of another group or organization. So, what exactly is a managed service? In the consulting world, a managed service typically looks like any practice or task done to support an organization’s transformation past the assessment and “advice” stage of our engagement. And at KPMG, a managed service always involves 3 components: exceptional experts, sound processes and advanced technology solutions.

Here's an example of a managed service in the real world.

A large financial institution, a bank, is reviewing their customers to monitor for financial crime, in what is typically a Customer Due Diligence review and remediation. There are a very large number of client profiles to review, more than 400.000. The financial institution is concerned: 1.) Given the risk and potential fines involved, the institution needs to ensure the highest degree of accuracy in the review of its customers. 2.) With such a large number of files to review, it is not possible to meet the deadlines without hiring extra resources. This type of review is cyclical and is not a full-time job for a single institution. 3.) To add to the staffing complexity, they need a team accustomed to each local market’s regulations. And 4.) The financial institution wants to ensure their customers are not overburdened by the review process.

The bank also has to think through the most cost-effective way to get this done. To hire in-house resources is cost-prohibitive, and so is overhead and technology needed to do it well. A managed services provider with a team in each market, ready to deploy, and that is highly equipped in the financial sector, is the logical and most cost-effective option.

Now, imagine the managed service team also includes highly regarded regulatory and finance experts in each local market. On top of that, the service provider also provides the bank with technology-solution experts to build bespoke, cloud-based solutions that automate the data collection and analysis workflows. With these additional experts involved, the bank is leveraging a managed service that is more than manual tasks, more than resource-related cost savings or extra heads on the ground, and more than technology implementation alone. Now the financial institution can rely on a strategic partner creating and executing vision that also has operational upside. It varies by clients, but operational efficiencies of 20-35% are not uncommon.

Learning about a new service or operating model does not have to be complex. But there will always be a learning curve as we introduce new, and innovative solutions. To help clarify how KPMG NL is doing managed services, let’s tackle the 4 most common misperceptions about managed services.

1. Managed Services is simply another phrase for a call-center or chat-message farm.

False. KPMG NL managed service teams align with our consulting project teams, therefore execute judgement-intensive processes -- this includes, but is not limited to, cyber security processes to reviewing third party vendors for potential risk, to helping analyze and visualize data for an upcoming filing or public reports.

2. Managed Service teams are not experts in my industry.

False. We hire and train employees as experts in both the sector and the task. Additionally, KPMG is filled with subject-matter and sector experts, whether it be health care, banking, insurance, Media, consumer goods, you name it. Managed service employees work shoulder-to-shoulder with advisory experts on solving a client’s problem across the entire engagement.

3. Managed Services are done in an office far from my executive office and/or core facilities. Therefore, handing work over to a managed service provider means losing control over how a task is done and quality assurance decreases.

False. KPMG’s centers-of-excellence house more than 5k managed services employees all over the world. Our global network is our advantage -- it is what makes managed solutions fast, flexible, cost-predictable, and able to cater to market-specific requirements all at the same time. We also provide a local KPMG layer of account support in the operating market, to ensure we are catering to market-level language and legal requirements.

Each of our facilities follow the same security requirements to ensure client data is handled with the utmost safety, and everyone with access is a KPMG employee, no matter which time zone they work in.

4. Cost Savings is the primary reason to use a managed service.

False. Well, it’s true that cost saving is a driving reason to use Managed Services -- Our scalable services can cut your total cost of operations by 15 to 45 percent according to our global performance data, without prohibitive upfront capital investments. But that’s just the beginning. Using our deep business and technical knowledge plus smart analytics and data management, we can take managed services to a new level, with new outcomes. They range from accelerated innovation and accurate forecasting to regulatory risk management, employee and customer retention, and agile adaptation to market change.

Accelerated business transformation is the surest path to sustain advantage, especially given today’s shifting market and regulatory landscapes. That’s why companies are looking for managed services to turn market-leading advice into operational excellence, on the daily. Managed Services at KPMG provides renowned people, process, and technology.

The best Managed Services providers not only offer back-office support, technology access and cost savings. The best can also provide services guided by function and sector experts, strategic advice, and judgment-intensive practices. That’s what makes KPMG’s Managed Services a leader.

We deliver services using a client-centered mix of onshore, offshore and nearshore KPMG professionals, all with specific skillsets. This delivery model provides clients with optimal and predictable hiring costs and decreases the time it takes to deliver results -- by utilizing KPMG’s global delivery network of people, available 24/7. Our delivery model caters to local legal and language requirements, providing these advantages to Netherlands-based companies that require a localized approach, such as the public sector.

We offer five solutions, all tested in-market by our firm and other KPMG member firms across the globe. Clients not only benefit from having KPMG’s market-leading experts working alongside their teams, but also share in KPMG’s top-of-the-line technology and data solutions. Our solutions include: