Managed metadata is useful in situations where there is the need for consistent application of terms across an organization. This is often the case in professional services organizations. For example, a large, globally dispersed consulting organization might want to track projects and consultant skills so that expertise can be shared and reused across the organization. Managed metadata applied from an authoritative taxonomy allows them to ensure consistency across the organization.

Managed metadata makes it easier to find information about their projects and expertise because it improves the search results they will get, as well as providing the taxonomy's structure for navigation in document libraries. Additionally, managed metadata can be shared across SharePoint site collections in large organizations.

Industries such as financial services, legal, pharmaceutical, and health care would also typically be able to benefit from managed metadata infrastructures, as would organizations subject to government or industry regulatory requirements.

Normal metadata that is applied with unmanaged keyword fields, tags, ratings, or notes is more appropriate in situations where flexibility is more important. For example, in product development or media organizations, new terms might need to be incorporated easily. In those situations, the more rigid structure of managed metadata would be a hindrance to adding new terms and ultimately being able to find information based on them.

Unmanaged keyword fields allow you to enter other data types such as date and time, calculated fields, and usernames that would not be available with managed metadata.

Managed metadata, on the other hand, provides greater security. Entering new terms can be restricted to specific groups of users or roles. The display of some metadata may also be restricted. For example, human resources may want to restrict metadata that relates to salary grades so that only managers or HR personnel have access.