Managers become necessary once you've got a record deal and you need an advocate to represent your interests at the different departments of a record company. They help to coordinate efforts and get maximum results at radio, retail, and publicity. Many labels will want an artist to have a high-powered manager before a record is released and will often recommend top managers.
Managers can also help in shopping you for a record deal, but only if they have the connections to get your music to the right people. It's not impossible, but friends, family members, or acquaintances with no music industry experience usually aren't going to be able to get through locked industry doors, and will probably be in over their heads even if they can get through.
Good managers help the artist assemble a competent team of professionals to handle various aspects of the artist's career, including an attorney, a business manager (for financial affairs), a booking agent (for live performances), a merchandising company (for t-shirt sales, etc.) and more. Experience counts for a lot when it comes to choosing a manager.