Procuring managed services has traditionally been defined by an emphasis on finding a Managed Service Provider (MSP) with capacity and capability. But then you struggle to find skilled IT professionals, lead in product innovation, secure investment and drive down costs.
The question, then, is this: can you improve strategic initiatives with a shift to business value? This is critical in a volatile economic environment that has moved managed services from a business-as-usual (BAU) solution to a strategic effort that must support enterprise results.
In a 2020 survey, Forrester and ServiceNow found that service decision makers were looking to increase their investments in managed service to get a better understanding of their IT infrastructure and assets (40%), increase productivity (40%) and control costs (39%).
The bottom line is that that the success of your business depends on identifying and leveraging MSPs that can deliver business value aligned to your organisational goals.
The Role of Managed Services Has Changed
In the past, MSPs would run IT services and infrastructure for a business based on a break-fix model, where companies would contract an outside team to identify problems and resolve them as they happened. This outsourced model of managed services was focused on reactive fixes, technical issues and guess work. Now, to deliver value, companies need to change their services model to a proactive approach, where the focus is on measurable business outcomes.
Yet, the rise of managed services in the 1990s was deeply rooted in a reactive approach based on remote monitoring and task completion. The result for customers was long downtimes and a significant impact on worker productivity, which put revenue at risk.
In the 2010s, the advent of cloud led to increasingly complex services built on dynamic environments and waves of technology disruption were directly tied to the cloud. Managed services began to focus on how businesses could evolve their applications to meet both cloud demands and business strategies.
Now, enterprises are struggling to create digital roadmaps that mitigate the economic downturn as they face the twin challenges of skills shortages and highly distributed applications. Organisations must evaluate how cloud managed services can add strategic value to their business. Steve Hall, Partner and President of Information Services Group (ISG) said, "With inflation and the possibility of a recession looming, we think we’re going to have more enterprises turning to outsourcing their managed services to lower their delivery costs."
Because value is now measured by business results, companies need to use managed services to support strategic plans and protect revenue growth.
Four Critical Limitations of Conventional Managed Services
Conventional managed services limitation #1: Inadequate links between business and IT
Traditional managed services focus on reactive solutions that don't link the IT environment with end user experience and business outcomes. Teams end up with a narrow view of the service and don't always understand the impact on user experience, which results in poor customer satisfaction.
Conventional Managed Services limitation #2: Limited performance measurements
Companies must be realistic about what can be achieved with traditional Service Level Agreements (SLAs) that don't include business outcomes. SLAs have restricted the delivery of value by preserving a focus on behaviours and resources. For example, an incident occurs and is fixed in 15 minutes, which achieves the SLA. It happens again each Friday and every time the SLA is green. But the client experiences massive user disruption on a regular basis.
Related content: Evolve Your Managed Services for Business Outcomes
Conventional Managed Services limitation #3: Poor allocation of in-house talent
The problem with conventional managed services is that often activities are manually executed with limited automation because of lack of investment and specialist skills. This impacts the availability of skills required for strategic initiatives that are critical to business success.
Conventional Managed Services limitation #4: Lack of focus on digital transformation
Because traditional pricing focuses on technology and upfront investment, it prioritises short-term gains over long-term service stability, consistency with talent, flexibility and innovation. As such, there is a lack of focus on continuous improvement, team performance, training opportunities and new technologies for long-term wins.
Experts at Mastek have developed a whitepaper, closely examining how the continuous evolution available with cloud managed services can be a game-changing alternative to the traditional ways of supporting and maintaining digital services.
Download this whitepaper and explore how enterprises can access the full potential of the cloud with an MSP that takes on the responsibility of driving an ongoing shift towards new capabilities in a rapidly changing market.