Managed services (when done correctly) are a proactive approach that helps companies avoid big problems that might negatively impact the customer experience or expose the company to cybersecurity problems.
The growth of cloud services are paired with the rise in cybersecurity threats, and the need to create a digital organization is pushing demand for IT services. This demand is so great that an IDC report titled “2017 Global Digital Transformational (DX) predicts $6.3 trillion in digital transformation investments between 2017 and 2020. This staggering amount is forecast to include $2.6 trillion just for third party services who have experience in the applicable technology areas, can implement digital capabilities, and possess the right personnel skills.
Managed services is a model of outsourcing that covers all of the functions of IT, where the provider is taking over some of the client’s technology decisions (that are of course informed by the client’s needs). The role of the client in this arrangement is largely to review the overall processes, while they trust the expertise of the managed services partner’s staff to perform.
Handling the Talent Gap
In North America there’s a massive talent gap for finding and training qualified business IT support staff. According to the IDC digital transformation report, 69% of the surveyed respondents noted they lacked the right people, knowledge, and technology to transform their businesses. The report also noted that in response to this talent shortage 94% of the respondents are looking at third-party firms or seeking to hire new staff in order to drive transformation.
Managed services provide a way for firms to utilize expert help that works on-demand for maximum productivity and cost efficiency. It creates a winning dynamic for the client as they can receive talented guidance on important tech services at an attractive price point. The client can focus instead on the customer experience and revenue-generating projects, and allow the tech consultants to manage the back-end processes and systems. [Article: Staff Augmentation vs Managed Services]
Firms are increasingly seeking managed services to perform routine and manual tasks that pull too many human capital hours. These staff augmentation strategies include deploying new networking hardware that can be outsourced and managed by a remote partner who would understand how to apply policies to the hardware and how to best configure the devices for the client’s needs. Another example is collecting data from client networks and then proactively advising the client on potential issues that might slow the network.
A significant benefit of utilizing a managed service provider compared to hiring additional internal staff is knowledge retention. There’s no employee turnover problems with an IT consultancy, as the vendor keeps all client information on file. They also possess a knowledge base about implementations and projects conducted with other firms, which provides a value-add for clients who have especially complex project requirements.
Enabling DevOps and Continuous Enhancement
The lofty goals of companies to put in place digital initiatives is simply beyond the capabilities of internal staff. They need help to conduct enterprise-wide digital change management and managed services partners are now called upon to offer much more than strategy advice and monitoring the network, they also offer guidance on operational matters and how technology can improve the company’s overall strategy.
The best consultants will provide roadmaps for continuous enhancement of a client’s digital offerings. They’ll understand the latest features and business requirements, and understand how to get clients ahead of competitors in terms of their digital assets. Clients that are planning digital projects should employ talent requirements into their plans, so they can understand their gaps and proactively plan for managed services, instead of trying to “go it alone” and discover a glaring talent shortcoming.
Managed services are also taking over DevOps due to developers looking for a simplified way of managing their tool sets and infrastructure. Instead of performing tasks such as installing databases and managing up-time and redundancy, these headaches are removed, and developers can focus on creating software. The availability of cloud-based platforms such as Amazon Web Services is enabling this dynamic, where DevOps is less needed as part of a continuous deployment process. And with the cloud, all of this can be accomplished cost effectively.
Many managed services providers offer fixed monthly costs that do not fluctuate unless the client’s requirements materially change. This fixed structure provides companies with a budget number for IT that’s repeatable and manageable. Instead of trying to dynamically hire staff at a premium (due to the overwhelming demand for their services), companies can instead take on staff in connected departments to work on revenue generation. It’s a better approach then the normal reactive way companies face IT projects, where they fix issues only when they’re broken, and each problem is addressed individually. MSPs provide a more holistic outsider’s view, where the entire digital enterprise is under review and can be fixed.
Managed services also frees staff from IT concerns, giving them the confidence in the systems and platforms they need to get work done and meet client needs. MSPs can also remove processes that it deems are not helping the client reach its goals, whether they are simply unnecessary or built upon outdated technology.
MSPs are also seeing cost savings for themselves through the cloud, as they can offload the management of data centers and various IT services to trusted cloud partners. They can streamline their operations and then focus on providing more value-added services and reduce their own costs. The resulting better margins for the MSP can then result in lower costs for clients.
Managed services is poised for explosive growth in the coming years, as firms must continually keep pace with change, and provide customers with seamless and multi-channel experiences that are only possible through the latest technology. MSPs are increasingly moving away from the on-premises model, and instead becoming next-gen cloud-based providers that are migrating workloads to the cloud. The top MSPs offer expert teams who understand how to shift entire operations to digital processes, and do the work at an attractive cost.
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