Once a company sets out down the managed services path, it is almost impossible for it to return to an in-house set-up without incurring significant costs and end-user disruption.

That's why companies need to establish at the start of their outsourcing journey what operational benefits they are trying to achieve, according to Paul Crowe, a managed services specialist at Logicalis.

"The value of outsourcing is all about improvement, but many companies struggle to define their objectives upfront," he says. "To enjoy the best possible partnership with a managed services provider, expected improvements need to be clearly established and agreed by both the customer and its provider."

Most organisations look to achieve one or more of the following benefits from outsourcing, he says:

RELIABILITY/AVAILABILITY

Most outsourcing contracts are run under service-level agreements, in which the customer and the service provider record their common understanding about services, priorities, responsibilities, and guarantees, says Crowe. From the start of the contract, the managed services provider carries the burden for ensuring these are met, relieving the customer of that responsibility.

PEOPLE

In-house IT teams work under considerable pressure and can end up spending much of their time managing existing systems, rather than planning and developing new ones that will give their companies significant strategic advantages over competitors, says Crowe. Companies that know how to outsource well can transfer much of the management burden to the services provider, freeing in-house staff to focus on more valuable work. It can also lead to improvement in IT staff competence and availability, as well as higher levels of staff continuity.

SKILLS

The range of skills required to run an effective IT department is broader than ever, and few organisations can hope to find them all in-house, for reasons of both availability and cost. Managed services contracts enable them to access the skills of a third-party specialist - both for older skills that are on the decline in the general IT labour pool (mainframe programming languages such as Cobol, for example) and for newer, emerging skills.

AGILITY

The agile business is one that is capable of responding at speed to changing market conditions and dynamic customer requirements. A managed services provider's main objective is to keep abreast of emerging technologies, products and threats, so that it can help its customers stay one step ahead in planning its IT infrastructure in a business world where the only certainty is change.  

COST

As the outsourcing market has matured, reducing operational costs is no longer the primary objective of companies considering managed services - but it is still vital to them to optimise the money they spend on IT and to direct new investments at projects and implementations that will benefit them most, he says. Managed services can also make a major contribution in increasing the predictability and containment of IT costs, along with reducing capital expenditure.

Your Comments and Questions

Paul Crowe, 5 months ago

Hello George. The communication of new ideas and developments within the ICT sector will always take place informally as 2 organisations get to know each other. This process tends to accelerate around specific projects, as we are always keen to ensure that the most effective system/service is proposed in meeting customer requirements. However, in some cases there will be a requirement, reflected within the SLA, for us to share our market/technology knowledge with our client on a regular basis. In short the SLA is completed by both parties working in partnership and will cover the activity, process and technology required by our customer in order to deliver to them the optimum levels of service and business advantage.

George Black, 6 months ago

Hello Paul, your comment about providers striving to keep abreast of new developments and passing their knowledge onto their customers - should this be defined upfront in an SLA (or is it indeed a factor that by its unpredictable nature cannot be pre-defined in a contract)?

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