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Issue Date: October 2007

Manage your service, do not just outsource on a whim

25 October 2007
Robert Sussman, joint MD at Integr8 IT

The managed services business model, as applied within the information technology space, has redefined the traditional practice of outsourcing essential services.
Today, service and delivery in this ultra-competitive sector is outcomes-based, and heavily dependent on proactive response. Essentially, effective and meaningful action speaks much louder than any words of promise or surety.
A typical managed services model is designed to produce a pre-defined service. In other words it prescribes what services are included in the offering and what the outcomes are associated with each service. This is usually done on a fixed term basis with the guarantee of performance in the form of feedback.
In the managed services arena the issue of accountability is addressed from the outset. That has not always been the case within the outsourcing space.
However, it is not enough for a managed services partner to list the deliverables and levels of responsibility. The partner in place is accountable to provide all components of the service offering.
The managed services model is increasingly being adopted within the ICT space because it lays down the rules of engagement, so to speak. There can be no discrepancy or misunderstanding if all parties agree to the managed services outcomes. Failure to deliver on these deliverables should - and normally does - incur penalties.
In this respect the ICT industry has matured quite substantially. It is an aspect that all stakeholders must take into consideration. Resellers, for example, must take cognisance of the importance of the service level agreement which assists in regulating outcomes.
Furthermore, in terms of skills development, recruitment and training, the trend in the market is to hire established, experienced business people and training them on technology. The onus is on managed services partner to have all the necessary contracts in place with partners and service providers to ensure that the entire spectrum of services is covered.
This level of strategic operation is necessary in order to ensure that all stakeholders benefit from market development and emerging trends. The focus on hosted services is a strong example.
There is renewed interest in hosted messaging platform in South Africa and this is due, in part, to the increase in bandwidth availability and more attractive costs thereof.
Additionally the local market remains influenced by regulation governing e-mail archiving and retention, as well as outsourced messaging services, managed networks. There is a continued interest around WAN to VPN migration in terms of outsource management.
The user has come to expect a comprehensive experience from outsourced partners. This is reflected in the emergence of SaaS (or software as a service). Investors are keen to leverage off what is essentially a by-product of development and growth driving the local telecommunications and ICT markets. Service providers that are outsourced now have to deliver a more rounded, comprehensive offering. There is simply no longer any room for traditional means of outsourced services.
The fact that the old 'bodyshop' approach no longer adds any real value is not really news. This approach is loosely defined as service providers simply completing projects and managing environments without any specific outcomes.
The writing is on the wall, so to speak, with regard to 'generalised software services' - it has to be software with services, and nothing else will really suffice. Hardware is no different. The impetus is on technology with service - so naturally hardware will follow the software route and the service providers have to take note.
The IT market moves in 10-year cycles and operators have to become intentional and predictable. The legacy of vague, undefined services belongs in the past. The extent to which the industry grows and the level of innovation that now defines business and trade reinforces the idea that failure to keep up with external changes and adapt accordingly, can only end in despair.
There is pressure to perform and adapt to a unified and virtualised environment, and this requires that businesses identify and build upon whatever it is that differentiates them in the market. But it is important to remember that strategy without execution and follow through is like experiencing a mirage in the desert - there is something there but it is not tangible.

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