What is Managed Service?
It is nothing else that services outsourcing. Its essence is transferring responsibility for a selected area to an external vendor. This may apply to an app or system, but also infrastructure as well as one or many processes. From my experience, I know examples of Managed Service that includes various activities. In one company, an external vendor was responsible for the comprehensive printing service.
It may not be a classic example of Managed Service as, in the first place, it is associated with supporting an IT system. However, it shows that this service has no limits established in advance; there is no predefined minimum scope of services or an area for which Managed Service has sense and it pays off to a company. It does not depend on the size of a system or the number of its users. What is included in outsourcing, is determined by an agreement between the parties.
Among others, Managed Service for a security area is becoming more and more popular. At first sight, it may not be that obvious to delegate the responsibility for such a strategic field to the outside. But the security area is difficult and requires expertise. That is why there are many offers on the market and there will be even more.
Is this the right time for Managed Service?
An optimal moment to implement Managed Service in a company may be launching a new system. It can be treated as a natural consequence of cooperation with the implementation partner – specialists who implemented an app know it best; it can be given to them without any risk.
Still, it is rather a textbook example. Rarely, a vendor is in a perfect situation where they get a new system with a maintenance request. In reality, companies more often reach for Managed Service at the last moment, and the vendor enters the eye of the storm. Then, both process issues (find out more about the optimization of processes) and those related to communication in a company should be solved. However, such a situation can (and definitely it is worth being) avoided.
What signals are evidence that it is time to use this service? Usually, these are:
- Insufficient resources – company operations start to focus on the IT area instead of business development.
- Issues with cost control.
- Seasonal employees’ involvement.
- Technological niche – to maintain service, non-standard skills are needed.
Sometimes, the signals are already visible, and yet the outsourcing decision is delayed. There are two reasons for that. The first is a lack of readiness. Do you like letting strangers into your house? Not really? In Managed Service, you have to not only let strangers in but also show them around the company and explore every corner including those dusted ones – usually, the root of all problems. It is not a comfortable situation.
Ignorance is the second reason. What areas choose to outsource to Managed Service? Ideally, the customer’s expectations should be specified – in practice, it is not so obvious and rarely happens. The customer sees that something is going wrong in the company, there are gaps in specific areas, but what is the scope of possible support – it is not known. If you are struggling with this decision right now, I want to comfort you: establishing the scope is not a simple matter at all. That is why the vendor comes with help.
Managed Service implementation – step by step
How should the model implementation project be processed? My tips will be useful, especially if you are just planning to work with Managed Service.
- Preliminary assessment of needs, meaning possible scope of support that the company expects.
- Cost analysis and budgeting of the service.
- Market research: searching for suppliers, checking offers, cooperation models (will this model be worth it?).
- The suppliers’ preliminary selection is based on seniority, experience, recommendations.
- Initial contact with the supplier.
The moment the communication starts is crucial. It allows us to assess the responsiveness of the supplier, learn details of the experience in implementing the solutions we are interested in, as well as to look at the cultural communication (which proves the whole company’s culture). Above all, however, you can quite quickly deduce what kind of help we can actually get, that is, whether the vendor offers consultation or seeks to sign an agreement right away. If the supplier declares: “We are going to get into action offhand, we will give you everything you want, the sooner we sign the agreement, the better.” – it is a sign to stay away from such a supplier.
Managed Service is not a 24-hour emergency service or a goldfish that meets all customers desires. Possible cooperation must be preceded by an analysis of needs and situation in the company – this may take time. A reliable partner, instead of signing an agreement as soon as possible, will propose a series of meetings to delve into the organization’s situation and find the source of the problem. Perhaps, the partner will specifically determine how many man-days are needed for the analysis. In a word, they are not selling you the product, but want to find a solution. Negotiating prices and signing the agreement is the next step.
Choosing a partner is also important as Managed Service is not based on setting the price and signing a single-use document– this is only the first step! Managed Service means constant contact and continuous, usually long-term cooperation. In some time, it will probably require the agreement review and the definition of new conditions adapted to the current situation and changed needs. Open communication is essential for good cooperation.
Benefits of Managed Service
The Managed Service’s core is the transfer of responsibility to an external supplier, which in itself is an advantage. This gives us more space (resources, time) for our operations. Cost optimization is the third most important benefit.
However, when deciding to join Managed Service, one must be aware that despite the great advantages, it is not pure profit which is often misinterpreted. Coming back to the competence gaps example: when there are staff shortages, we decide to choose Managed Service, hoping that the problem will be resolved.
Yes and no. I meet the approach that outsourcing is a full responsibility commitment (and a complete solution to problems), which I do not completely agree with. There must still be people on the customer’s side who will coordinate and supervise the cooperation with the supplier, as well as maintain regular communication.
This would be the most convenient. Managed Service will fill our gap; we will not worry about anything anymore; it will not require people, time, and as such, it will not cost us anything. Unfortunately, it does not work that way. You will still need people to supervise the Managed Service implementation and participate in all stages – from establishing the scope, through negotiating the contract provisions, then monitoring the KPIs, and communication with the vendor.
Similarly, a clear view is needed to assess the potential benefits resulting from the type of signed agreement. Managed Service most often comes in two basic variants: as a subscription service (with a fixed monthly fee) and as an on-demand option (then, the supplier is available when an ad hoc need arises).
The advantage of the subscription is, of course, repeatability. We are bound by the agreement. We know that the fees will be fixed and this helps to plan the budget. But this is both an advantage and a trick, because… you can overpay. Is there so much work in a given area that you need the same contribution every month? Do we need expensive experts permanently or is their ad hoc support enough?
We will return to the topic of Managed Service in the upcoming articles.
- Service Manager
Since 2013 in the IT industry, since 2017 holding managerial positions. Responsible for optimizing IT work, defining, measuring, and monitoring KPIs for the IT team, implementing, modeling, and supporting ITIL processes, managing internal and external IT contracts (including legal, financial, and compliance aspects). She has been working at Craftware since August 2020. Deeply convinced that the only constant in the IT (and not only) is the change, and effective communication can save lives. In her free time, she runs an informal board game club and participates in 17th-century historical reconstructions.