Debunking the myths of managed services

Johannesburg, 06 Dec 2018
Organisations whose core operation is not IT, need to become comfortable with the idea that it is not strategic to keep IT in-house at an infrastructure level.
Organisations whose core operation is not IT, need to become comfortable with the idea that it is not strategic to keep IT in-house at an infrastructure level.

Businesses are under mounting pressure to digitally transform, which means that managed service providers (MSPs) are no longer just about 'systems integration'.

So says Dimension Data's Transform Business Development Manager, Grant Morgan, adding that businesses now recognise that MSP solutions can offer far greater strategic value and insight.

However, he says several myths about MSPs remain, specifically relating to service quality, costs, and the risks associated with IT systems integration, which are out of date.

"When a business employs managed services to deliver on its strategic goals - as opposed to just implementing a systems upgrade - it has the potential to create a competitive advantage and transform its market position."

For Morgan understanding and debunking the myths of managed services is the first step:

Myth 1: Managed services are expensive.

One of the main reasons an organisation will consider moving to a managed solution with an IT service provider, is to downscale costs. However, there is a misconception that managed services are more expensive than in-house services as the provider has to make a margin.

The reality is that most organisations do not have the resources to invest in automation tools and capabilities to focus on the digital transformation that will give them a competitive advantage. MSPs can offer a far higher level of expertise compared to in-house IT departments, as this is their core business. Consequently, the efficiencies created, and value of technological insight applied to improve functionality of processes, is often of much higher value.

Myth 2: Moving from an in-house IT department to a managed service can put my business at risk.

Often, the transition from an in-house IT department to a managed service, implies a certain level of risk. However, the modernisation of MSPs means it is now possible to mitigate those risks.

A modernised managed services transition methodology can take approximately three months to implement. But the optimisation of processes and functions delivered by MSPs means companies can then review their structures to ensure the technology implemented sits within a suitably organised operating environment, thereby reducing costs to the business in question.

The other development with the modern approach to managed services, is that it comprises a human resource component, whereby the current workforce can benefit from a knowledge transfer process, and can be upskilled in the new technologies.

The result is, that once a seamless integration has taken place, processes will be improved, employee roles will be defined, and employees will be provided with improved tools to execute on their tasks. Ultimately, this will mean that end users - whether they be employees or customers - will receive better services.

Myth 3: The quality of service delivered may be compromised because the organisation does not have complete control of IT operations.

Naturally, service quality is high on the agenda when a business employs a managed services provider. But handing over control of the systems integration is less risky than managing it oneself.

The advantage of an external provider, is that managed services is its core business. To this point, external providers constantly keep up with the pace of change in the technology industry, frequently upskilling on the latest tools and solutions that will best fit your organisation.

Furthermore, he adds that as an external service provider, MSPs must be measured against a defined set of service levels. And service level agreements (SLAs) set up at the beginning of a relationship, allow the business in question to set performance metrics and deliverables, and clearly define what it expects and needs from its service provider.

"In addition, the MSP has access to technologies and tools that can measure real-time end-user satisfaction, as well as real time dashboard to instantly detect if there are any issues within the infrastructure itself. This level of visibility and transparency enables a CIO to be in more control of his operations."

To this end, relinquishing some operational control to an expert service provider can help ensure the organisation can continue to focus on its core business, ensuring it continues to meet its targets and customer deliverables.

Myth 4: South African businesses are not utilising managed services at the same pace as global organisations.

A BCC Research report states that a number of factors are limiting managed IT services growth in emerging markets such as sub-Saharan Africa. However, the good news is that SA is not that far behind from its global counterparts and growing at reasonable pace thanks to the infrastructure support provided by many service providers in this market.

This is supported by research and advisory firm BMIT's preliminary estimates of the IT market for 2017, which cites that managed services and custom application development are standout growth categories, despite leading system integrators battling to achieve organic growth in a struggling economy in SA.

However, a constant concern in the current economic climate, and particularly in the public sector, relates to the potential for job losses. Employing managed services does not necessarily mean job losses. Rather, it can translate to a transfer of skills, which facilitates greater career growth for technical people; as well as skills development when employees are required to learn new programmes or platforms. Together these benefits can improve the capability of a workforce and ultimately, its competitive advantage.

Myth 5: It is difficult to measure the value of managed services in an organisation.

When measuring the value of managed services, vendors tend to focus on just the SLAs and overlook broader business outcomes.

The outcomes of the systems integration process should lead to real business benefits, where the solutions delivered by the MSP directly support the business growth objectives. Initially, MSPs will support by implementing systems and processes that streamline business operations, but ultimately this should lead to increased productivity, improved data security, and cost efficiencies that allows your business to reinvest and prepare itself towards its future.

The most effective way to do this is to tie the SLAs back to the business outcomes to determine value. This will not only determine value beyond rands, in an ideal world, it can help set the tone to identify future growth opportunities and direction.

Morgan feels that the reality is those organisations that still view managed services as a hindrance to both their purse and their growth are missing out on the strategic benefits to their business.

"Organisations whose core operation is not IT, need to become comfortable with the idea that it is not strategic to keep IT in-house at an infrastructure level. In fact, leveraging expertise where they exist makes good business sense - even if that expertise sits outside your organisation."

The benefits of MSPs that directly contribute to creating a competitive advantage include downscaling costs, SLAs, access to expertise, skills transfer, and a modernised infrastructure facilitating an ability to scale. All of which become exceptionally high value when taken together.

Ultimately though, it is down to the business in question to choose to make their engagement with the MSP of high strategic value, instead of it being a transactional relationship for infrastructure installed. This is when organisations can use MSPs to create a real competitive advantage.