Managed services have become more and more popular in the IT services landscape and this trend will continue.
Whether referred to as managed services, outsourcing, as-a-service or hosted solutions, this approach has been around for many years, at least most of it has, and it has become a lot more mature and sophisticated.
I am privileged to have been involved in outsourcing for many decades, from the beginning of my career, and have come to appreciate what matters most to ensure a successful and fruitful outsourcing experience.
The data processing world has changed rapidly over the past few decades. Technology has evolved at breakneck speeds. The complexity today would have been unimaginable in the 1980s or 1990s. Makes me wonder what it would be like in another 40-odd years – even more unimaginable.
This is probably one of the reasons why opex-based outsourcing / managed services are more popular than ever before. Highly-complex technology integrations require proven and reliable processes and specialised skills, and this in a skills-scarce environment.
There are a few fundamentals without which outsource agreements are likely to be average at best, and toxic failures at worst.
Many organisations thus turn to managed service providers because they simply don’t have the expertise or ability, or the desire to acquire and retain these non-core skills.
By now, most organisations have begun their digital transformation journeys; those who lag will lose out to more efficient and progressive competitors. The relentless and competitive pace of business, combined with the absolute need and value of digital transformation, necessitates trust relationships with key ICT sourcing partners.
Having access to experts to manage large and complex ICT environments with skills, processes, tools, innovation and transformation enables businesses to leverage ICT and focus on strategic business objectives that will grow their business.
There could be many opinions about what is key to a successful long-term outsourcing or managed services partnership. In my opinion, there are a few fundamentals without which outsource agreements are likely to be average at best, and toxic failures at worst.
As mentioned in the headline, there are many similarities between outsourcing and a marriage. The process of finding, courting and getting to know that potential outsourcing partner is a process that is sometimes reduced to a technical and clinical analysis, that does not necessarily consider the alignment of culture, values and partnership loyalty, which could make or break the partnership in tough times.
I have mentioned the pace of change − flexibility is key to accommodate change. There must be a willingness on both sides of the relationship to commit to being flexible. There must be courage to admit when the service level agreement or scope is not serving the relationship or addressing the business needs.
Both partners need to be able to change and tweak to achieve desired outcomes with the least financial impact on either partner.
This means that businesses would do well to seek out partners that don’t just provide an IT service − they should seek out suppliers that genuinely want to be partners in business.
Another key ingredient is the depth and breadth of skills and expertise available. Seek out organisations that have diverse teams and varied subject matter experts that can provide the best counsel, in addition to technology expertise and service delivery.
What is not always considered is how an organisation owns up and recovers when they may fail in an element of service. Referencing the ability and willingness to be vulnerable and transparent, to restore failure and continuously improve is key.
Think about it. Many tier-one providers can do the basics. They have the correct experience, certifications, partners and licences. They have track records that may boast of capability and compliance and can even demonstrate innovation.
This is actually expected − you shouldn’t even be having the conversation if those boxes cannot be ticked.
However, in many decades of experience, the true differentiation comes through culture, values, customer centricity, flexibility and the willingness to treat a partnership like a long-term relationship, anchored in the same principles of a marriage: honesty, integrity, trust, vulnerability, transparency and commitment.
In my opinion, the alignment of culture, values and the abovementioned principles should be heavily weighted in the evaluation criteria for an outsourcing partner.
And so, if we consider that compliance, licensing, innovation, track record, cost and a host of other hard measurables are important, but only part of the picture, we begin to appreciate how finding a partner that matches your culture and values, is flexible and has exceptional depth in talent, is equally, if not more important, to the long-term success of an outsourced service provider agreement.