Are Managed Services Right for Your Company?
Posted September 18, 2017 in Articles
With the world’s introduction to “cloud” computing, many IT service providers began taking their solutions online. Instead of selling boxes containing CD-ROMs, they switched over to selling renewable subscription-based services that could be activated with the click of a button.
As these solutions became more complex, and as providers began customizing their Software-as-a-Service (SaaS) offerings to meet individual companies’ needs, we began to see significant growth of a new model referred to as “managed services.” With managed services, IT providers ranging from local tech specialists to industry giants like Hewlett-Packard, Oracle and IBM offer complete outsourcing and proactive management of companies’ IT infrastructures with the promise of increased efficiency, enhanced operations and a reduction in overall IT expenditures.
Managed Services: Key Considerations Before You Commit
While managed benefits can indeed offer these benefits under the right circumstances, they are not necessarily the best solution for all organizations. If you are considering managed services for your company, here are some preliminary considerations to keep in mind:
1. Total Outsourcing
With the right service provider and the right IT systems and internal company structure, managed services can result in total outsourcing of a company’s IT management functions. While this can be more cost-effective than in-house alternatives, it also means (i) layoffs may be necessary to achieve cost savings and efficiencies, (ii) your IT functions will be heavily intertwined with your chosen third-party provider. If your service provider does not meet your expectations, even setting contractual issues aside, disentwining and transitioning back to an in-house model or to an alternate managed services provider can be a difficult and costly exercise.
2. Service Level Agreements (SLAs)
In order to mitigate the risk of service deficiencies, companies can seek to implement comprehensive service level agreements (SLAs) as part of the contracting process. While many managed service providers offer standard SLAs, it is important to critically assess these to determine whether they are sufficient, or whether enhanced service level commitments will be necessary to keep your systems and operations running smoothly.
For large companies with substantial IT infrastructures, transitioning to a managed services platform is a project in and of itself. Companies considering managed services should make sure they have a clear understanding of what it takes to make the transition (and what level of support they can expect from their managed services provider during the transition process), and they may need to establish a temporary full-time transition team comprised of in-house IT personnel and outside consultants.
From different managed service providers to different levels of outsourcing and alternative solutions entirely, there is much to consider when seeking to enhance your company’s efficiency or use IT to gain a competitive edge. Before committing to a long-term managed services contract, it is important to make sure you have a clear understanding of the proposed relationship and the costs and benefits of the available alternatives.
Speak With a Consultant at Mithras Investments
Mithras Investments provides strategic consulting services to companies worldwide. If you are contemplating a managed services solution or preparing to enter into a managed services contract, we encourage you to contact us online or call (305) 517-7911 for an initial consultation.