The concept of Managed Services is nothing more than providing a service or process in a continuous mode. Outsourcing, a term which needs no explaining in this day and age, is what the concept of Managed Services should be associated with in the first place. An enterprise using this kind of service entrusts an external company with a permanent service (specified by time and efficiency conditions) of a separate process, function, or the entire area. The aim is to improve the efficiency of the process and to reduce and control operating costs while maintaining the high quality of services.
What are Managed Services?
The Managed Services model is already used in many industries, including HR, manufacturing and IT, and is becoming one of the most important and fastest-growing segments of services. Another important issue here is security – often an external, specialized company can provide not only the appropriate conditions for achieving better results, but can also better ensure the security of access to data.
Due to growing interest from managers in this model of cooperation, the topic is becoming increasingly popular on European market. Based on the experience which I have gained at JCommerce, I would therefore like to introduce readers to the concept of Managed Services.
Managed Services as support for IT governance within a company
The Managed Services model has a wide range of potential applications. The simplest indicator of the moment at which it is worth considering the introduction of Managed IT Services is the implementation phase of the new system. After building the IT infrastructure and the commencement of system operations, it is necessary to conduct maintenance on the new system. It is precisely at this point that Managed Services start to be used, the aim of which is to take care of the area indicated by the customer, e.g. to ensure the continuity of the company’s ERP system or to ensure the smooth functioning of business intelligence systems.
Managed Services, in terms of support for business, cover a wide range of services and can encompass every part of the company’s IT system. The main tasks are to manage and maintain servers, infrastructure, applications (ERP, CRM), and data processing systems and to cover the crucial area of daily management of technical support services. In addition, the range of services can be extended to the Help Desk and Service Desk. Additionally, the variants of service provision by the service provider, offered by the market, are also beneficial to the customer. Support services can be carried out on the customer’s own technological background or in the form of a model in which the supplier is fully responsible for the supply and maintenance of solutions, as well as for providing the environment and infrastructure.
Why are Managed IT Services worthwhile?
As I previously mentioned, the range of services is very wide, but it is worth mentioning the benefits to the customer. It is worth looking at them through the prism of the challenges facing today’s IT departments in Europe. As indicated by the C-Level report “Managed Services – A new trend on the outsourcing services market”, increased operational efficiency, optimizing IT processes, reducing operating costs of IT infrastructure, access to new technologies and skills, and higher service levels are all still among the most important IT department tasks.
This goes to confirm the apparent trend for many companies to move away from the physical ownership and management of their resources, towards the transition to using an external partner to maintain the environment or IT system, either in part or in its entirety. Such decisions in particular are facilitated by the growing popularity and understanding of cloud services – where the issue of physical possession does not arise, and the technology is fully prepared to manage applications in a secure and efficient manner from any location.
Regardless of the area of IT, or the degree to which the company decides to embrace Managed Services and what type they choose, we can identify some common benefits for companies which opt for this solution.
Again, I will refer to the experience of JCommerce, which offers support to its clients through the management of various IT platforms. Using the Qlik application (which is a Business Intelligence tool supporting reports and analysis) as an example, we can illustrate the complexity of the operation and maintenance in the smooth operation of the given IT solution. How? Well, Qlik gives users the ability to scale and to create a wide variety of reports for all the company’s departments and facilitates the customization of the tool to the individual needs of users. Any large-scale expansion of the functionality of the Qlik platform therefore requires constant monitoring and development. By opting for Managed Services supporting this type of application, we can gain the following benefits:
- Increased efficiency of the system, applications, and the IT department itself, which has the possibility of concentration, e.g. on the development of innovation in the company, or better support for the launch of a new product,
- High level of flexibility and scalability of resources, which the organization does not possess, with the possibility of expanding solutions in step with changing business needs,
- The possibility of accurate cost planning and accounting for a tangible effect based on the SLA (Service Level Agreement) conditions agreed with the supplier.
Based on the experience of our customers, the decision to cooperate with the Managed Services provider is influenced by several criteria, the most important of which is the particular area of specialization of the supplier, for example Managed Services for data centers, services pertaining to the management of ERP applications, Business Intelligence, website and technical support services in a diversified IT environment within the company.
The growing popularity of Managed IT Services in Europe
The Managed Services model is relatively young and just starting to gain the confidence of entrepreneurs. There is nothing surprising in this, because it results from the evolution of the use of outsourcing services. After the phase of outsourcing technical resources to support the implementation of IT, business is becoming increasingly ready for the next, more advanced forms of cooperation with external partners. The European entrepreneurs takes an ever bolder approach to the possibility of transferring control over a given area of their business to an external provider, despite the objections and doubts related to this process. In this case, a few key questions may help in the decision-making process:
- Do you control the increase in costs of IT infrastructure in your company?
- Do you engage an excessive amount of internal IT resources in tasks which can be classed as maintenance, rather than development?
- Do you observe a seasonal increase in your use of IT professionals, or can you not predict the need for their involvement?
- Does your IT system require development, frequent repair or performance monitoring?
- Are unusual competencies, not readily available on the market, required in the maintenance of your IT system?
If reading this article has already raised similar questions, it may be worth taking a closer interest in Managed Services. It is worth remembering that the model of cooperation which we have described transfers the risks and costs of managing IT systems to an external supplier. In order to improve efficiency it also assumes the responsibility of IT system management, freeing up the customer’s internal IT resources. Another advantage is the fact that it is the customer that specifies the expected effects of cooperation together with the supplier, and indicates the critical parameters.
Why companies need Managed Service Providers?
In summary, Managed IT Services are not a new tool as such, but in some countries it is visible that significantly growing number of companies have started opting for this form of taking care of IT solution. As with anything new, it involves some uncertainty and risk; however enterprises looking for new solutions and optimizing management costs are increasingly turning to the outsourcing model. Of its many advantages it is especially worth mentioning that this is a bespoke solution, and the enterprise has the ability to assign the most problematic issues in the area of IT infrastructure maintenance to external specialists from a managed service provider.