26 Oct Do Managed IT Services Kill Innovation?
For a while, it was popular to outsource your IT services. You could access shared IT resources offshore at a fraction of the cost and reduce your total cost of ownership. Pretty quickly, outsourcing became synonymous with offshoring and it developed a reputation. Bad customer service was common and staff and customers weren’t buying it.
So the IT services industry reinvented outsourcing by giving it a new name – managed services. In addition to reducing your cost of ownership overall, it convinced customers that this was a better alternative than hiring highly technical people in-house to deal with complex technology. The new contract model promised everything, rolled up in a convenient monthly fee over several years.
Are managed services still relevant?
In reality, technology has changed the game and your managed services contract might not reflect this. Next generation technology is easier to work with, with controls and automations that reduce the time needed for systems administration. It’s now possible for junior technical resources to deliver outcomes that previously would have required more skills and experience. Some managed service providers know this and take advantage of it, capitalising on driving down the cost to them to deliver your fixed fee service. But you can take advantage of those same technology advancements in-house, increasing your agility and rebuilding your team’s expertise.
If the technology has changed so much, is it still fair to pay money to a managed services provider if you could now achieve the same results yourself? Take a look at all of your current technology options. Software as a Service offerings and plug and play enterprise technology used to take years to realise value from – now that happens in days. Can you remove that third party layer from your core business applications and speed up your time-frames and ability to innovate?
If you’re an IT partner, building a managed service used to seem like a good idea. Unfortunately, by the time you’ve built a practice, selected the products and set your pricing, your potential customers may have already moved on. Cloud software vendors especially are releasing products and capabilities to market so fast that your bundle may be out of date in months, let alone the years still left in your contract term. It’s back to the drawing board again, carving out a new plan so your customers still feel there is value in your offering over and above what they could do themselves.
When managed services slow you down
From a customer perspective, working with an external provider can be a time-sucking hassle. After you’ve played the game of logging a new support ticket, it could be 36 hours before someone gets back to you with a suggestion, let alone finding the actual solution. You’re looking at least 3 business days just to solve a simple problem.
Service level agreements prioritise urgency over how easy something may be to fix and an in agile business world, waiting 3 days just doesn’t cut it. Unfortunately your organisation isn’t going to spend more on a managed services contract so that your low priority 10 minute fix is implemented even within an hour of your logging that support ticket.
Why wouldn’t you take ownership of managing these kinds of requests when it’s so easy to do? Customers who are working with inefficient managed service providers have accepted these long time-frames, safe within the walls of those comfortable, measurable SLA but totally dis-empowering to their business.
Modern, growing businesses have the ability and the flexibility to do great things with their in-house technology. They have room to fail fast and trail blaze. IT decisions have to be quick decisions in this age of rapid change, so it doesn’t make sense to lock yourself into anything for two years. It is possible to lead with plug and play technology that’s easy to manage in house and gives you the agility you need to respond to both business and technology changes.
Solista offers next generation technology that delivers results, but can be maintained by a junior IT resource in your organisation. Take a look at that outdated managed services contract and see if it really stacks up with today’s speed of innovation.