Does Managed Services Still deliver in 2023?


Managed technology services have been around for a long time. Organizations, large and small, very often outsource the run and maintenance of their information technology systems to service organizations who have the specialized capability in that space, especially when they can give advantages such as reduced costs of operation, higher efficiencies and continuous improvement. By outsourcing the management of IT services, organizations usually free up valuable resources for other tasks, as well as increase overall efficiency, making them a great option for a range of organizations.

But, do managed services still deliver the same benefits for businesses today? This blog post will explore the benefits of managed services, how they have evolved over the years, and if their use is still beneficial to businesses today.

As technology advances, businesses have more options than ever to manage their IT operations. Managed services have been around since the early 2000s and continue to be a popular choice due to their ability to provide increased efficiency and cost savings. They allow businesses to outsource their IT operations to a trusted provider, freeing up valuable resources that can then be used on other tasks. However, with new technologies emerging, the question of whether managed services still deliver the same benefits is an important one to consider.

1. What have been the promises of Traditional Managed Services?

  • Reduction in Cost of Services over time

Traditional Managed Services have always promised a steady reduction in the cost of services over a given contract period. This is achieved by many methods including low-cost but highly trained resources, developing and maintaining a strong knowledge base, streamlining processes for speedy response and resolution, proactive problem-solving, and so on. They also focus on structured change control and quick fixes and work arounds that help in maintaining the high availability of systems.

In addition, the service provider may also offer insights and advice on how to better utilize the IT infrastructure, leading to improved efficiency and cost savings in the future. Furthermore, a well-managed service also ensures that the IT infrastructure is kept up to date with the latest security patches and updates, thus providing greater security and stability.

Ongoing cost reduction can also be achieved through the uncovering of inefficiencies within the existing process and the implementation of new, cost-effective processes. Additionally, automation and virtualization of certain functions can offer further savings in cost and time.

Team size optimization by reducing tickets and errors. This is achieved by focusing on the root causes of tickets, errors, and incidents, and by identifying and making adjustments within the existing process. This can include the implementation of a more structured approach to problem-solving, a better understanding of the underlying infrastructure, and the addition of additional resources to more quickly address problems.

Improve efficiencies of cross-functional teams to reduce costs. This cost reduction is accomplished by improving the efficiencies of cross-functional teams, such as IT, finance, marketing, operations, and customer service. These teams then implement cost-saving measures, including leveraging economies of scale, improving processes and procedures, automating manual tasks, and streamlining the supply chain and procurement processes.

Moreover, these Managed Services then proactively monitor the system performance and proactively identify potential issues, which can help reduce costs even further. Finally, these services can help identify areas where investments can be made in order to maximize ROI.

  • Improvement of services over a given contract period

In order to ensure continual improvement of services over a given contract period, it is important to focus on knowledge optimization as well as the development of Standard Operating Procedures (SOPs). The optimization of knowledge can be achieved by ensuring that all staff are kept up to date on current industry practices and trends. Appropriate training should also be provided to ensure that all staff are equipped with the necessary skills and understanding to effectively carry out their roles.

Additionally, SOPs should be developed that outline the processes that need to be followed for each task. This will ensure the highest level of efficiency and effectiveness, as staff will have a clear understanding of the process that needs to be followed. Furthermore, SOPs can be easily updated and modified as needed.

  • Implementation of Industry Frameworks such as ITIL

The promises of Traditional Managed Services have been to achieve standardized and efficient IT service delivery while reducing costs and maximizing efficiency. This includes the implementation of industry-standard frameworks such as ITIL, with the goal of providing a consistent and reliable approach to IT service management and delivery. This includes best-practice standards for the incident, problem, configuration, and change management, as well as service desk support.

By leveraging frameworks such as ITIL, managed service providers have been able to ensure that their customers receive a consistent and reliable IT service experience. Additionally, the implementation of these frameworks has enabled managed service providers to reduce the time and cost associated with service delivery, while ensuring a high level of service quality and customer satisfaction.

  • Standardization using ticketing tools, escalation routes, and resolution SOPs.

Traditional Managed Services have promised a high level of standardization, with the use of ticketing tools such as ServiceNow or Remedy and clearly defined escalation routes and resolution SOPs. This standardization allows for a consistent service experience across clients and helps to ensure that all tickets are handled in a timely, organized and efficient manner.

It also allows for better visibility into the entire service delivery process, giving customers more control and allowing for easier tracking and reporting. Additionally, standardized processes help to ensure that all services are delivered efficiently and consistently, increasing customer satisfaction by allowing for more reliable service delivery and improved customer experience.

2. What has changed over the past decade?

In the past decade, there have been tremendous strides in the field of cloud infrastructure. Cloud technology has enabled organizations to move their managed services outside the organization. This has allowed for better scalability, cost efficiency, and agility, as organizations are no longer limited to the resources or capabilities of their own data centres. With cloud infrastructure, organizations can now access the latest technology and services, as well as benefit from the economies of scale of large cloud providers.

Furthermore, cloud infrastructure has enabled organizations to take advantage of advanced analytics, machine learning, and artificial intelligence capabilities, which further enhance the services available to them. The use of cloud infrastructure is rapidly becoming the norm for many organizations, allowing them to provide new services and achieve higher levels of performance,

  • ITIL itself has been redefined with a larger perspective

The ITIL framework has been completely redefined with a larger, more comprehensive perspective. This new perspective focuses on how IT services can be effectively managed in order to support business objectives and provide value to customers. It takes into account the entire IT service lifecycle, from service design and implementation to service operations and continual service improvement. Furthermore, it recognizes the importance of aligning IT services with the goals and objectives of the business.

This new perspective emphasizes the need for collaboration and communication between the different stakeholders involved in IT service management in order to ensure successful delivery and continual improvement.

  • Cost graphs across the globe are flattening out when it comes to talent

Cost graphs across the globe are flattening out when it comes to talent, with the global talent market becoming increasingly competitive as companies compete for the best-qualified talent. This has been driven by the increase in globalisation and the ability of businesses to access an international pool of talent. Additionally, technology has enabled businesses to find and hire the right people without having to be constrained by geographic boundaries.

This has resulted in a decrease in labour costs for businesses, as they are able to access the same quality of talent for a lower cost than before. This flattening of cost graphs is reflected through a decrease in the demand for highly skilled personnel, as more businesses become able to access a larger pool of talent that is cheaper, meaning the demand for qualified professionals.

  • Choice of Tools is becoming more difficult with most players offering attractive goodies

Choosing the right tools for one’s project is becoming increasingly more difficult due to a wide variety of products and providers, all offering attractive features and benefits. With the emergence of a more competitive market, vendors are pushing the boundaries and investing in developing innovative technologies that aim to meet the needs of a variety of users.

It is becoming difficult for users to decide which tool is the right fit for their project due to the sheer number of options and the abundance of attractive features and benefits. As the competition intensifies, the pressure is on users to carefully evaluate each tool they consider, in order to make the most informed decision.

3. What has not changed?

  • Client demand for cost reduction remains a priority across industries and sectors, and organizations must look for ways to optimize costs and maximize resource utilization.
  • Client demand for higher efficiencies is still a major focus and organizations must strive to continuously improve processes, reduce duplicative efforts and create new strategies for improving the efficiency of their operations.
  • Client demand for the implementation of new standards, new frameworks, and new technologies is still present. Organizations must be able to adapt to new standards that are continually emerging in order to remain competitive, up-to-date, and compliant with industry regulations. Additionally, new frameworks and technologies open up new opportunities to increase efficiencies and reduce costs in the long run.

In the next part of this article, we will see what the new requirements are in today’s changed work environment. We will look at how cloud, HCI and all the related technological advances are impacting Managed Services. And finally, we will look at how MSPs and Clients together can keep Managed Services Contracts relevant and result-oriented.

Thank you for exploring the first part of our series on managed services. To continue your journey, dive into the second part: Does Managed Services Still Deliver? – Part 2

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