Managed Services Promote Predictability in Tough Times

Managed services are a hot item in the IT world. Companies faced with downsizing their IT staffs are finding these competitively-priced, outsourced offerings very tempting.

However, as with so many technology terms, “managed services” carries different meanings to different people. Pricing also varies considerably, depending on the scope and sophistication of services provided.

So, the first items to consider are what services you want to manage and your budget. Basic managed services programs typically offer alerts/advisories about needed actions and some level of manual remediation; advanced options include more in-depth monitoring/maintenance, and automatic problem remediation through the software.

A managed services provider delivers and manages technology services, applications and products. They can be hosting companies or comprehensive managers of an entire company IT network, monitoring and maintaining everything from server performance and security to mobile access and telephony.

Backup, data storage, network management, user management and systems management all can be part of a managed services contract.

Most, if not all, of these services can be performed from beyond a company’s internal network–minimizing or even eliminating duties previously handled by internal IT staff.

On paper, this sounds great. There’s great economy and efficiency. And, managed services by nature are proactive, identifying and fixing pending problems in areas ranging from server capacity to security before they become operating meltdowns. Plus, routine administrative functions can be automated. That, in turn, drives higher productivity and morale, and ultimately benefits the bottom line.

Further, outsourced managed services providers are able to rapidly access specialized skill sets for out-of-the-ordinary challenges. This improves quality of service and cost-effectiveness, and helps maintain a calmer workplace (versus the frantic “brush fire” mentality that can set in when urgently needed skill sets are not readily available).

And, managed services contracts often are based on a flat monthly fee, making costs predictable in this historically unpredictable economic climate.

For these reasons, among others, popularity of managed services is skyrocketing. One review showed roughly a quarter of firms utilizing a managed services model in 2006. Just three years later, almost two-thirds are deploying managed services.

That’s all good and well. But, there’s a darker side of the managed services story–high dissatisfaction rates. Moral of this story: Commit to hire based on proof of performance (not just because you like someone), and build in periodic evaluation tools to keep top-performers on their toes. Areas to address in selecting and staying on top of a managed services provider include:

  1. Get clear with yourself, and get very specific with a prospective provider about what you want and expect. To eliminate superfluous efforts, decide on a budget range first, because this will drive remaining recommendations. (Also ask the prospect to laundry list pricing for add-ons so you can evaluate cost/benefit issues of upgraded services.) Among potential services are:
    • Overall IT infrastructure evaluation. This provides a bird’s eye view of how your overall system is doing, highlights potential problem areas, assesses how your capacity is looking, and identifies areas for upgrade planning;
    • Hardware/software review. This examines how best to allocate current and new system resources;
    • “Early warning” system development. Proactive monitoring can forecast such failures as a critical server running out of hard drive space–so that you can bolster the system without any productivity loss;
    • Security/unauthorized use audits and fixes. This addresses such problems as attempted access by unauthorized users, high-bandwidth interactive games, and illegal peer-to-peer file sharing that clogs resources and spurs viruses/spyware. Security reporting provides an overarching view of the network, and identifies when/where patches are needed to prevent vulnerabilities;
    • Conducting “triage.” The whole concept of triage in medical circles is to rapidly deploy resources appropriate to a specific condition (e.g., a cardiologist for a heart problem). By employing the same process in IT, the right people can step in right away when a network problem arises, helping ensure that glitches don’t become Goliaths;
    • Documentation. A detailed site-level inventory provides up-to-date hardware and software information that can be used for insurance claims in the event of a flood, fire or theft.
  2. Demand a clear-cut, well-defined cost structure that optimally leaves no wiggle room for later disagreements. Consider developing a fixed-fee agreement that includes a specified level of unforeseen services–in essence, insurance for the unexpected.
  3. Maintain contract options. Don’t lock yourself into a contract beyond two or three years. Conversely, make sure you have a stable agreement, so that a provider won’t arbitrarily switch gears at an inopportune time.

Develop non-restrictive, long-term groundwork by developing a “goodwill clause” identifying special consideration down the road. In some ways, this resembles a grandfather clause that continues a higher level of service or preferential pricing.

By utilizing managed services, a company can help ensure managing its operation for optimum productivity through uncertain and rough times.

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