Avanade's managed services achieve significant business value
- Posted on June 18, 2014
This is a guest blog post by David Tapper, Program Vice President, Outsourcing Services Research, IDC.
The topic of managed services is hot right now. Why? Because the ultimate goal of managed services is to gain new capabilities from the managed services provider that buyers can use in their own organizations to innovate new products and services in order to grow their business. The result is an enterprise's ability to optimize business performance and ROI.
To validate that managed services drives these benefits, IDC talked with numerous customers of service provider Avanade, ranging in size from 110 employees to 90,000 employees, with an average of 15,426 employees, and spanning the banking, education, healthcare, insurance, pharmaceutical, mining, manufacturing, retail, sports, and telecommunications industries. IDC's goal was to assess the business value these firms achieved in using Avanade's managed services to support their enterprise business applications and infrastructure.
IDC's analysis showed significant financial and business results, with buyers stating that they were able to take more risks, were given more opportunities to make more money, and had access to new capabilities that enhanced revenue generation. Additionally, customers highlighted how Avanade, a joint venture between Accenture and Microsoft, also provided a more personalized set of services and access to better skills and domain expertise, particularly with Microsoft technologies, while ensuring the stability of the IT environments that Avanade managed.
The results of the study, based on an average user base of 9,600 employees, show that Avanade's customers achieved a five-year return on investment (ROI) of 446% while realizing a discounted 5-year aggregate benefit of $28.6 million. The average payback period was just over four months from going live, returning almost $6 in benefits for every $1 invested.
Diving in more deeply, IDC uncovered that these benefits were driven by a combination of factors. First, there were the productivity gains of the IT staff, which were able to reduce the average time involved in forecasting and managing/configuring applications by 78% while reducing application development time by 67%. This drove productivity gains and cost savings of nearly $5 million while enabling internal IT staff to focus on other strategic projects.
On the business side, Avanade's managed services helped organizations unlock the value of transformative technologies to realize business productivity and revenue gains of more than $2 million among non-IT staff. As captured by one customer's feedback, Avanade has enabled it to "ramp its resources, manage the development process, and basically have an application that we couldn't have had by using only internal resources." When it comes to risk mitigation, Avanade's managed services reduced the number of downtime incidents by 64% while lowering infrastructure costs 13%. This meant that customers could drive higher revenues from increased availability of business operations while delivering products and services more quickly.
So how does Avanade help customers achieve these results? Avanade believes these results are driven by a combination of a set of strategic differentiators and breadth of capabilities. These differentiators begin with Avanade's focus on business outcomes, a strategic consultative approach of helping customers transform their businesses, and vertical expertise to support industry-specific requirements. Additionally, Avanade provides customers with accelerated access to leading-edge Microsoft technologies, flexible sourcing options and effective governance, and the ability to adapt IT rapidly using new technologies and consumption models, such as cloud and mobility.
The capabilities that Avanade offers its customers include the gamut of consultative services such as strategy, design and architecting, as well as development, deployment, systems integration and migration services for a full range of IT and application technologies. Further, Avanade provides enterprises with a "right sourced" model involving onshore and offshore resources, as well as new delivery models including cloud.
Finally, Avanade offers buyers the choice of either customized or standardized managed services supported by a set of best practices focused on ensuring enterprise operational excellence and business agility to help enterprises maintain competitive advantage Avanade is able to deliver against its commitment to provide continuous improvement and innovation as part of its application and infrastructure managed services agreement.
You can visit David Tapper's webpage on IDC.com.