Managed services: design, build and run with it

  • Posted on December 9, 2015
managed services

The following blog post was written by Avanade alum Sherry Allen.

A good managed services partner operates as part of the same family as its clients, but is also separate enough to provide a broader perspective of the business, in turn adding value.

One of the most effective ways to build this symbiotic relationship is to work with a client over the entirety of their IT journey, especially as it relates to large strategic transformation projects and platforms that are key to their business operations. This is what we call the ‘Design-Build-Run’ or ‘As a Service’ model as it allows both clients and partners to take a long term, end-to-end view in terms of cost, value and business outcomes.

As organizations evaluate this type of model, they typically ask themselves: What are our business goals and how does technology enable realization of those objectives?  Based on overall value, what systems need to be changed and how will new platforms and processes then be maintained and updated to be sure we stay on track and relevant?  And does executing all of this with just my internal team bring the agility, service delivery assurances and flexible, cost optimized model for the organization that we need today and three years from now?

More and more organizations are realizing they need partners to accelerate and ensure success; they are embracing this framework by electing to go with ‘As a Service’ offerings as opposed to traditional, heavy CapEx investments up front and insourced maintenance year over year.  Bundling the new project implementation activity, licensing and ongoing support functions over a long term partnership may allow organizations to shift that upfront investment into a fixed, monthly OpEx expense spread over a longer duration, bringing a much lower Total Cost of Ownership value to the initiative and financial flexibility to the organization.

The experience a partner brings is invaluable when incorporating lessons learned from other similar projects, bringing industry best practices and delivering through a highly-skilled external, global workforce. The partner is accountable for the schedule and associated costs, and allows their internal teams to focus on maintaining the current environment while also helping to identify new system requirements as the project moves forward.

For many of the same reasons, there is also significant benefit to extending that partnership to the long-term ‘Run’ support of the platform as well. Instead of worrying about recruiting, hiring and maintaining new skilled resources and investing in tools, these organizations can look to an ‘older sibling’ – a managed service partner that can bring differentiated expertise, technology, and experience.  Partners that focus on certain technologies or platforms are making a continued, concerted investment in their people and tools. Those investments are most likely not duplicated in the company’s internal IT environment as their focus tends to be at a broader level.

In addition, the other huge benefit of having the ‘Design, Build’ partner also perform the ‘Run’ activity is the staffing efficiencies and reduced risk across the entire term. By looking at the project holistically, the partner is able to deliver a more seamless transition and continuity of resources through the project phases. Shifting some of the ‘Design, Build’ experts to support the system in the long-term model keeps platform specific skills and knowledge intact, while reducing transition and knowledge transfer costs by over 85%.

For example, by working with a client in North America to transform one of their major core systems to the .NET platform, we were able to illustrate a 17% reduction in resources and a 44% savings in overall total cost, compared to the client’s internally sourced model.  By having specialized people and tools incorporated into the overall solution, our approach also resulted in higher service performance - response time would be reduced by 15% and resolve time reduced by over 72% from the internally sourced model.

We’re seeing a real trend in the market now with clients shifting away from large outsourcing agreements where all support for all platforms is consolidated with one provider, to taking a more granular look at the portfolio and identifying where a niche player, one that has specific expertise, can bring measureable value.  As IT decision-makers are being called upon not only to ‘keep the lights on’ with existing systems, but to also innovate and deliver new technologies that either increase revenue, reduce cost or improve customer satisfaction, large transformative projects are now seen as a key long term opportunity where initiatives can be delivered successfully, predictably and aligned to long term business case benefits through the ‘Design-Build-Run’ and ‘As a Service’ framework models.

Alexa Mary

Great blog! Managed services is a big part in the IT industry for making good decisions and for good management services. This information helpful to IT organizations.

March 16, 2020

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