Moving towards a new managed services model – Consultancy.uk

Having developed almost two decades ago, managed services remain an important part of the IT function – but they may be at risk of going stale. According to two experts from Elixirr, managed services companies need to upgrade their offering to become partners, rather than just service providers.
According to Davor Turkalj – a service desk manager at iOLAP, an Elixirr company – managed services (MS) was “born out of a need to outsource responsibility for monitoring and maintaining certain services, or more often specialised appliances such as on-prem data warehouse solutions or rather cumbersome ETL servers or network configurations.”
Initially developed between 2005 and 2006, the IT outsourcing practice as it is today now sees a company’s responsibility for maintaining, and anticipating need for, a range of processes and functions, contracted out to external operators. This allows for improved operations and reduced budgetary expenditures, through the reduction of directly-employed staff.

While this has been an effective technique, however, MS has undoubtedly changed and evolved over the years, particularly in the technical capabilities that most MS providers offer. And according to Turkalj, over the last decade this has led iOLAP to “consistently observe one particular issue”.  
He explains, “Many of our clients, despite having invested in the latest tooling, built internal MS teams or secured a contract with a reputable 3rd party provider of IT MS, still suffer from performance issues and in many instances, have declined. So, what’s the issue? The challenge is not in the technical capabilities. It’s in the mindset, approach and applied model of IT MS leaders. To understand this, let’s first look at the IT outsourcing market and what it offers.”
IT outsourcing is the practice of contracting out various IT functions or services to external providers, rather than handling them in-house. Dieter Halfar, an Elixirr partner based in London, clarifies that this can include “a wide range of services such as software development, infrastructure management, network operations, technical support and cybersecurity.”
According to Halfar, IT MS is one of the most common IT outsourcing models. Managed service providers (MSPs) typically offer six services on a subscription or pay-as-you-go basis, providing ongoing support and management of IT infrastructure and systems – each of which the pair note below.
Turkalj adds that while MS can combine a wide range of tasks into one service, thus eliminating headaches associated with organising multiple vendors, there are risks to this. Chiefly, it is important to note that “every MS contract comes with SLA/SLO which guarantees the speed and reliability of the support supplied”, so that companies can focus on further developing their operations in confidence.
The second most popular form of IT outsourcing comes in the form of professional services (PS). Halfar explains that this involves “outsourcing specific IT projects, tasks or expertise to external consultants or firms”. For example, services such as software development, system integration, IT consulting, project management, and specialised technical expertise.
“PS engagements are often temporary and project-based, with the external provider delivering a specific outcome or solution within a defined timeframe,” Halfar continues. “Looking at the market and its needs, there are five impactful PS categories for any company.”
Each solution has its own benefits and risks. When comparing MS and PS, the most significant difference is the timeframe in which they operate and the scope of work. So, what does this mean?
Turkalj says, “Both models have their value and deliver substantial benefits. The challenge is in the mindset previously mentioned, and it lies in thinking these services don’t or should not overlap. The biggest challenge across industries over the past few years is the speed in which companies need to tackle their problems or jump on opportunities. The best way of doing that is creating synergy between managed and professional services. In short, having a team that can do both.”
That can be easier said than done, though – and for such synergy to work, it needs to be set up correctly, and that goes beyond the technical skills. In this context, MS and PS providers need to shift their offering to take advantage the opportunity – from ‘we are a service provider’ to ‘we are your partner and we will help you in your development.’
“The new model of IT managed services needs to put the focus on the client,” states Turkalj. “Success should be measured through the success of the client and how much the service you provided helped in achieving that. SLA and SLO are the measures of your ability to follow the rules of a contract, but not the true value and quality of your service.”
Concluding on the matter, both experts also provided a list of key benefits realised from customer-centric MS.
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