How do you choose the right Managed Service Provider?

The digital transformation is fast, global disruptions happen all the time and the skill gap for ICT recruits is growing - it seems, as if managed services have become a standard to strengthen business operations.

Content

1. Definition: Managed Services
2. Local vs Nearshoring vs. Offshoring
3. Onboarding & Training
4. Managed Services meet Consulting

Definition: Managed Services

Managed services are outsourced services of specific business operations such as maintenance, development, cyber security, support, etc. In contrast to on-demand services, managed services are booked and planned as a regular, on-going support instead of one-time services. However, managed service offers can have different pricing models depending on availability, frequency, and skill level.

For many companies of all sizes, managed services are a crucial part to scale their resources, grow their business and maintain critical operations such as business-critical software systems, infrastructure, data, or cyber security. Any company looking to outsource specific services, it's therefore necessary to define which ones make most sense regarding costs, availability, required skills, and amount of resources needed.

According to a Canalys survey, cyber security has been the fastest growing market for technology that is being used to deliver managed services. With the increase of cyber threats and a flux of new harmful technologies, demand for specialized security experts is at an all-time high to ensure that even smaller businesses have sufficient protection against ransomware and data theft.

Other key areas for managed services are:

• Data centers (backup, storage, analytics, etc.)
• Cloud infrastructure (IaaS)
• Device services (PCs, smartphones)
• Integration services
• Helpdesks
• Networks
• Software services (SaaS)

Local vs Nearshoring vs. Offshoring

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When considering managed services, companies usually face the decision between local, nearshore or offshore services. Although offshore usually is less expensive than nearshore or even local, costs should not be the only reason to pick one model over the other.

Usually, managed service teams work very closely together with your IT or other related business units. Additionally, customer-facing services need to fit the requirements of your customers. Language and cultural fit therefore play a big part on top of expertise and availability. Another aspect that is often crucial is industry know-how. Quite often, different industries have widely different requirements, customer expectations, and compliance regulations. A managed services team that is experienced in the specific industry is easier to onboard and is more accustomed to certain workflows.

For example, many of our customers in the DACH region prefer team leads that understand not only their industry and local market but also their company culture. They therefore usually want people who live in the DACH region and have an understanding of specific communication rules, work attitudes, etc. Additionally, customers do like it if the managed services team or at least the team lead can occasionally meet in person (for example for the kick-off or strategic workshops).

As with many other services and products, a regional fit also often comes with the assumption that the service is of higher quality. This might not always be the case but trust and "ease of mind" are often a big part when it comes to choosing the right service partner.

However, offshore on the other hand quite often can provide a much higher number of resources at much lower costs. The main question with offshore is often the amount of investment needed to onboard the resources. Language barriers can also hinder projects or services, depending on their complexity.

Nearshore is a newly discovered compromise that offers low costs, high availability and scalability as well as a closer cultural fit. Especially Eastern European countries have developed a strong ICT workforce in the last decade and are picking up speed when it comes to their digital readiness.

A current study by Spirit/21 (in German) amongst DACH companies found that the main success criteria for selecting a managed services partner were:

• Local contact person (36%)
• Good internal IT organization (32%)
• Fitting SLA (31%)
• German language (31%)
• Customer-centric services (27%)

However, additionally, "soft skills" as well as administrative questions might not have made it into the Top 5 but were still mentioned by at least every 5th company. Trust and a healthy problem management were named as well as transparent service definitions, contracts that were flexible as well as proper invoicing.

Onboarding & Training

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Depending on the service, scope, and project, some managed services teams might need to prepare and train for special requirements, certifications, etc. How long this preparation might need is another important factor when you choose a managed services partner.

Ideally, you find someone who already has the right skills and resources at hand, but it's quite possible that you need a very specific set of certifications, e.g., for integration, implementation or maintenance of specific technologies.

Additionally, it's important to talk about the onboarding process which usually involves getting to know your teams, infrastructure and workflows. Experienced managed services partners can support with best practices how to set up kick-off meetings, initial workshops and set up the preferred collaboration methods (e.g., how work packages are being organized, documented and delivered, whether agile project methods will be used and how, etc.).

Read in our expert article, how you can ensure that you successfully collaborate with your managed services partner.

Managed Services meet Consulting

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A surprising result of the Spirit/21 study was the fact that an overwhelming majority of survey participants agrees that managed services should include consulting services. 85% agreed that managed services without consulting services are not attractive for companies in the future.

Consultation services as part of managed services have several crucial advantages:

• They usually involve a thorough evaluation as well as support in the planning and structuring of projects.
• They can provide invaluable insights into pilot projects, common best practices, and standards.
• They help align the managed services with the company strategy.

Quite often, managed services in the technology areas (such as integration, infrastructure, cyber security, development) are needed because of a lack of internal resources and/or know-how but also often regard topics which are new to the company or are supposed to expand. Consultants can guide these new ventures and help the company set up the services on a strategic, technological, and market-oriented (as well as customer-centric) level whereas "just" managed services would mainly concentrate on their tasks at hand.

DIGITALL offers a wide range of managed services, from cyber security, business-critical software systems (e.g., Salesforce, Microsoft) to technology services. Find out, what we have to offer you or contact us directly for a first meeting via discover@digitall.com.