Managed Service – it’s an all-inclusive offering

May 30, 2018 | Articles, Practice - Strategy

If it’s an all-inclusive service you’re after – think cocktails on tap, food on demand and the reassurance that someone else is in charge, then it’s a managed service offering that you need.

Managed service offering – outsourcing on a proactive basis

Unlike traditional off-and near-shoring where individual parts of a business are transferred overseas to different lower-cost locations in a bid to save money, a managed service offering provides outsourcing on a proactive basis. Under the terms of such an agreement, a managed service provider takes managerial responsibility for certain business functions with the aim of utilising cheaper resources based overseas but maintaining the responsibility and quality expected in the home location. While the ultimate aim is to improve operations and reduce costs, it can also be seen as an alternative to the break/fix or on-demand outsourcing model where the service provider performs on-demand services and bills the customer only for the work done.

With the increasing pressure on organisations to cut costs, particularly in the areas of real estate and staffing, managed service offerings are becoming much more popular. According to a recent report by US research company MarketsandMarkets, the global managed services market is expected to grow by about 11 per cent a year over each of the next four years to almost $258 billion.

So why is this, and what is the attraction?

Managed service providers offer their clients complete support, helping to make their business more profitable and sustainable. Rather than singling out individual parts of a business and shipping activities to different locations, managed service is more of a strategic process intended to improve operations and cut expenses over the longer term. As well as giving the client access to more cost-effective services that wouldn’t be possible in-house, it also helps free up internal resources to focus on the areas that can be improved internally.

For those availing of the service, it is all about reducing or controlling ongoing expenditure and assisting businesses of all sizes to avoid the feast-or-famine struggle in more ways than just revenue stability. By partnering with the managed service provider, they can improve efficiency and time-to-market, as well as increase security and peace of mind. A managed service agreement also facilitates the sharing of risks associated with adopting new technology and provides economies of scale that ultimately help cut costs.

By contrast, for those providing the service it is a way of enhancing their relationship with the client. By partnering with their clients to improve their clients’ business, they are able to provide a more all-round service, offering longer-term benefits to all parties involved. Moreover, it is also a source of predictable revenue for the provider, which in the current business environment can be twice as valuable as unpredictable income generated by individual contracts.

Why the recent growth in the sector?

Increased demand for improved IT infrastructure and the ever-growing number of regulatory compliance issues facing the financial services sector is putting yet more pressure on already tight budgets. Firms are being forced to look for alternative and more cost-effective ways of moving their businesses forward, including deploying activities into the cloud.

For many organisations, entering into a managed service agreement enables them to take advantage of new developments that they wouldn’t otherwise be able to. Meanwhile, increased demand for end-to-end application hosting services, the rising sophistication levels of the associated application architecture and the inability of many companies to pay large wages to teams of skilled IT staff is also improving the appeal of the managed service offering.

A full all-round, cost-effective service

At Brickendon, we are enhancing our managed service offering to provide what our clients need – a safe, secure low-cost environment with highly-skilled, but lower-cost experts, whose aim is to help your business excel. Gone are the days of the testing team sitting offshore in India and being visited once or twice a quarter by an executive flown in from the London or New York headquarters. Today, it is about offering a full all-round, cost-effective service, providing delivery and financial benefits to the client in a more agile way so results are achieved more quickly.

At Brickendon we aim to work with our clients and understand their needs and challenges to ensure we provide a tailored service to meet their requirements. For more information about our expanding managed service offering, email us.

We are an award-winning transformational consultancy with the drive, skills, knowledge and experience to help you change your business for the better. Let us show you what we can do.

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