At your service

"Three things are very important. Those are communication, communication, communication. This is so fundamental and so critical that you just can't overemphasise it," says Hari Padmanabahn, deputy managing director of 3i Infotech.

Padmanabahn feels strongly that communication is an integral part of a successful managed services relationship and other industry experts agree. They say it is extremely important for the service provider to speak with someone in the company at CXO level on a regular basis. And that communication has to be about what the service provider is doing and how it is working, but more importantly, about the areas that are causing concern and what action is being taken to mitigate that concern.

Deepak Jain, vice president at Wipro, explains one of the reasons communication is so important. He says the key benefit companies expect from managed services is improved service levels, and these are tied up both in communication and in the service level agreement (SLA) that accompanies the initial contract. While it is important for the company to communicate changes in its strategy or its needs, it is equally important for the managed services provider (MSP) to communicate constantly with the company.

"Communication is very important from the provider to the customer, and very structured communication in terms of presenting the performance in a metric form so it gives the customer the confidence that this is the SLA they agreed to, this is the performance of the service provider, and it is constantly improving. It makes the customer feel that the decision to outsource was the right decision," he adds.

For many companies, outsourcing began as a way to source cheap staff labour overseas and the benefits lay in reduced costs for the business. From these humble beginnings, outsourcing has grown into managed services, with providers offering a range of services - from the ubiquitous call centre, all the way to high-end infrastructure provision like datacentre management.

But with this change has to come a new way of looking at managed services. Outsourcing is no longer a simple commodity to be bought as and when the business sees fit. It is a long-term partnership with a managed services provider - a business relationship that takes time and effort to create and sustain.

"The best way to do it is to get help, to get a consultant who has done this before and who has the resources to help you establish your outsourcing strategy, build a business case, provide the proper request for proposal, do a proper selection criteria, invite the right qualified companies and do it right," says Hazem Mallas, CEO of Optimiza.

Optimiza is a corporation based in the Middle East,formed from the merger of nine companies in 2006. It provides management consulting and technology enablement as well as a range of managed services.

Mallas adds: "Don't cut corners, because if you cut corners, it will come back on you. Make sure you cover all the requirements correctly and that you have the right agreement, because an outsourcing relationship is really a partnership, it's a true partnership."

But when it comes to preparing for a managed services partnership, a company has to look at the benefits that outsourcing will bring, if any. While paying staff in a different country less money has obvious cost benefits, today's managed services market is more complex, and so too are the benefits it offers.

There are big benefits to be had from outsourcing IT. The escalating cost of implementing and maintaining a state-of-the-art infrastructure, as well as other IT projects and solutions, is simply not plausible for a lot of businesses, particularly SMBs. A dedicated MSP can offer an economy of scale by deploying its services to multiple customers.

"Organisations are getting more and more mature in their thinking. It is ultimately a fact that it is practically impossible for most organisations, other than the very large banks, or other very large organisations to invest in absolutely high end infrastructure for datacentres, data storage and data protection to the same extent as a dedicated datacentre operator can," says Padmanabahn.

The in-house costs of not only the hardware and software involved, but also of recruitment in terms of trained IT staff, are too high for a lot of companies to bear, continues Padmanabahn. And this leads on to another of the big benefits IT outsourcing provides - staff. The pool of available trained and talented IT staff has simply not grown in pace with demand.

With managed services, Mallas says, a company can immediately be provided with the IT product it needs and the staff to implement it, rather than going down the path of launching an internal project, which could take years to complete.

Jain adds a third benefit to modern managed services - the ability to focus on core business areas. For most businesses, IT and telecommunications are not core business areas but support functions, though often essential ones, within the company to maintain and improve service levels for its customers. Outsourcing these support functions frees the company to focus on its core business.

"There are certain perceived benefits from outsourcing, which most companies would want to leverage on. And one is that companies would like to focus on the core business area and leave the IT management to the expert or the IT services organisation," says Jain.

A part of that desire to focus on core business functions comes from the increasing complexity of IT, particularly infrastructure. For a company to own and implement its own infrastructure does not just carry cost and staffing issues, but also presents a huge challenge.

Suraj Thampi is CEO of Momenta Global, a corporation based in the Middle East that outsources technology, media and telecommunication services. He feels a company that specialises in IT and has a range of skills in various areas is an obvious remedy to the challenge of intricate infrastructures.

"The most important reason behind outsourcing would be, if we take infrastructure, to lessen the headache companies have with managing their own infrastructure. Managing a large IT infrastructure is a lot of hassle today. It's very complex, with integration, implementation, managing their service qualities, managing their end product and the end results they want - this is a very complex environment," he says.

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