Authored by Seshail Kamanna, Partner, Digital Services, BDO India
In today's fast-paced business environment, leveraging technology solutions has become essential for organisations striving to stay competitive and efficient. Business process management plays a crucial role in optimising workflows and enhancing overall productivity. Meanwhile, IT-managed services offer businesses the peace of mind that comes with reliable, outsourced management of their IT infrastructure. Prioritising IT security through regular audits helps identify vulnerabilities and ensure that data and systems remain protected against potential threats. Embracing these key elements not only helps companies operate more effectively but also positions them to adapt to the ever-changing technological landscape.
Organisations often outsource non-core functions to reliable partners to be able to focus on their core competencies. One such area is technology-managed services. However, over time, processes may drift from the intended objectives of both the client organisation and technology-managed services partner, with the former seeking exception-based management while the latter prioritising a revenue maximisation opportunity over optimisation.
Like any other organisational function, technology-managed services are integral and need to mature over time. Periodic reviews are essential to ensure alignment between client objectives and service partner outcomes, ensuring mutual value realisation from the association. These reviews should assess the business case alignment, contractual framework, performance metrics, and governance mechanisms.
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Business-case alignment
IT-managed services have a large scope, and they evolve from transaction-based to partner-based over time. Considerations regarding the business case need to be taken before such initiatives. Also, the realised value against the business case needs to be assessed. There are different metrics for effectiveness and efficiency. Metrics for the former include enhanced user experience and interactions and effective transition from development to support. Those for the latter include the increase of turnaround time, optimisation of incident resolution costs, and left-shift of incident and service resolutions.
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Contractual framework
IT managed services are a long-term contract, and the contract should be built to enable management of relationships and performance requirements over a period of time. Some areas that need to be assessed include obligations and liabilities, control points, exit conditions and implementable framework for change management.
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Performance metrics
Multiple data points are available to assess the performance. Broadly, they could be identified as operations and initiatives. Operations areas include service management (incidents and service tickets) and performance data from any tool (such as a network System, cloud brokerage platforms and so on). Initiatives include any representation that the technology managed services provider would have brought to the table with their enhanced experience. These initiatives are intended to enhance the maturity of IT-managed services.
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Governance mechanisms
The structure, model, and processes play an important role in enabling an effective and continuous check mechanism on the state of the IT managed services. In the case of a multiple-partite engagement model, there is a need to further look at the governance mechanism with those parties as well. The various instruments used to enable an effective governance mechanism need review. Some of them are working-level agreements, monitoring mechanisms, and conflict resolution mechanisms.
One common pitfall of optimisation reviews is viewing them inadvertently as an internal fault-finding engagement. Optimisation gains are only possible when the intent is to optimise and not necessarily serve as a backlash. If one were to look at the business case benefits of optimisation service, it would be primarily to enhance the relationship between the IT managed Service provider(s) and the client organisation. Additionally, system capabilities help raise the baseline requirement of obligations from the IT managed service providers. System capability review is also becoming a very important aspect of the review process.
Increasing alignment and thereby enhancing the gains from the association is only possible by enabling optimisation service. The gains from association require continuous nurturing and, hence, need forward-looking thought. IT-managed services give scale and scope fungibility, but if not optimised, the construct will tend to be non-productive for both (provider and receiver) organisations.