By Alok Mehta (CIO, Business Systems, Kemper) and Chitty Shravan (AVP, Business Systems, Kemper)
Managed Services: In today’s digital age, effective IT management is crucial for business success. The growing trend toward managed services confirms this. These services involve delegating IT responsibilities to expert third parties. Businesses adopt these solutions to enhance IT operations, boost efficiency, and reduce expenses. This article offers a concise overview of the best practices in IT managed services. These practices are distinguished as they’ve been evaluated, refined, and shown to yield better results than alternative approaches. The primary best practices are outlined as follows:
- Consolidation of services: Consolidating services within a managed structure simplifies operations, reduces expenses, and elevates service quality. A detailed review of current services, contracts, and vendors highlights areas of overlap, redundancy, and potential integration, setting the stage for the control span illustrated in the following diagram. This evaluation facilitates stakeholder engagement, the creation of service level agreements, and the development of unified governance. Organizational change management addresses the human dimensions of consolidation, effectively conveying its reasons and advantages, ensuring everyone is on the same page. Additionally, consolidation offers adaptability for evolving business requirements, scalability based on demand, and clear financial insights – shedding light on costs, prospective savings, and ROI.
- Security: In a managed service setting, application security is vital, influenced by various elements. Technical debt can introduce vulnerabilities, but secure code reviews can address these gaps. Data encryption for stored and transferred data enhances defense, ensuring access only to permitted entities. While third-party tools aid development, they must be carefully assessed to avoid unexpected security flaws. Not all external components meet high-security standards. Continuous monitoring and logging offer real-time application oversight, detecting anomalies and enabling quick threat responses. In this context, a comprehensive strategy addressing these elements is essential for optimal application security.
- Vendor’s proprietary tools: When partnering with managed services, companies often fear over-reliance on vendor-specific tools, making future transitions difficult. These tools, tailored for precise functions, become essential for updates and troubleshooting. Intellectual Property (IP) concerns arise, with blurred lines between vendor-created and client-customized tools. Without clear agreements, this can lead to disputes, especially if tools provide a competitive edge. Script ownership is another issue. Scripts tailored for certain tools or automation may be considered vendor property if crafted during the service contract. If integral to operations, parting with the vendor becomes challenging. In essence, clarity in tool and script ownership is crucial when engaging with managed services.
- Disengagement Services: Disengagement services are key to concluding partnerships with Managed Service Providers (MSPs). Clear exit clauses in contracts guide the termination, defining mutual roles and expectations. Determining data ownership and transition terms ensures organizations have clear control, aiding in data migration or deletion. Rights to tools and custom scripts should be clearly stipulated to avoid disputes. Addressing financial elements, like penalties or refunds, is pivotal to sidestep monetary surprises. Comprehensive records of MSP processes, configurations, and tailored solutions are invaluable, easing transitions and reducing confusion. These records facilitate effective handovers. When these elements are in place, disengagement services support a smooth and amicable separation from the MSP.
- Contracting Agreements: – Managed services’ contracts have evolved in response to technological shifts and challenges. Paramount is data privacy, with an emphasis on compliance like GDPR (General Data Protection Regulation), ensuring global data protection standards. With heightened cyber threats, contracts spotlight cybersecurity, including breach notifications and incident responsibilities. The cloud transition has resulted in clear guidelines on integration, data placement, and service uptime. The emergence of AI and automation necessitates clauses on their ethical use, risks, and IP rights for custom solutions. The rise of remote work brings terms ensuring data security in dispersed environments and monitoring mechanisms. In tandem with global sustainability trends, modern contracts underscore environmentally responsible practices, driving eco-conscious services and a sustainable future.
- Location strategy: In the global business arena, strategic location planning is crucial for service excellence, cost management, and risk control. Using onsite, nearshore, and offshore models allows businesses to adapt to client demands. Onsite teams provide immediate services and communication, while nearshore teams ensure cost-effectiveness and cultural harmony. Offshore teams, located in talent-abundant regions, offer competitive, quality services. This approach curtails Total Cost of Ownership (TCO) and safeguards against global disruptions. Diverse operational locations guarantee service consistency, even amidst local disturbances. Moreover, such a geographic distribution fortifies Disaster Recovery mechanisms, facilitating swift shifts during emergencies. This multifaceted location strategy assures both efficiency and robustness.
- Cost: In anaged services contracts, pricing greatly affects client decisions and satisfaction. Monthly or annual fees ensure predictable expenses, aiding budgeting. However, longer contracts, while cost-effective, may reduce flexibility. Prices can fluctuate based on volume, with discounts for larger scales. Operating in diverse regions introduces pricing challenges due to varying regulations and cultures. Service credits offer relief for missed standards, but regular credits could indicate continuous issues. Costs might adapt according to the MSP’s performance or initial investments in technology. Early contract terminations could also incur fees. It’s vital for clients to grasp these pricing elements to achieve a balance between cost, quality, and flexibility.
- Multi-vendor governance: Managing multiple vendors requires strategic foresight and understanding. Central to this is robust oversight, ensuring consistent vendor performance. Regular communication streamlines operations and resolves issues. Detailed contracts clarify vendor roles, and service level agreements, SLAs. or operational level agreements, OLAs, set service benchmarks, promoting accountability. Avoiding reliance on a single vendor allows adaptability in changing business landscapes. Risk management is vital, addressing multi-vendor challenges. Beyond procedures, nurturing a shared operational culture ensures vendors align with company values. Effective vendor management consolidates relationships, maintains standards, and maximizes collective benefits. Essentially, adept multi-vendor governance merges methodical processes with active relationship oversight.
- Continuous improvement: Set Clear Expectations. Define your expectations for continuous improvement and innovation from the outset. Make it clear that you expect the service partner to proactively identify and implement enhancements. Schedule regular meetings to review performance and discuss opportunities for improvement. Encourage the partner to present innovative ideas and solutions during these sessions. Establish a feedback mechanism where your team can provide input on the partner’s services. Encourage open and honest feedback to drive improvements. Compare the partner’s performance with industry benchmarks and best practices to identify areas for innovation and improvement. Finally, consider incorporating performance-based incentives into the partnership agreement to motivate the service provider to deliver innovative solutions.
- Communication plan: Identify key stakeholders on both sides and ensure that there is a clear understanding of their roles and responsibilities in the communication process. Implement a regular communication schedule, which may include daily, weekly, or monthly updates, depending on the project’s complexity and scope. Define an escalation process for addressing issues or concerns promptly. Ensure that both parties are aware of how to escalate matters when necessary. Foster transparency in all communication. Be open about challenges, successes, and changes in project status. Use a combination of communication channels, such as email, video conferencing, and project management tools, to ensure effective communication.
- Document Everything: Clearly document SLAs, including response times, resolution times, and performance metrics. Ensure that both parties have access to SLA Document all processes and procedures related to the services provided by the partner. This includes incident management, change management, and security protocols. Maintain a shared knowledge base where both your team and the partner can access information, troubleshoot issues, and share best practices. Ensure that all contractual agreements, including terms, conditions, and pricing structures, are thoroughly documented and accessible to both parties. Document any changes or updates to the scope of work, decisions including change requests, approvals, and impact assessments.
- Adopting New Technology: Collaborate with the service partner to assess the feasibility and impact of adopting new technologies. Develop a clear plan for implementation. Consider conducting pilot projects to test new technologies on a smaller scale before full deployment. Provide training and resources to your team and the service partner’s team to ensure a smooth transition to new technologies. Develop a risk management strategy to address potential challenges or disruptions that may arise during the adoption of new technology. Continuously monitor the performance of innovations and collect feedback from users to make necessary adjustments and improvements.
- Generative AI: Gen AI can revolutionize managed services by automating tasks, predicting issues, and enhancing customer support. It can potentially improve security, analyze data, optimize costs, and scale effortlessly. With data-driven insights, it aids decision-making, reducing errors and enabling remote management. The benefits encompass cost savings, operational efficiency, superior service quality, risk mitigation, scalability, and informed decision support. It’s a transformative force, offering 24/7 support, proactive maintenance, and compliance monitoring. However, careful implementation and ongoing monitoring are crucial to unlock its full potential and ensure seamless integration with existing infrastructure and tools, leading to more efficient and effective managed services. Time will tell if the promised benefits can be realized. However, we should keep a close eye on this exciting technology.
By implementing these best practices, you can establish a strong and productive relationship with your IT managed service partner, fostering continuous improvement, effective communication, thorough documentation, and successful technology adoption.