Over the past 10 years, the IT supplier market has been defined by one major trend – the scramble for services. As the companies operating in the 1980s and 1990s realised, the margins they made on hardware sales were getting smaller and smaller. So the smarter ones looked to the future and began to build their businesses around managed services.
The problem your company faces is that, a decade down the line, so many suppliers made this switch that identifying the real players with solid managed services offerings, as opposed to those merely playing catch-up or selling a more basic set of services, can be a minefield.
Those of you who have properly costed out projects and made the decision to go down the managed services path are likely to find the process of selecting a vendor a difficult choice to make. It is one which will involve long, hard scrutiny of a potential supplier’s internal resource, market reputation, history and even balance sheet before you even begin to look at the ins and outs of the managed services offering itself.
Alain Falys, CEO of global business-to-business electronic invoice delivery service Open Business Exchange (OBE), made the decision to outsource the running of his company’s mission critical processing infrastructure to Computacenter three years ago.
Open Business Exchange bases its operations around an electronic invoicing service in order to provide streamlining in its invoicing process and to cut its overheads when dealing with suppliers and buyers, whatever their size or accounting package.
Falys says OBE looked at a number of suppliers, but made the choice to begin its external relationship “primarily because of the [supplier’s] expertise. [It] has pools of experts with up-to-date skills in the latest technologies and that is very important for us,” he says.
“We also looked for industry-wide certifications, people, service level agreements and the ability to respond to crisis.” Falys adds: “Our electronic invoice delivery network is our core service and the more critical something is, the more important it is to have an assigned team of people looking after it.”
While expertise is clearly central to the managed services relationship, there are more basic factors you need to bear in mind during the provider selection process to really get to the heart of a real offering.
Ian Vickers, founding director of managed services provider Managed Enterprise Technologies (MET), believes finding out exactly how much of a provider’s business has historically come from managed services can provide a good pointer.
While this will give a good indication of the true value a provider will supply, John Stewart,
CEO of security-focused managed services provider Signify, advocates even closer scrutiny, including checking customer renewal records and looking at delivery statistics.
“The best indicator is the vendor’s internal service statistics produced by their service team, rather than official statistics that may have been ‘marketised’,” he says.
Quality of service
Managed services is clearly something you need to consider with your eyes wide open, and the
message from those involved both in provision and on the other side of the fence is to do as
much work possible to verify the quality of service that you are likely to receive. Then make sure
your provider of choice is capable of delivering all it claims it can. _
Top 10 tips for choosing a managed services supplier
1. Ensure your potential supplier understands the business you are in.
2. Identify how focused the potential supplier is on your market sector. Are they ‘all things to all men’, or can they really help add value to your business?
3. Construct a contractual relationship that shares risk and reward.
4. Enter the relationship with the objective that this should be a win–win experience for both parties.
5. Look to see if the potential supplier involves people in the pre-sales process that will be involved in the ongoing service, ensuring continuity.
6. Ensure that the contract is flexible, thus enabling you to make a long-term commitment to the partnership.
7. Build an exit plan for the end of the contract.
8. Seek evidence that the service provider clearly understands how it will address the transitional period, particularly with respect to the transfer of employees.
9. Ensure your staff communicates with the service provider, with the aim of making the partnership work for both parties.
10. Don’t outsource a hidden problem.
This article was part of Computer Weekly's managed services business channel, sponsored by Computacenter.
This was first published in August 2004