Managed services: Leading the path to cloud IT solutions at scale

Why has the transition to the cloud been so broadly adopted? Simple: cloud technologies deliver greater scalability, agility, security, reliability, and platform capabilities than could ever be provided by an individual data center.

In the early 2010s, commoditized workloads were leading the transition to the cloud and, in the years that followed, the transition progressed to more complex line-of-business workloads. The shift to make cloud – i.e. IaaS, PaaS, or SaaS – the hosting standard was on.

There was also a shift in IT strategy. As a new breed of CIOs moved into organizations championing cloud transition, new ways of structuring IT became essential: partnering with managed services providers. 

Realizing the benefits of managed services

It’s important to note that managed services is not IT outsourcing. In the early 2000s, IT outsourcing had been a failure for many organizations, delivering lower levels of service at higher operational cost.

Managed services providers bring a wealth of knowledge with heightened operational efficiency because they are not limited to a single customer or single project. Providers benefit from key learnings and best practices from a broad range of customers and a broad range of implementations. A high-quality provider will use this knowledge to deliver continual service improvement, ensuring best practices are maintained, and innovation is consistent. 

Many providers also base their business and reputation on achieving pre-defined outcomes. If they fail, and the impact on a client’s business is significant, then an appropriately structured contract will provide avenues for recourse to protect shareholder value. This model generates an exponential relationship between cost-to-implement and value delivered, driving efficiencies in service, supporting expansion, and sustaining the profitability of their client’s initiatives.

Partnering to expand IT resources

Many companies these days reach their customers through applications and IT channels. But most companies are still not inherently IT products or services organizations – their business lies elsewhere. For these organizations, IT teams are often limited in capability and capacity.

Attracting in-house IT talent is hard. In IT, job markets shift quickly. In general, most organizations are looking for similar skillsets, as certain technologies take hold in organizations simultaneously. Prospective salaries are one point of talent competition, but there are many other dimensions, like culture, prestige, and career opportunities that could impact the ability to hire and retain high-quality IT professionals. And, when employees leave, finding a replacement at an equivalent top-tier skill level with a similar salary expectation becomes a challenge. Often, compromises need to be made on either talent level or cost.

Rather than building internal IT teams, many CIOs turn to a lean, in-house strategy. This means keeping high-business value functions in-house, while recruiting managed service providers to build and run supporting essential or commoditized functions. This approach means organizations keep high-value roles, while reaping the benefits of the top-talent pool provided through managed services organizations.

Remaining agile at scale

In-house IT teams are often stretched to maximum capabilities and are not able to be flexible with support when additional seasonal work occurs. This is especially true in agile work environments.

The shift to agile software development brought more rapid release cycles for IT solutions, which required organizations to accommodate changing business priorities. Shorter release cycles at scale cause a crunch in resources, requiring teams to “flex” in size temporarily to manage the spike, then return to a baseline.

Most organizations don’t have the number of contractors readily available in the multiple IT domains needed to scale up resources for a short period to meet a spike in workload. Further, the time and effort to hire new contractors has its own overheads on the organization, making scalability more difficult.

With managed services, finding the right people and ensuring their skills are consistently expanded to meet partner needs is part of the supplier’s business model. Managed services providers focus on demand management, so that services can scale when needed to meet objectives. And, when people do leave, they establish processes to ensure knowledge is retained within the provider, rather than in the heads of individuals.

Seize the opportunity of managed services partnerships

Managed services isn’t new. But the rate of uptake and spend has been significant. With the right partner, a managed services organization can provide companies with a proactive and flexible service that maximizes the committed contractual outcomes.

If managed services is not part of how you intend to execute against your IT strategy, then you should re-assess. The wave is already here, and it’s time to seize the opportunity.

Capgemini’s managed services capabilities can help maximize return on investment of your IT transformation. We can help make sure your transition to a cloud-first platform is as seamless as possible for your business.

Contact us to learn more about our experience as a leading managed services provider.