Managed Services Model

Managed Services is widely acknowledged as the best model to adopt for information technology outsourcing. Widely described as the holy grail of technology support, the Managed Services Model is an attractive proposition to both vendors and customers.

Features

• The vendor takes complete, end-to-end responsibility of deliverables for support or a project.
• Vendor provides flat cost for an agreed set of support and project deliverables.
• Budgets are often calculated on the basis of technology forecast and initiatives and set for a certain period of time ranging between 6 months to 5 years.
• For this model to work, the vendor should have an excellent understanding of client systems.
• The role of the client is a reviewer with additional responsibility of contracts management and budget tracking.
• Vendor is responsible for selection of solutions and resources, as well as managing expectations.
• There are clear Service Level Agreements (SLAs) for each project or support deliverable.

Pros

• With flat cost and vendor expertise, the client can fully focus on their core strategic initiatives.
• Vendors may make long term strategic investments that indirectly benefit the client organization.
• Vendors bring best practices into support and projects, making key process improvements.
• Service level approach can also result in delivering significant, measurable benefits to the client organization.

Cons

• Culture mismatch between client and vendor can often result in lack of understanding.
• Process improvements can sometimes result in the reduction of client manpower.
• Client may suffer failures from unnecessary vendor conflict, when there is responsibility overlap in a multi-vendor situation.
• Occasionally, vendors won't be in a position to understand all of the client pain points.