Painting the Picture...
Technology is seen as a key driver of innovation and efficiency. Today’s CIOs are no longer solely responsible for the management of IT, but now for supporting business growth by reducing costs, increasing efficiencies and driving innovation, all in effort to build a strategic advantage. Keeping an IT environment running smoothly requires constant attention and the availability of a highly skilled staff. Yet, many organizations are overwhelmed by rapidly changing business demands and the ability to retain proper IT talent. That’s what makes managed IT services an attractive alternative to traditional in-house IT service delivery. Managed services can help free you from necessary, but time-consuming IT tasks like monitoring and managing your IT infrastructure. In an effort to help, we offer this eGuide to you to provide and in-depth overview of managed services and what you should consider.
01
Defining Managed Services
Learn about the business value of managed services.
02
How Are Managed Services Purchased?
How are Managed Services Purchased?
Find out more about purchasing managed services.
03
What IT Functions are Delivered as Managed Services?
Common types of Managed Services.
04
Why Businesses Are Demanding Managed Services
Why Businesses are Demanding Managed Services
Managed Services can help IT combat challenges while delivering maximum value.
05
The ROI of Managed Services
Learn the key considerations for calculating the ROI of Managed Services.
06
Selling Managed Services to Your CFO
Selling the Idea of Managed Services to Your CFO
Be ready to sell the idea of outsourced IT support to your CFO.
07
Considerations when Selecting a MSP
Considerations when Selecting a Managed Services Provider
Not all MSP's are the same. Find out what to look for in a partner.
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Free internal resources to focus on more strategic business initiatives
Be proactive versus constantly living in a break-fix mentality.
Leverage a team of experts across a variety of platforms, technologies and applications.
DEFINING
Managed Services
Managed services allow a business to:
Many business executives and IT managers are faced with the challenge of keeping up with technology changes to meet the increasing demand for IT services, all while IT budgets are shrinking. Every IT activity needs to be justified to find funding and support. Managed services allow a business to offload IT operations to a service provider, known as a Managed Services Provider (MSP).
The MSP assumes an ongoing responsibility for 24-hour monitoring, managing and/or problem resolution for the IT systems within a business. Managed Services are designed to meet the needs of a wide variety of businesses. Nevertheless, these services have a fixed scope and feature set. Managed services providers create a consistent service catalog that is used by all the provider’s customers.
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Managed services are contracted IT services, with definitive contract durations and terms. The managed services terms are described in a Master Services Agreement (MSA) and a Service Level Agreement (SLA). These two documents define the relationship between the services delivered by the provider and the business requirements of the customer.
PURCHASING
The subscription term can vary and the provider may bill using either a flat-monthly or pay-per-use billing model – depending on the nature of the service.
The MSA provides the complete scope of services a business is contracting from the service provider. The document spells out the service methods and processes, data privacy requirements, and financial penalties for failing to meet the terms of the service contract.
Master Services Agreement (MSA)
Service Level Agreement (SLA)
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The SLA describes the performance guarantees the service provider is making related to the contracted services. These performance guarantees may include infrastructure uptime and availability, service incident response time, and data recovery time objectives.
The subscription price typically is determined by one or more of the following variables:
Number or types of services managed.
Number of users or devices.
Types of services/features that are delivered.
Below is a list of the most common types of managed services your business can benefit from. It’s important to note that this list is not all inclusive and services will vary from provider to provider.
are Delivered as Managed Services?
WHAT IT FUNCTIONS
Applications
Backup and Disaster Recovery
Cloud
Database
End User Support
Network
Security and Compliance
Servers
Storage
Types of Managed Services
Managed Applications
Services can include:
Monitoring Reporting Patching/updating Security Configuration Incident management of applications
Managed Backup and Disaster Recovery
customized disaster recovery or backup plan based on a business unique needs
Modern Workplace and Collaboration
Services can provide support and management capabilities for:
Voice Video Contact center Collaboration
Managed Database
Deployment Configuration and monitoring of database application Database management documentation Monitoring Administration Security management
Patch/hot fix management Centralized virus control for desktops associated with a managed IT environment
Managed Network
Autonomously managed wireless access points Load balancer appliance management Router and WAN management Switch and cloud management
Managed Security and Compliance
Web content filtering Firewall management Email archive Continuity and data protection services
Managed Servers
Monitoring Reporting Patching and updating Incident management Configuration management Security management
Managed Storage
Remote monitoring and mangement Deployment Updates Troubleshooting
Hosted private cloud Hyperscale public cloud Compute Storage Data management Backup and disaster recovery
As data center technology changes and increases in complexity, the difficulty of finding, hiring and training specialized IT staff is increasing. Similarly, as companies grow and new divisions or remote offices are added across disparate time zones, it is becoming more challenging to provide around-the-clock IT support.
for Managed Services
THE DEMAND
Freeing in-house IT talent to focus on core business objectives by offloading IT management to a third party expert.
Increasing operational efficiency, reducing risk and increasing agility scalability.
Achieving better economies of scale.
Managed services help IT teams combat their challenges while also delivering maximum value to the organization by:
According to research firm MarketsandMarkets, the managed service market size is expected to grow substantially in the next five years.
$223B
$328B
in 2020
in 2025
8.1%
Compound Annual Growth Rate (CAGR)
What's Driving the Rapid Adoption?
Gaining access to world-class expertise and capabilities.
of Managed Services
THE ROI
With managed services, businesses can shift their spending strategy, freeing up resources and potentially cutting costs. But how can you make sure your business will reap these benefits? How do you begin to figure out the ROI of managed services?
Opening up cash flow
Opening Up Cash Flow
Traditionally, IT expenses have fallen under the umbrella of capital expenses or CapEx. With managed services you can move from from a CapEx model to an aOpEx model. You only pay for the services you need, reducing in-house IT costs. Benefits include:
Expertise
Downtime
Cost Savings
Enhanced Levels of Service
Easily consumable, per line item type of service offering more granularity.
No upfront investment in most cases (or minimal to get things on-boarded to managed services).
Predictable cost model/growth model.
Expertise Without Hiring a Full-Time Employee
Keeping an IT environment running smoothly requires constant attention and the availability of a highly-skilled staff. By taking advantage of managed services, companies can eliminate the burden of finding and retaining talent with all the necessary skills. Benefits include:
Access to service provider expertise and capabilities across multiple technologies.
24/7 support without having to staff internally for it.
Today’s businesses are heavily dependent on IT. This increased reliance on 24/7 access to data and mission-critical applications to get business done, makes high availability a top priority for IT. Managed service providers can help ensure uptime, security, power and redundancy requirements are met. Benefits include:
Transference of responsibility and SLA to a service provider.
Leverage of a much larger team to ensure a timely resolution.
Guaranteed/contracted SLAs for the services provided.
Recommendation and second set of eyes to provide architecture recommendations to help avoid unplanned downtime.
CIOs are not only tasked with the management of IT, but also with supporting business growth by reducing costs. Organizations are also being asked to do more with less resources. Managed service providers are a key component to ease the burden and free up IT staff to focus on strategic, mission-critical projects. Benefits include:
Cost savings, dependent on the managed services level provided and services transitioned.
Ability to refocus of IT staff to core business initiatives.
Many managed service providers offer a comprehensive suite of services such as cloud infrastructure, application, database, network and security management solutions and often, employ best practices, especially the ITIL (Information Technology Infrastructure Library) approach. Many internal IT departments just can’t match this level of service. Benefits include:
Enhanced security.
Change management provided by service provider.
Comprehensive reporting and visability.
ITIL framework.
Access to enterprise monitoring tools and software.
Does your CFO play an integral role in your IT outsourcing decision? If so, are you struggling to speak the same language to get their buy in?
of Managed Services to Your CFO
SELLING THE IDEA
Calculate the Costs
Think Like a CFO
Consider the What-Ifs
Explain the Non- Financial Values
Consider Portfolio- Management Principles
Get the CFO to Sign Off on Terms
Keep Some Things In House
Measuring Success or Failure
Here are a few ways to help sell the idea of outsourced IT support to your CFO.
Calculate the costs
Prepare to give detailed comparisons of in-house IT costs vs. outsourced IT costs. The comparison should include the CFO’s objections, and consider the impact of potential inflation, deflation, demand management and anticipated growth or contraction.
Try to understand your CFO’s objectives so you can compile data from financial statements that proves your point. You might also consider adding financial staff to your IT department so they can help develop the statistics to support your argument.
Explain the Non-Financial Values
List the cost-savings that would result from outsourcing IT, including diminished compliance and security risks that will avoid potential penalties.
Look at IT Outsourcing from a Different Perspective
Consider Portflio-Management Principles
CFOs consider business decisions as portfolio management. They’ll want to ensure outsourcing is a cost-saving methodology. Back this argument with statistics.
Get the CFO to Sign Off on the Terms
If you outsource IT, this may mean that you have to take on costs for updated infrastructure and remediation. Be sure to analyze the pricing schedules, necessary asset sales, and buyback provisions, as well as other aspects. Put your plan on paper before presenting this to your CFO.
Why You Want to Keep Some Things In-House
Your plan may mean that some services remain in-house; explain why doing this is a good idea.
You’ll need to evaluate the success of outsourcing IT. Metrics are important for evaluating the impact on your business in the future, and your CFO will demand a method for evaluating the success of outsourcing IT.
Use a Different Perspective
CFOs worry about risk management; how will the outsourcing plan work if the business doubles in size; or if it sells one of its units? Be ready to explain how your IT plan will work under a variety of situations.
Outsourcing might save your IT department money, but it could also add costs in other areas, such as audits, travel, security or communications. Your CFO will look closely at these issues. Be ready to defend your case.
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Next
Consideration 1: Depth
A growing infrastructure and evolving technologies place an overwhelming strain on an IT department that may possess limited or specialized knowledge. Collaborating with an MSP is an easy and cost-effective way to add professional skill sets to your team. An effective managed service provider has a deep bench of personnel with experience in deploying a wide range of delivery models, including traditional IT, managed services and a choice of cloud models: public, private and hybrid. Even if you’re currently using one model right now, that may change in the future as your business needs evolve. You need a partner that can make the transition along side you, without having to vet yet another partner or service.
Consideration 2: Proactive
“If it ain’t broke, don’t fix it,” isn’t always the best approach, and certainly the wrong approach for managed IT services. Managed service providers need to be proactive and constantly working to improve operations to prevent problems such as unplanned network downtime or a data breach. Threshold based predictive analytics are implemented throughout, ensuring the MSP knows before something breaks. Proactiveness is key in securing your managed assets against threat. An experienced managed services provider is diligent in patching and addressing exploits before they become security compromises.
Consideration 3: Knowledge & Processes
Managing your systems and infrastructure is your managed service provider’s primary business, and therefore, they need to be up to date on the latest technology and employ best practices. When choosing an MSP, you should also consider the knowledge and experience of the company and its team. A reputable MSP will have staff who have earned industry certifications and have established partnerships with major vendors, demonstrating their proven ability to understand and manage various components of technology. Best practices, such as the ITIL (Information Technology Infrastructure Library) framework, aligns business goals with IT requirements, such as utilizing a service catalog, standardized operational procedures, and customer operations handbooks and run books. Ask your managed service provider for a list of their best practices and ensure their processes are validated with a commitment to annual audits.
Consideration 4: Coverage
Service Level Agreements (SLAs) are critical for you to review and understand. An MSP should include provisions such as: Guaranteed uptime Security Power Redundancy The SLA should spell out procedures for backup and disaster recovery, as well as physical and cybersecurity. In addition to defining the challenges and proposed solutions with response times and metrics, SLAs should include qualifying details for service credit when performance metrics are not met. Be diligent in your SLA review to make sure that you have a strong contract in place that covers all your critical requirements.
Consideration 5: Flexibility and Versatility
As your business grows and changes, your managed service provider needs to assure you that they are your true partner and accommodate your changes - with flexibility. Require that your SLA spells out exactly how your managed service provider will address issues such as spikes in traffic, overall growth, migration to other operating models and even downsizing. As more and more organizations are moving towards a hybrid IT approach, remember that hybrid IT is not total outsourcing. It’s maximizing your investments and supplementing with just the right level of third-party support. This means you need a MSP that is diverse and can offer services where you require them. Providers should be able to offer services in multiple IT environments, regardless of the deployment model. Ask any potential partner about their experience in managing services in a diverse range of environments.
Consideration 6: The Right Tools
Since MSPs have already invested in the advanced technology and training necessary to build an expert team and systems, by leveraging a shared model, you gain access to the best tools and talent available to manage your IT environment — without having to invest in costly software solutions or stay on top of upgrades. Advanced managed services require the ability to deploy a proactive service level toolset that monitors all aspects of an environment, including the core internal network infrastructure, virtualized servers, storage and both internal and cloud-based applications and resources. The right tools enable predictive monitoring services that help ensure uptime and higher service levels via proactive and reliable notification of potential issues. Your MSP should utilize a service ticketing system that allows you to submit a ticket and automates workflow for triage, prioritization, scheduling and escalation. Ask for a demonstration of their tools and validate they have the right solutions in place to keep you up and running.
Consideration 7: Stability
Make sure that the provider you select is a well established, stable business that will be around for years to come. Check customer retention numbers and their financial history, as well as growth in a variety of vertical markets. Although many MSPs offer monthly plans, it is better to approach an MSP relationship as a long-term partnership. Managed services aren’t a quick fix situation. It takes time, often months, to develop a mutually-beneficial relationship with an MSP. It’s key that a thorough understanding of your business goals, challenges, current environment and expectations is established from the onset. Shy away from providers that promise instant results. By taking the time necessary to develop a long-term relationship with a well established provider, you will save money in the long run and benefit from an IT environment that is more scalable, resilient and in alignment with your goals.
Consideration 8: Availability
Your IT needs aren’t limited to 9-5 business hours. One of the major advantages of managed services is being covered 24 hours a day, 365 days a year. Ask potential providers about their availability, and ensure that they will be monitoring and managing your systems around the clock, year-round. Make sure that your MSP has designated and provisioned support personnel readily available to help. Ideally your service provider has a Network Operations Center (NOC) who is monitoring your infrastructure health and can work with you immediately, regardless of the time of night. Try calling the number they provide at night and see who answers.
As you’ve learned, a managed service provider can be a true partner by developing a relationship that ensures that they understand your business and will choose the right applications for the right platforms to maximize your value. Many MSPs do not offer a full service offering that extends beyond managing network infrastructure and basic software infrastructure. The decision of which service provider to partner with will shape the future of your business, so it’s important to know what to look for.
when Selecting a Managed Services Provider
CONSIDERATIONS
Whether you are looking to outsource all or part of your IT needs, OneNeck IT Solutions is a turnkey, full-service managed service provider with 20+ years of experience. Our certified experts are experienced in deploying services in a variety of IT environments, and our goal is to improve your efficiency so your internal IT staff can focus on your strategic initiatives. Our goal is to offer best in class services using our tools, our technology and our tried-and-true best practices. We’re here to give you relief from the mundane so you can focus on the strategic. Learn more about OneNeck's managed services offerings by visiting our website.
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