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Seizing the digital opportunity; the evolution of managed services

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About the author

Bill Padfield is the Group Chief Operating Officer of Services at Dimension Data. Bill joined Dimension Data Asia Pacific as Chief Operating Officer in 2001 and was appointed as an Executive Board member in 2002. From 2003 to 2006, Bill held the position of Chief Executive Officer of Dimension Data Asia Pacific, and in 2016 he was appointed Chairman – that same year, Bill was selected as Group Executive of Services. 

Despite their best efforts, many IT teams are becoming dangerously over-stretched and woefully under-resourced. Under constant pressure to digitally transform, C-suite executives are demanding more from departments, while providing less budget with which to do it. 

IT leaders are being tasked with squeezing as much ROI out of their often complex, hybrid environments as much as possible – and it should come as no surprise that for many, it’s not going too well. In fact, recent research shows that 53% of companies openly admit that limited IT resources are significantly slowing down digital their transformation efforts. 

In order to seize the unparalleled opportunities afforded by digital transformation, businesses must adapt the way they operate. If they don’t, they’ll fail to keep up with the breakneck speeds of the new, fast-growing players: those that are quick, agile, and scale at a blistering pace.

But how can they transform fast, while simultaneously balancing the inherent risks that come with such change? Increasingly, managed services has become the facilitator for speedy, yet secure, digital transformation. It’s evolved from a simple outsourcing model to an all-encompassing approach that allows enterprises to quickly gain access to new technologies, skills and address factors such as speed, cost, quality and risk. 

But how did we get here, and what’s next for the ever-shifting world of managed services?

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Image credit: Shutterstock (Image credit: Wright Studio / Shutterstock)

How outsourcing turned into managed services

Regardless of where they are in the world, people want to log-in to an application, consume what they need and only pay for what they use.

This concept of paying for what you consume is extending to cover hardware and software-based infrastructures too. Historically, managed services providers would offer companies a low price to run their infrastructure and be left to get on with it.

Times change, though. The rise of the bring your own device (BYOD) craze meant employees wanted to use their technology, but have the same access to networks they were afforded before, regardless of device or location. Networks were springing up correctly to cater to these demands, and everything was moving to IP. IT just wasn't structured the same anymore – and it was nowhere near flexible enough to deal with these new demands.

Businesses now outsource so many different functions, that the complexity of integrating them isn't easy. Whether it's HR or finance applications, forecasting tools, or CRM systems – businesses are now desperately looking for ways to integrate, begging to make some sense of their multi-cloud madness.

Managed services – pay for what you use

The emergence of a new generation, platform-delivered managed services solutions changed everything. Managed services providers are now bringing together disconnected applications, platforms and infrastructures in the cloud, offering companies consumption-based business models more akin to the likes of Spotify or Netflix than historical enterprise tech.

People don't care where their apps are hosted, or what infrastructure is backing it all up. They want something that works, and they want to know it's secure. And the same attitude applies in the business world.

It means that the old-school managed services operating model has effectively been turned on its head. For fear of putting all their eggs in one basket, companies are reluctant to move all their services into a single cloud environment, but they still want the consistent, seamless, and affordable service delivery provided by using a single provider.

Companies no longer look to managed services providers to come in to manage their infrastructure, as used to be the status quo – they want to run everything they need on the managed service provider's global infrastructure.

Managed service providers effectively take on the role of a full-time IT professional a business would typically employ to manage time-consuming and resource-heavy daily tasks. 

They shoulder all the inherent security and regulatory risks associated with IT management, at a fraction of the cost, liberating in-house IT and operations teams to focus on more value-add tasks such as improving the customer experience, maximising cost efficiencies, and exploring emerging technologies.

Managed services providers – the master puppeteers

One of the most significant forces in the business services evolution is the abstraction layer that sits above all these different apps and functions, hosted and managed by one single provider.

Called a 'service layer', this overarching provider acts as a puppeteer, handling everything that sits underneath it; from identity management to integration, and open APIs that will integrate seamlessly with infrastructure, to on-premise data centres.

The banking sector provides the perfect illustration. Fast-moving fintechs and challenger banks such as Monzo, Starling and Revolut – who can use agile technologies to adapt their product and services in the blink of an eye – are terrifying established banks, who rely on multiple disparate on-premise systems dotted around the world.

In our increasingly cloud-first environment, those who embrace the digital threat by accepting that going alone is no longer an option will be the ones who remain relevant and successful, but those who are asleep at the wheel or are just too stubborn, won't be around in five years to tell the tale.