IT sector has seen a tremendous transformation in last few years. Customer base of IT service providers has increased in variety and size both, so does the expectations from customers. Customers are now asking their Managed IT Services providers, commonly known as IT vendors, to be more than just a supplier of IT capacity. IT vendors are now expected to be a strategic partner who can help their customers in every aspect of the projects.
IT engagements could be of various types, staff augmentation, time and material, etc. Most of the engagements requires a significant amount of customer involvement and have a higher risk towards customer end. ‘Managed Services’ is an outcome based fixed price engagement, where the agreed services are delivered and measured as Service Level Agreements (SLAs) for a fixed price. Vendor manages this whole service, and the risk of delivering the service is mostly with the vendor. This type of engagement is applicable to any sort of project, be it Custom Software development, Business Software, maintenance, or support.
Managed Services is a good value proposition for both vendor and customer as it provides an opportunity to have better planning for cost and resources. In managed services engagement, a vendor provides the same set of services every year with constant value addition to customer, with the same price as agreed initially. This provides customer to focus on key and core activities rather than managing micro-aspects of the project.
In managed services and Business Applications framework, generally, a governance council governs all the processes and business value activities to ensure that there is no deviation from the agreed processes and outcome. It also follows project management very strictly to ensure proper resource management and deliverables.
Managed Services provides following benefits to the customers:
• Reduced Total Cost of Ownership
• Improved processes without any additional cost
• Better focus on core business activities
• Knowledge management
• Better control on cost and deliverables with proper understanding of schedule
Managed Service has many advantages and could prove to be a successful engagement. It requires both the vendor and customer to work together to bring maturity to the processes and engagement.
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