Once a cost-saving strategy, now a competitive strategy

Innovation. Strategic investments. Increased value. Focus on the core business. These phrases are often associated with business success stories—for companies of all sizes. But if you examine every success story, you will still find examples of business and IT practices that make you wonder to what extent leadership is really focused on core excellence and providing value as a business partner.

One simple example involves corporate IT data centers. Being “data centric” is essential to competitive advantage and, thus, a major focus for organizations today. Third-party data centers and cloud service organizations have established strong track records for providing the necessary level of service and meeting risk management requirements, yet companies continue to insist on owning and operating their own data centers—despite scarce resources and fluid technology platforms.

In fact, the data center is just one component of a company’s corporate IT ecosystem (along with networks, storage, computing platforms, databases, reporting and analytics, and mobile devices to name a few). Each component requires defined operational processes, service levels, skilled resources, security and controls, technical maintenance, and around-the-clock monitoring to meet business needs. Covering all these bases is a tall order for many IT organizations.

It is always difficult to give up control—for reasons that range from staff tenure to innovation to concern about an outside organization doing the job as well. As a result, the outsourcing pendulum for their IT functions focuses on areas more strategic to their businesses and customers. In fact, Managed Services has been swinging back and forth over the past decade in terms of scope of services, on- versus offshore delivery, skills, the cloud, costs, and other factors.

Overall, adoption of IT managed services has been slow. In the recent Third Annual Trends in Managed Services study, Comp TIA Research noted that three of 10 organizations have adopted managed services in some form. That rate might even be lower, as there remains confusion in the marketplace over the definition of the term “managed service.”

One of our fastest-growing services

We are seeing a marked change. More and more, our clients are asking us to provide ongoing oversight for their IT functions as they focus on areas more strategic to their businesses and customers. In fact, Managed Services has become one of our fastest growing service areas—and a critical part of the way West Monroe Partners helps clients realize sustained value.

How are clients asking us to support them today? 

Consistent with industry reports, we don’t see clients asking us to “take over” their entire IT organizations; rather, they’re asking us to manage specific functions in the areas of infrastructure, data analytics, applications, and business processes. Providing a defined set of services and support, set with a fixed price, we are able to fit easily into their overall IT structure and operate, in effect, an extension of the their organization.

Typically, we work with clients in one of two ways, depending on their needs: “Transition to Run” and “Hybrid Enterprise.”

In a Transition to Run model, we typically focus on one specific solution that the organization is in the process of deploying. The company has made a significant investment to implement the solution; however, its true measure of success will be in providing sustainable value down the road. In many cases, the company is not equipped to support the new solution on “day one,” for any number of reasons. We support it on a 24/7 basis and deliver continuing enhancements, until the company is ready to take it on internally or decides to run the solution permanently through managed services.

In a Hybrid Enterprise model, we work with clients who aren’t ready for an “all-or-nothing” outsourcing model but who want to transition certain IT functions that are not business-critical or for which they do not have the proper resources to manage.

How do they believe it is helping them? 

What they’re telling us is that managed services allow them to transition IT functions that they perceive to be “non-critical” or “resource constrained” to ensure these functions receive proper focus. Annual contracts provide them with best-in-class operational management, governance, and regular maintenance—at predictable costs. And significantly, this service provides the ability to adapt their operations faster as business conditions change.

West Monroe Partners’ Managed Services solutions are part of a unique delivery model that enables us to support clients with strategy, execution and ongoing support.