The Reallocation Benefits of Managed Services

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The Reallocation Benefits of Managed ServicesBusiness leaders know they must strategically manage all assets to realize their goals and keep their company at the top of its field. However, many focus more on daily routines than optimizing efficiencies over the long term. Reallocating IT resources using managed services allows businesses to make the most of in-house talent and achieve strong business outcomes, optimizing business operations in the easiest, most profitable way

Restructure the IT Department for Improved Profitability

While many businesses realize strategic asset organization is important, they fail to organize their IT departments in a way that supports success. In my experience, IT departments spend most of their budget (and time) on daily operations, leaving innovation and development projects behind.

Many businesses have an interest in innovation, but they simply don’t have the resources to manage daily activities and work on development. Managed Service Providers (MSPs) offer a clear solution for businesses of all sizes. Managed services allow companies to focus on strategic business areas instead of on the daily helpdesk queue—they make updating processes easier, and they streamline other daily business activities, such as data back-ups, software updates, and printing. Managed services are limited only by a company’s desire—or reluctance—to outsource specific functions. But there’s no need to be reluctant about adopting more efficient and economical processes through managed services. It doesn’t have to be an “all or nothing” proposition, either. MSPs can partner with your firm, acting as an extension of your business and enabling the best use of resources across the board.

Uncover the Reallocation Benefits of Managed Services

When you hear the phrase “managed services,” you may automatically think they only work for companies that want to outsource whole job descriptions or departments. While some companies do offer complete services, others focus on becoming business partners, complementing in-house work instead of overshadowing or replacing it. When MSPs act in this capacity, IT departments reap numerous rewards.

Businesses are using managed services in IT to:

  • Fill in gaps on the existing team. IT is a huge field encompassing professionals with diverse technology backgrounds. Even large companies have difficulty finding team members skilled in several major areas. MSPs allow businesses to tap into expertise without hiring another team member.
  • Discover new technology In-house IT professionals are typically great at their jobs and fulfilling core competencies, but they are not always plugged into the latest technology solutions. MSPs, on the other hand, employ specialists in specific technology areas in order to offer service and support for today’s most cutting-edge solutions. They know the right products and have the resources to implement and manage the latest solutions without breaking the budget or taking in-house IT teams away from their daily work.
  • Reduce stress on the existing IT team. Whether you have an IT team of two people or 25, managing all the technology initiatives for an organization is stressful. In-house IT teams are responsible for knowing about everything the company uses. MSPs give IT teams a knowledgeable partner to lean on when crunch times hit, either to help manage unfamiliar and new technologies or to simply reduce the burden on the IT staff during the company’s busiest times. The best MSPs act as a seamless extension of the in-house crew.
  • Save money. Just because your IT team can get the job done doesn’t mean they should. Consider the opportunity cost of allowing your IT team to stay bogged down with daily operations. Your business must budget for the cost of daily work as well as the losses incurred when your IT department is not engaged in more strategic activities or focused on innovation.

Use the Pareto Principle to Optimize IT Activities

According to the Pareto principle (the 80/20 rule), 80 percent of business outcomes (effect) arise from 20 percent of effort (cause). That is, 80 percent of your sales come from 20 percent of your products, and so forth. Businesses have used the distribution concept for years to manage their resources in an efficient manner. The concept also applies to IT assets. If you can discover which 20 percent of IT activities produce 80 percent of your return on investment (ROI), you know the activities to outsource or manage, focus on in-house, and to reduce or eliminate.

Many businesses’ IT budgets also follow the 80/20 rule. This means companies spend 80 percent or more of their resources focused on usual business projects and only 20 percent on change-driving activities. If a business can use MSPs to alleviate even a portion of that 80 percent, IT teams can reallocate their budgetary resources toward ROI-producing tasks. Moving non-competitive processes outside company walls supports internal, competitive IT processes and can set an organization apart from its competitors.

Discover How Managed Services Can Improve Your Business Efficiencies

The IT world is changing rapidly. As cloud solutions, the Internet of Things (IoT), and analytics continue to alter the business landscape, Chief Information Officers and Chief Technology Officers must constantly re-evaluate technology usage and allocate resources to realize the greatest ROI. In many instances, MSPs hold the answer.

However, managed services are not one-size-fits-all solutions. Every company must weigh the benefits of moving processes externally, determine which processes to move, and how large a role the MSP should play.

As you start to consider managed services as a viable option to internal IT management, remember that shadow resources often play an unquantifiable role in operations. Carefully measure the results of a managed services partnership, and give yourself room to scale and modify service agreements to maximize ROI along the way.

This post was brought to you by IBM Global Technology Services. For more content like this, visit Point B and Beyond.


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Daniel Newman is the Principal Analyst of Futurum Research and the CEO of Broadsuite Media Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. From Big Data to IoT to Cloud Computing, Newman makes the connections between business, people and tech that are required for companies to benefit most from their technology projects, which leads to his ideas regularly being cited in CIO.Com, CIO Review and hundreds of other sites across the world. A 5x Best Selling Author including his most recent “Building Dragons: Digital Transformation in the Experience Economy,” Daniel is also a Forbes, Entrepreneur and Huffington Post Contributor. MBA and Graduate Adjunct Professor, Daniel Newman is a Chicago Native and his speaking takes him around the world each year as he shares his vision of the role technology will play in our future.

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