As Business Risks Escalate, the Case for IT Managed Services Strengthens

The IT talent shortage persists. This much I’ve confirmed from my year-end conversations with customers across a range of industries, from retail to manufacturing to healthcare. As many financial and benefit enticements as they’re offering, execs at these organizations tell me it’s still a struggle to attract and retain top IT talent.

In the United States alone, companies could lose out on $162 billion in revenues annually unless they find more high-tech workers, according to Korn Ferry. And as analysts at McKinsey observed, “Conversations with employers indicate that recruiting top digital talent remains a struggle, with even the highest-performing companies having difficulty hiring workers skilled in high-growth areas like AI.”

Alleviating this skills shortage is among several compelling reasons more organizations are turning to IT managed services, handing responsibility for major components of their IT infrastructure to a third-party managed service provider, or MSP. In a survey conducted by 451 Research, more than 50% of respondents said they currently use MSPs to support their cloud environments, and 73% expect to rely more on managed services over time.

What are IT managed services, exactly? What’s the business case for considering them? Let’s look at five of the key questions organizational decision-makers should be asking as they evaluate whether outsourcing IT infrastructure management makes strategic sense for their business.

 

Q. How do IT managed services work, and in what areas are they available?

IT managed services essentially involve the outsourcing of a component of IT infrastructure  to a third-party provider. The customer pays a recurring, subscription-like or per-usage fee for a package that could include hardware and/or software, plus all the services and expertise that goes into managing the solution. That could include implementing, monitoring, maintaining, updating and troubleshooting the underlying elements of the solution to ensure the customer gets an agreed-upon outcome.

Here in the XaaS (everything-as-a-service) era, outsourced services are available to manage cybersecurity (via solutions such as SSE, short for security service edge, and SASE, or secure access service edge), the communications network (such as a software-defined wide-area network, or SD-WAN), the contact center and much more.

 

Q. Aside from helping organizations alleviate talent risk, what are the justifications for entrusting management of key aspects of IT to an MSP?

Among the factors that build a strong business case for IT managed services:

• IT expertise on-demand. At organizations whose IT and cybersecurity teams are running exceedingly (and perhaps perilously) lean, the MSP can serve as an extension of those teams.
• Cost certainty. Managed services enable organizations to shift a capital cost to a more predictable operating cost, with IT capital costs now the MSP’s responsibility.
• Mitigating risks related to equipment failure and tech obsolescence. It’s the MSP’s responsibility to supply, maintain and upgrade to the most up-to-date hardware and software.
• Maximizing resources. By shifting certain IT responsibilities to an MSP, organizations free their IT and cybersecurity teams to focus on activities that drive revenue and relieve them of much of the distractions and complexities associated with maintaining the IT tech stack.
• Security to counter sophisticated cyber threats. With a managed cybersecurity service, organizations benefit from an MSP’s expertise in assessing their security environment, identifying vulnerabilities, and implementing and maintaining a multilayered security framework on a 24-7-365 basis.

 

Q. How to find a high-quality provider? What to look for in an MSP?

The keyword here is “service.” IT managed services are about delivering positive IT outcomes —guaranteed network uptime, protection around a network and the assets attached to it, etc. — to the customer. You should expect much more than a mere transactional relationship with a managed service provider. So, evaluate them as an independent analyst would. Do your due diligence so you’re confident they can fulfill their responsibilities based on track record, resources and skillset, and that they’re ready, willing and able to fill the role of consultative partner, subject-matter expert, risk manager and problem-solver.

 

Q. Where and when to start in terms of the IT infrastructure responsibilities to hand over to an MSP?

The answer here comes down to risk. Where is your IT stack weakest, most vulnerable and most in need of modernization? In light of the escalating risk of cybercrime, the increasing cost and sophistication of attacks, and the ongoing shortage of cybersecurity skills, a managed network security solution like SSE or SASE may make a good starting point. Approach migration to managed services methodically, starting with the highest-risk pieces of your IT stack. If you’re contemplating a wholesale IT overhaul, undertake it in phases instead of taking a “big bang” approach, so you can get comfortable with how managed services work and the provider. As far as when to implement an IT managed service, look for event triggers like an approaching data center exit, cloud migration or large IT capital outlay.

 

Q. Should we align with a single MSP or work with multiple providers?

If simplicity and ease of management are priorities, independent analysts like Gartner recommend a one-stop-shop approach. For cybersecurity specific approaches, like SSE, Gartner states, “Single-vendor solutions provide significant operational efficiency and security effectiveness compared with best-of-breed solutions, including tighter integration, fewer consoles to use, and fewer locations where data must be decrypted, inspected and re-encrypted.” Working with a single provider can also eliminate accountability problems and finger-pointing among multiple vendors when an issue arises. It can also result in the most cost-efficient strategy.

Not long ago, a large U.S. rental car agency took exactly that approach, purging itself of outdated communications, network and security systems that had put it at risk of losing market share to more tech-savvy competitors, and shifting management of those systems to an outsource partner. Now, with a streamlined, secure IT infrastructure befitting a mature, growing company, it’s reaping the benefits in the form of reduced costs, an elevated customer experience and greater employee productivity.

 

Art Nichol is Chief Technology Officer at Windstream Enterprise responsible for network evolution, hardware and software certification, and technical product development for all business units in Windstream Enterprise. https://www.windstreamenterprise.com/