Many SMEs are reconsidering the way they develop their IT support resources to advance their programme of digital transformation or deal with other changes in their business.
This is driven by the fluctuating demand placed on IT support as the organisation embraces change. The two main approaches are staff augmentation* and Managed Services, with staff augmentation often becoming the default through expediency. In this post I discuss ensuring successful transition from the former to the latter.
Staff augmentation resources may take the form of:
- Contractors who are brought in to handle variable demand - either excessive demand on your staff's current skill set or to deploy skills of a type and at a level not present in your enterprise, usually at a daily or weekly rate
- An agreement with an IT support services practice, to provide services on demand and at a time-and-materials billing rate
In either case you are managing the resource to produce an outcome. In the Managed Services paradigm, the provider manages their own resources to provide the agreed outcome.
This is not a discussion on why to move from staff augmentation to Managed IT Services, but rather how to make the move once the decision has been made. For more on the 'whys', please see my previous posts "7 indicators That You Need a Managed Services Provider" and "Managed IT Services - A Powerful Enabler for Your Business".
The key to a successful move to Managed Services that not merely support but actually enhance your business, is planning and managing the transition.
Understanding What Stays In-House and What Goes to The MSP
This is sometimes referred to as portfolio assessment.
List the IT support functions in your enterprise and categorise them into ubiquitous (e.g. maintaining Windows servers) and unique (say supporting a heavily customised software package). Determine which gain the most benefit from outsourcing and which from maintaining the skillsets in-house. Here is a clue - if you have had to augment staff to support a portfolio item it's probably due to be outsourced! It can be very useful to have a consultant prepare this portfolio, either a prospective MSP partner or an independent adviser.
If the support functions are not catalogued and categorised, you will end up with costly overlaps or risky gaps.
Managed Services Provider Selection
In the context of this post, the key takeaway is to ensure there is a good fit between the MSP's skills, services, resources and culture, and the elements of IT support you are actually outsourcing.
Use the portfolio assessment to drive your selection criteria, whether or not this is part of a formal RFP process. This may seem blindingly obvious, and possibly that's why it is so often overlooked. Not every skill required will be needed constantly or at short notice. The MSP may well use a third party to handle work out of town or for specialised network fabric engineering, but that is something that needs to be called out in the selection process rather than after the agreement is signed! For a larger SME it may be well worth using a consultant to manage this process, but beware - opinions are far more prevalent than skills in this area!
Failure to properly match the MSP to the outsourcing requirements will lead to disappointment and inefficiency.
Managing the Transition
Any decent MSP will have an onboarding process that includes managing the transition from in-house (or a previous MSP) to their own Managed Services offering. A good process involves understanding and engaging with stakeholders including your staff, existing contractors and providers of other services that are not being transitioned.
However you cannot completely abrogate responsibility for a successful transition. At the very least you need to see and approve the transition plan, knowing the requirements of - and impact on - all the stakeholders. Such a transition, especially if involving a paradigm shift, can be quite stressful on your staff and other valued service providers. Only organisations at the high-medium end of SME are likely to use a third party to manage the transition.
Failure to ensure the transition is properly managed may lead to disengagement and conflict.
For a start, success criteria for the transition must be identified in the transition plan. Matching those criteria to the outcome is obvious. But that does not mean we can just say "job done" and crack open the beers.
To truly measure the success of the transition, evaluate the benefit received at set periods after the change - say quarterly. Digital Transformation means that Managed Services need to continue to provide benefit throughout, not merely based on the business state at the time of transition. The degree to which the Managed Service agreement can accommodate the changes in your business is a measure of how well it was drafted to support change in the first place. This can be as simple as ensuring the cost of support falls or rises with the number and type of workloads to be supported, whether they move from on-premises to the Cloud and the movement from owning software licenses to consuming applications as Software-as-a-Service.
Failure to progressively measure benefit gained from the MSP may lead to erosion of value.
The Next Step...
Now for a smaller enterprise that can all sound a bit scary and hard. The processes need not be onerous for a smaller and simpler business. You just need to be aware of the guiding principles and ensure your MSP is too. A modicum of thought on this beforehand will save a barrel of regret afterwards.
Are you contemplating the move to Managed Services? Are you thinking of changing Managed Services Providers? We can help.
Reach out to us and we can help you with advice or guidance ranging from a quick chat to a consulting engagement.
* Staff augmentation in an IT sense is usually a term associated with software developers and their need to manage fluctuating demand without the messy and costly business of hiring and "de-hiring". See here and here for wordy but useful discussions in that context.