[vc_row][vc_column][vc_column_text]Updated December 2018

Outsourcing integration challenges have increased, production workloads, applications, and enterprise systems are moving to the cloud, and security is a top concern for everyone, no matter your industry.

What's next?

Nothing is certain, however, industry watchers expect a number of shifts in IT as it relates to overall business objectives and strategies.

We also expect to see maturation in cloud computing, robotic process automation (RPA), and cognitive capabilities while entities like the call center and business models based solely on labor arbitrage fade into history.

 

1. Industry insecurity reigns

“It will be one of a handful of times that outsourcing will be affected by the political climate, says Rebecca Eisner, a partner in Mayer Brown's Technology Transactions practice. The new U.S. administration has already had an impact on trade agreements, regulations, tax policies, visas, and immigration--which big or small have had an impact on the outsourcing industry, which continues to rely on the benefits of global labor arbitrage. And Brexit only adds to industry anxiety in the U.K. and Europe.

Companies have begun assessing and auditing their contracts to determine the impact, says Christopher A Seidl, partner and chair of the global business and technology sourcing group at Robins Kaplan. “This will lead to deeper discussions between parties, and more renegotiations, over terms relating to currency, changes in the law, and the overall costs of the deal,” Seidl predicts. “They will also seek to add flexibility into their outsourcing arrangements through, for example, new termination rights, rights to move locations, rights to insource, and other similar protections,” Eisner says.

 

2. Security stays top of mind

Information and data security will continue to be a major concern for the foreseeable future. “Traction for advanced security automation, threat intelligence, and security analytics solutions will continue to be robust as enterprises look to build a holistic approach to enterprise security and fend off business risks,” says Jimit Arora, a partner in the Everest Group’s IT services division. “As-a-service models to scale security capabilities and dynamically support cloud-based workloads will also gather steam.”

Vendors will take more of a lead role in protecting the enterprise through security offerings, adds Seidl. “Vendors won't simply be thought of as an entry point for hackers, but rather as an ally for regulators, politicians, and businesses who continue to be challenged in looking for solutions.”

We are already seeing many Managed Services and IT Providers become Managed Security Service Providers which can be attributed to the importance of security in today's business environment.

 

3. Intelligent automation drives down costs

"Intelligent automation and robotic process automation will take a step function forward for certain providers, disrupting existing commercial outsourcing structures and driving down costs and, to a lesser degree, prices in the market,” predicts David Rutchik, executive managing director with outsourcing consultancy Pace Harmon. “This will result in supplier margin expansion, greater savings opportunities for enterprise buyers, the need for enterprises to renegotiate existing outsourcing deals, and the bifurcation of the ‘haves’ and ‘have-nots’ in the marketplace."

 

4. Customers demand more from the cloud

The cloud is no longer new and adoption continues to increase.  “Clients will force cloud providers to mature,” says Adam Strichman, founder of boutique outsourcing consultancy Sanda Partners. “Clients will become savvier about what a cloud service really means, and these ‘me too’ cloud services are going to have to grow up or be kicked to the curb.” Customers will be looking to leverage the cloud as the core platform for new internal and external initiatives, adds Arora. “Enterprises will demand significantly more value from cloud service providers to drive transformation in their business.”

 

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[vc_row][vc_column][grve_single_image image="17730"][vc_column_text]As written on whatech.com

Managed services include all those in-house functionality that is transferred to the third-party service providers for better management. In today's fiercely competitive business environment, organisations want to ensure that their staff focuses on the core competencies of their business and non-core activities are handled by third-party service providers.

Some of the common managed services include lifecycle management activities, IT resource activities, HR activities,.

The global managed services market is forecasted to witness a healthy growth rate in the next five years as more organisations understand the importance and advantages of outsourcing their non-core operational activities.

Managed Mobility Services Market Anticipated to Witness High Double-Digit CAGR

The global managed services market is segmented into managed data centre, managed security, managed infrastructure, managed communications, managed mobility,. All these segments of the global managed service market are anticipated to witness a healthy growth through 2020, with the managed mobility segment forecasted to witness a high double-digit CAGR.

Report: www.futuremarketinsights.com/reports/sample/rep-gb-259

Managed mobility services include the management of smartphones, tablets, and other mobility services required by businesses in carrying out their day-to-day operations. Over the years, smartphones have penetrated every walk of our life and businesses want to leverage on the enormous reach of the mobile phones.

Organisations are using mobile devices to manage their work in an effective manner. Mobile devices are used extensively in the hotel and restaurant industry for allocating seats to patrons on a real-time basis.

Moreover, mobile phones have become an important platform for advertising and marketing purposes, as they offer multiple channels through which a product or service can be promoted. These factors have forced businesses to look for credible mobility management service solutions and this is anticipated the boost the prospects of the global managed mobility services market.

Low Adoption of Managed Mobility in Developing Economies Can Pose a Challenge to the Growth of the Global Managed Mobility Services Market

Although organisations in developed countries are pushing the demand for managed mobility services, it is forecasted that the low demand from organisations in developing nations can curtail the growth prospects of the global managed mobility services. Many organisations in developing economies are concerned about the rising operational costs and they do not want to increase it by outsourcing their mobility activities to third-party vendors.

Moreover, businesses in developing economies tend to use free, open-source software for mobility management, as they do not have the budget to invest in premium software. These factors are forecasted to present a key challenge for the growth of the global managed mobility services market.

The global managed mobility services market is segmented into:

  • Managed smartphones and tablets
  • Managed mobile security
  • Managed mobile VAS

Among these segments of the global managed mobility services market, the managed smartphones and tablets segment is forecasted to expand at a high CAGR through 2020. The increase in proliferation of smartphones and tablets in both developing and developed economies is projected to be the key reason for the growth of this segment.

The growth will be particularly phenomenal in India and China, but the weak demand from other Asia Pacific nations can have an adverse impact on the growth of the global managed mobility services market.

Report: www.futuremarketinsights.com/reports/sample/rep-gb-259

Global Managed Mobility Services Market: Key Players

Some of the key players in the global managed mobility services market include Cisco, Alcatel-Lucent, Dell, AT&T, Ericsson, HP, and Microsoft.

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How to Get the Most From a Managed IT Services Provider

Leaning on a managed IT services provider (MSP) for a subset of your IT services can be a boon. More than just tackling specific domains like email hosting or customer relationship management, having an MSP as part of your IT mix can free up internal IT staff for more strategic projects.

But establishing a strong, strategic partnership with your MSP is essential. Here we take a look at the current state of managed IT services, where companies are employing the MSP model, and how to get the most out of your MSP partnership.

Managed Services Growth is Steady

Managed services comprise the second-most popular business model in the channel today, according to IT industry trade association CompTIA's Fifth Annual Trends in Managed Services study.

Three-in-10 MSPs surveyed by CompTIA ranked managed services as the leading generator of revenue in the previous 12 months, second to the 44 percent that pointed to IT solutions (such as projects incorporating hardware, software, and services), but ahead of other business model choices like value-added resellers (VARs), IT support, and help desk and consulting services.

The study, authored by Carolyn April, senior director of industry analysis at CompTIA, found that the rate of growth of managed services is continuing, but more or less at a steady pace.

"I think the managed services space is moving slowly at sort of the same pace as we've seen over the past five years," April says. "Where we're seeing more momentum right now is the channel that's growing around SaaS applications and SaaS ISVs."

"A lot of these SaaS players are actually MSPs themselves: They've either been born in the cloud or they are existing MSPs that are adding a SaaS component to what they sell in their portfolio," she adds.

Resist the Urge to Bargain Shop for Managed IT Services

Organizations are continuing to turn to MSPs to handle elements of their IT needs as part of a collaborative arrangement with the internal IT department, according to CompTIA’s research. Companies have become more familiar with managed services and are turning to them for certain IT functions, particularly email hosting, customer relationship management (CRM) applications, storage, backup and recovery, and network monitoring.

However, CompTIA is also seeing commoditization occurring because of oversupply, especially at the lower end of the stack. April says this may tempt CIOs to bargain shop for managed services, but they should resist the urge.

"Look for MSPs that understand your business and that speak less about the technology," she says. "I think that's important across the board. You want a partner that can talk about business outcomes and how their services are going to help further your goals from a business perspective, not a technology perspective."

Here, April says a proven track record is key — especially customer testimonials from existing customers. She warns that it should be a red flag if an MSP offers you a cookie-cutter service-level agreement (SLA). It's a much better sign if they seek to craft a customized contract based on your business and needs.

Top MSPs Extending Their Reach to Meet Demand

Strategic MSP use doesn’t have to be confined to commodity IT services. Many CIOs, says April, are looking for MSPs that can deliver advanced services, including cloud infrastructure management, application management, and business process outsourcing.

Modern MSPs offer comprehensive cloud services, including cloud migration, management, and optimization. They help businesses leverage cloud platforms such as AWS, Azure, and Google Cloud for improved scalability, flexibility, and cost savings. Additionally, they provide robust cybersecurity solutions, including advanced threat detection and response, managed firewalls, encryption, and regular security assessments.

April also notes increased demand for services around data analytics, business intelligence (BI), and advanced application monitoring. And while some upper echelon services are offering managed services to meet those needs, most MSPs have yet to extend beyond their heritage in managing network infrastructure and basic software infrastructure.

Utilizing automation and artificial intelligence to streamline operations, modern MSPs can proactively manage and maintain IT environments, predict and prevent issues, and improve service delivery efficiency.

"I think mobile is an area where the channel is getting some traction but they're really not tapping the full opportunity there," she adds.

Partners, Not Replacements

It is also important to note that while companies are increasingly relying on outside providers for part of their IT needs, MSPs generally complement rather than replace internal IT.

"Very few of these companies get rid of their IT staffs just because they join up with an MSP," April says.

Instead, especially in larger companies, bringing an MSP into the mix frees up existing IT staff to focus on more strategic projects. Proactive monitoring and maintenance by modern MSPs ensure maximum uptime and reliability, while scalable solutions grow with clients' needs, providing flexible service models customized to specific requirements and budgets.

"It elevates the IT staff and brings them out of the shadows within the organization," she says. "It allows them to focus on a custom app dev project or cloud initiative — something highly strategic. I think that's a win-win for your IT staff."

A top-tier Managed IT Services Provider will align their services with their clients' business goals, helping them achieve desired outcomes such as increased productivity, cost savings, and competitive advantage. They assist clients in meeting industry-specific regulatory requirements and standards, ensuring that IT practices are in line with compliance mandates like GDPR, HIPAA, and PCI-DSS.

That also highlights that the reasons organizations turn to MSPs have begun to change. In the past, April says, cost savings were seen as the primary benefit of MSPs. Now, cost benefits are considered table stakes, and customers are looking for additional benefits like generating revenue and helping the company become more efficient.

Even security has evolved from being considered a roadblock to using MSPs to a reason for doing so. April explains that companies have shifted their views over security as it has become clear that security problems are often the result of human error by internal staff.

Modern MSPs prioritize customer satisfaction, offering personalized services, transparent communication, and a partnership mentality. They focus on building long-term relationships and understanding their clients' unique needs.

By staying current with the latest technological advancements and trends, such as the Internet of Things (IoT), edge computing, and blockchain, MSPs integrate these technologies into their service offerings to provide cutting-edge solutions.

Remote and Hybrid Work Support

MSPs can provide robust support for remote and hybrid work environments, ensuring that employees can securely and efficiently work from anywhere with access to necessary resources and tools.

By leveraging the capabilities of a modern managed IT services provider, businesses can achieve a more strategic, efficient, and secure IT environment, positioning themselves for success in an increasingly digital landscape.

(more…)

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9 things MSPs want you to know - managed solution

9 things your service provider wants you to know

The relationship between enterprise IT and service providers can be difficult. IT has frustrations in achieving optimal service levels. Service providers, as it turns out, have an equal number of bugaboos when it comes to their enterprise clients' readiness for and acceptance of provider intervention.
We asked providers across a range of services what advice they can offer to smooth out some typical bumps in the road for their clients. Here's a look at what they had to say.

1. Focus on the business users' needs, not the technology.

One of the biggest mistakes that enterprise IT makes when engaging a service provider is focusing too much on finding technology to solve the problem instead of fully understanding the problem that needs to be solved.
Consider the problems that can arise if you take a "technology first" approach to data management. Stan Christiaens, CTO at service provider Collibra, which specializes in data governance, says focusing on the technology rather than the problem can create chaos, especially if different technologies are pieced together and critical information is siloed in different groups and departments within the organization. Such a hodgepodge strategy erodes user trust about the reliability of data.
"There needs to be a much greater emphasis and focus on the business users and the processes and methods they use to find the data that's most important to them," Christiaens says. Once you understand that, he explains, IT can help create governance rules and policies accordingly, enabling business users and data scientists to find, understand and trust the data they need to fuel critical insights.

2. Don't get caught in the 'expert' trap.

Companies must be careful to choose services that work for the whole company, not just one person. Catering to power users can get you into a heap of trouble.
This is especially true when it comes to services that rely on certain skill sets. "Just because you have someone on your team who is an expert with a specific tool or programming language doesn't mean it is what's best for your specific enterprise system," says Steve Logue, senior business development manager at Surety Systems, which focuses on ERP systems.
Logue gives the example of a client, a women's apparel company, that had implemented a system primarily because it had an in-house developer who could build custom programs and outbound interfaces for the application. The developer subsequently left the company, making it difficult for the remaining users to "future-proof" the system, he says. For instance, that developer's custom-built programs might break if users installed patches that the software vendor had intended for the off-the-shelf version of its system, Logue explains.
Companies should make sure that the services they choose will still work even if an expert user isn't around to maintain the system. Most providers nowadays have tools that need little customization and easily adapt to updates.

3. Know the problem you need to solve.

"One of the most challenging things for solution providers is that the customer often doesn't have a complete understanding of the problem they're trying to solve," says Jeremy Larkin, CTO at Imgix, a provider of real-time image processing and delivery services.
Therefore, service providers often spend a lot of time trying to understand the client's enterprise environment when the client should have had that information ready before the engagement began.
Larkin acknowledges that "it kind of makes sense" that clients may not fully grasp their own problems, because "part of the reason they're outsourcing in the first place is they have something they don't know how to solve on their own." But it nonetheless "makes things very hard on us, because it means they often can't [provide answers] we need to structure the best solution for them," he adds. "At the worst, it could mean they end up buying something that doesn't actually solve their core issue."
Carlos Meléndez, COO at Wovenware, a software development and engineering company in Puerto Rico, agrees. "By providing more information to service providers, IT teams would help bring more value to the projects and to their own organizations," he says, adding that they could also "potentially save money."
A good place to start is to know the requirements of the system you want to develop. Meléndez encourages IT to work with end users to make sure they capture the correct requirements.
Knowing the requirements in advance enables service providers "to efficiently develop a system that meets the company's needs," Meléndez says, adding that it also enables them "to bid their project fees based on the actual requirements rather than factoring in potential scenarios."
Part of the problem, according to Meléndez, is that IT sometimes sees service provider relationships as opportunities to offload responsibility. "System development is a partnership. To get the greatest value, it shouldn't be about transferring responsibility from the IT team to the service provider, but rather about both strategically collaborating throughout the process," he says.

4. Be prepared to share details of your current IT infrastructure.

Clients that aren't well acquainted with their own IT infrastructures create problems for service providers.
"One of the biggest issues we face on a consistent basis is a lack of knowledge about the current IT infrastructure," says Emil Sayegh, CEO of Hostway, a global cloud and managed hosting provider. "So, before we can begin on transitioning to a public/private/hybrid cloud or dedicated infrastructure, it requires an assessment by one of our solution architects."
When a service provider is forced to study a client's architecture, timelines are delayed, requirements must be revisited, and costs start to rise.
"We run into situations where software is cobbled together running on multiple operating systems and on multiple generations of hardware — and it's still on physical servers," Sayegh says. "It's much better if the customer has made some transition to virtual servers, which is a good steppingstone to the cloud."

5. Remember: Training isn't a one-time exercise.

When engaging service providers, IT shops have been known to budget for initial training on the application but not for ongoing instruction. That's a big mistake, says Sarah Lahav, CEO of SysAid Technologies, a help desk and IT service management provider.
"Things will change," she says. Additional training will be needed when new people join the IT team and new features are added to the system.
Therefore, IT's contracts with service providers should allow for as-needed training.

6. Identify a point person to act as IT's sole liaison with the service provider.

Service providers may have difficulty interacting with IT departments that have multiple silos, so it's important for IT to choose someone to act as a single point of contact.
Nathan Ziege, director of application development at software development and technical services provider GlowTouch, says the client must appoint a technical liaison who can work across the entire enterprise IT team to gather specifications and resolve incidents.
For instance, if Ziege's team is working on an API and runs into a problem downstream with a billing system, they want a champion on the client side who can bring in the person responsible for the billing system.
"Whoever represents the enterprise IT team should be someone who can reach across the various departments within IT to get all the relevant teams on board and ready to participate," Ziege says.

7. Make sure your provider understands how you like to communicate.

Communication can be a big hurdle for service provider-enterprise IT relationships. Service providers must know at the start how the client likes to communicate, including the key systems they use.
"Working on an internal infosecurity team for a security service provider provides an interesting perspective on improving communication," says Katie Ledoux, an information security analyst at security provider Rapid7. "For both sides, whether you're on an internal IT team or a service provider, the first step must be setting expectations, defining goals and adapting to each other's communication styles."
She emphasizes that knowing the specifics of a client's approach to communication — "when to use email, phone, ticketing systems etc. versus more casual channels like Slack or other chat platforms" — can help teams work together more effectively. "No one wants to disrupt another team's workflow," she says. "We know it's not effective."
Make sure to stipulate in your contract the communications systems essential to enterprise IT's workflow.

8. Be as clear as possible about your expectations.

Every business relationship involves certain expectations, but IT doesn't always make its expectations completely clear in contracts with service providers.
One detail that's often overlooked is the metric IT will use to gauge whether its expectations have been fulfilled. "Trust can only be built and maintained on the basis of mutual clarity. Therefore, transparency of IT's priority measurements for each service provider relationship is foundational to success," says Michael Hubbard, global vice president of ServiceNow's Inspire advisory program.
Enterprises must be clear from the outset which metrics, such as cost, quality, availability, value and adoption, they plan to use to judge how well the service provider met their needs.
"Service providers can optimize their delivery in many ways, but don't make them guess on your priorities, nor on how you will measure their achievement," Hubbard says.
He recommends an exercise where the enterprise envisions a future headline it would share in an internal memo defining the success of the engagement with the service provider. The headline would include quantifiable outcomes, such as cost savings, the project's deadline and projected ongoing returns on investment.
Hubbard says this exercise helps everyone work toward the same goal. "Day in and day out, especially in times of crisis or tough decisions, this anchors the team," he says. "When weighing the options of going right versus left on a topic, asking which route best supports the outcome quickly drives to a preferred direction of action."
SysAid's Lahav says enterprise IT should manage contracts by the "spirit of the agreement" rather than the "letter of the law."
"Service providers rarely try to fail against contracted service levels — it's bad business to do so," she says. So, while some type of remedial action may be necessary to address persistent failure, she suggest that, in general, if a service provider is working hard to meet tough service-level targets, it might be better to evaluate the provider's performance on a monthly basis, in the context of the full duration of the contract, rather than on short-term results.

9. Understand that service providers have been hired to help, not harm.

Enterprise IT teams can be wary of working with third parties, especially if it wasn't their idea to hire a service provider. Therefore, service providers spend a lot of time — sometimes too much time — trying to convince IT that they are there to help.

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As one of the biggest, brightest and friendliest IT companies in Southern California we want you to take advantage of our free security assessment or just request a quote for managed services. We can even work on your behalf to get appropriate projects funded by Microsoft. Call Managed Solution at 800-790-1524.

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3 reasons remote server - managed solution

3 Reasons to Use an MSP for Remote Server Monitoring

Is your IT department overworked and outstretched?A Managed Services Provider (MSP) can provide cloud-based remote server monitoring to reduce workloads free up your IT resources.  In today's business environment, keeping a network running smoothly is never easy, especially when one IT department is trying to manage every project.  Here are three reasons to use a Managed Services Provider for remote server monitoring:

1) Cut costs

With options like Pay-As-You-Go, a cloud-based remote server monitoring can save you money while allowing you to scale your company up and down as much as you'd like. In addition, you won't need to hire expensive, highly specialized IT administrators to run your networks. A Managed Services Provider can do all this for you, making outrageous IT expenses a thing of the past.

2) Managed on-the-go

Get alerts and real-time updates about your network from your MSP. So now while you are on the road to a business meeting or conference, you can check on your network's activity without missing a beat. Stay in the loop no matter what by viewing your network at a glance from your mobile device. Just don't check your network and drive.

3) No-hassle setups

It only takes a few minutes for each workstation or server to be up and running with cloud-based server monitoring.  Even better, there is no user downtime throughout the whole process, so your business can keep on running while everything is being setup.  Worry-free installations can give you time to focus on your business while still having peace of mind that there won't be any software compatibility or vulnerability issues.

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outsource cloud - managed solution

Cloud services now account for a third of IT outsourcing market

By Stephanie Overby as written on cio.com
In the latest reflection of cloud computing’s impact on the IT services market, outsourcing consultancy Information Services Group (ISG) for the first time expanded its quarterly market index to look specifically at the as-a-service segment of IT and business process services industry.
The as-a-service market, which includes Infrastructure- and Software-as-a-Service (IaaS and SaaS) activity, now represents more than one third of the combined global market for sourcing services — nearly double its share from early 2014, according to ISG. And the firm predicts accelerated growth in the cloud computing segment longer term—both in absolute terms and relative to traditional sourcing activity—as more and more work is automated and moved to the cloud.
CIO.com talked John Keppel, President EMEA and Asia for ISG, about the rapid rise of cloud offerings, the especially sharp increase in IaaS deals, cloud’s new role in digital transformation, and the future prospects for traditional IT outsourcing market
CIO.com: It was already clear that the uptake of as-a-service offerings was rising rapidly. Were you surprised at how big a chunk of the business services market they had consumed?
John Keppel, President EMEA and Asia, ISG:I don’t think ‘surprised’ is exactly the right word.  We’ve known for some time now that the as-a-service sector has been eating into the market share of traditional service providers. How else to explain that contract counts are soaring, but contract values are remaining relatively stagnant in the traditional market? We knew anecdotally that a lot of client work was moving to the public cloud infrastructure and cloud software markets, and we also knew it was time to begin an empirical measurement of that growing shift. That’s why we decided to move beyond our initial examinations of this phenomenon and officially expand the coverage of our [index].
The drivers for cloud have changed noticeably over the past three years. Initially, cloud interest and adoption was concentrated primarily on cost reduction, in line with what we traditionally have seen as a driver for outsourcing. It was an evolutionary process up until about 18 months ago, when we began to see the real cloud revolution: using public cloud infrastructure and software to dramatically boost agility and grow the business.  More clients are taking the savings from deals created a few years ago and re-investing them into their digital transformation initiatives; indeed, the public cloud usually serves as the foundation for many of these emerging services.
CIO.com: Your report looks at all business services. What was traditional and as-a-service IT activity like in the second quarter?
Keppel: Taking a look at the combined market—that is, traditional sourcing and as-a-service activity—we saw overall market value decline 2 percent to $7.9 billion in the second quarter. Compared to the first quarter of 2016, the market was down 9 percent, but still within the healthy range of around $8 billion it has averaged over the last five quarters.

 

Looking for a partner in your business' managed services needs? Call us at 800-790-1524 to learn about all that we offer!

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why automation - managed solution

Why automation doubles IT outsourcing cost savings

By Stephanie Overby as written on cio.com

New research analyzes automation’s impact on the IT outsourcing market, revealing double-digit productivity improvements and specific cost reductions between 14 percent and 28 percent.

Outsourcing consultancy and research firm Information Services Group (ISG) this week unveiled a new research report to quantify the cost savings and productivity gains from automating IT services.
The inaugural Automation Index shows improvements in productivity fueled by automation can more than double the cost savings typically derived from outsourcing IT. Total cost reduction ranged from 26 percent to 66 percent, depending on the service tower, with 14 to 28 percentage points of these savings directly attributable to automation, according to ISG. (The typical cost savings from labor arbitrage and process improvements alone range from 20 percent to 30 percent).
The report is based on cost and labor data from ISG’s database covering outsourcing agreements with an annual contract value of $10 million or more in which service automation is a core component. The index is one of the first to quantify the impact of automation on IT services. Automation-related technologies and platforms improve the productivity of employees by enabling them to do more with less and prevent problems before they arise, translating into lower costs for buyers by not only reducing the number of provider employees needed to perform the work but also by reducing the amount of work that needs to be performed.
The result, says Steve Hall, partner with ISG Digital Services, is a buyer’s market that’s putting tremendous pressure on services providers to deliver more and more savings to stay competitive. “As automation moves up the IT process value chain and into business processes, it will eliminate a significant amount of workthrough problem avoidance and self-healing, and with it, a significant amount of the headcount needed to deliver large-scale ITO services,” Hall said in a statement accompanying the report.

Where automation has the biggest impact

Automation is having the biggest impact on areas in which employees manage physical devices, such as network services. Most IT towers see an average 25 percent decrease in the number of resources required as a result of automation, but certain IT services experience a 50 percent headcount reduction, according to ISG. ISG found that network and voice costs are declining by 66 percent mostly due to the convergence of voice, video and data solutions built on highly standardized and virtualized capabilities, an environment ripe for leveraging automation. Service desk and end user support costs declined by 26 percent due to increased adoption of self help and remote support, the introduction of self-healing functionality, and significant automation of level one and two incidents.

Higher-order automation

Most of today’s automation is focused on computerizing repetitive tasks based on standard operating procedures but more complex automation is beginning to emerge that takes advantage of more advanced data mining and machine learning capabilities, says Stanton Jones, ISG director of research. That higher-order automation can make operational decisions with no human involvement.
In order to seize the benefits of increased automation and plummeting IT services costs, however, buyers will have to transform to more standardized technology stacks across the IT organization. “The more clients standardize things like operating system instances, application interfaces, ITIL processes, and network infrastructure, the easier it is to automate operations,” says Jones. “Standardization means less interfaces, less complexity and fewer decisions that need to be made, therefore, it becomes easier to automate.”
Buyers should also approach process automation tools with standardization in mind. “Service providers are driving increased productivity into their services by using data mining and machine learning to aggregate and correlate data and then improve the quality and timeliness of decision making for routine and repetitive tasks,” Jones says. “Clients can enable and execute these transformations by accepting standard processes and technologies providers bring to the table.”

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