A combination of economically unsound circumstances and the advent of cloud computing has brought the IT service management (ITSM) industry to the fore. This comes as no surprise once all the benefits of managed services are taken into account.
According to Brent Flint, services executive for Dimension Data's Middle East and Africa region, ITSM relies on common resources and these should be delivered consistently to various clients. ITSM is finite in its scope, while the client still retains innovation, he says, while outsourcing works on a top to bottom model to include the full gambit.
“In several industries, specifically those which have been under cost pressures for a long time, such as manufacturing, the cost savings when adopting managed services are small, and costs may even increase in an outsourced model,” explains Gavin Halse, director at Adapt IT. “However, the other benefits, such as access to skills, are compelling enough to adopt such a model.”
“It's no secret that outsourcing is not what it used to be. Concepts such as consumerisation of technology and cloud computing are influencing outsourcing decisions today, challenging traditional models,” says Flint. “The good news is that proper planning, coupled with a 'common language' - offered by IT service management best practice processes and procedures - can go a long way to effectively 'bridge the divides' associated with an increasingly heterogeneous service provider mix.”
Mariana Kruger, integrated technology services executive for IBM South Africa, explains that when it comes to comparing cloud ITSM to the service management, it is best to keep the two separate.
“When it comes to traditional service management, for each specific area in an IT shop there is a potential to do managed services,” she says. “With regards to cloud, we have to consider how to provide customers with increased flexibility within the utility model. The flexibility is important, seeing as every year the CEO is expected to cut budget even further.”
Kruger says demands of 'doing more with less' is one of the main drivers pushing the industry into the cloud. “The rise in interest over the last year has been phenomenal,” she says. “IBM has gone from receiving an average of one request per month, now we receive several requests per week.”
Evolving cloud
In essence, Kruger continues, cloud computing provides individuals and organisations new options to acquire or deliver IT services, with reduced emphasis on constraints of traditional software and hardware models. “In turn, this challenges the pricing models related to managed services offerings now fairly entrenched in the services space. The resulting competition drives costs down for clients. It also fuels innovation on how to help clients use technology strategically to support the business.”
The findings of IBM's 2011 Tech Trends Report suggests that cloud is becoming more entrenched in the technical landscape, as more and more organisations move from building cloud infrastructure to taking advantage of it with new services and business models.
"For us, when a client looks to 'off-load' some more of the mundane tasks to the cloud (public, private or a combination) and free up manpower to focus on adding value to the business, they are not 'penny pinching' but working smartly," says Kruger.
Rod Godlonton, executive director at EOH, says: “Consumers are more informed and their expectations are much higher when it comes to IT deployment. It is, however, paramount to consider the consumer's infrastructure. This is where cloud solutions will address a host of concerns that will effectively shift the onus of responsibility to the service provider as far as infrastructure, hardware availability and maintenance is concerned.”
He believes the business model is changing. “Mobility and the tablet trend have greatly helped shift the focus to cloud technologies as a service,” he says.
Flint says ITSM, by definition, is linked to cloud because it has to do with shared capabilities. “Many service providers are now starting to include cloud deliverables as part of their SLAs,” he says. “There is huge opportunity for cloud aggregation in large-scale managed services, although the industry still remains somewhat resistant to putting critical processes on the cloud.”
It's no secret that outsourcing is not what it used to be.
Brent Flint, Dimension Data
Michael Barnett, MDS business manager at Ricoh South Africa, agrees with this sentiment. “Cloud managed services, although around for a long time, are now gaining in popularity. In SA, cloud is a brilliant thing for managed services - it is hosted in a central space, so geographical location is not such an issue,” he says. “That said, however, many are still a bit nervous about the loss of control, security and confidentiality associated with cloud.”
“Furthermore, switching between cloud providers is not as trivial as changing an outsourced IT service provider,” says Halse. “To mitigate this risk, CIOs are investigating on-premise private cloud solutions which allow them to learn the technology in a 'safe' environment and partially mitigate the risk of vendor lock-in.”
He explains that in order to remain ahead, the cloud managed services provider will need to understand not only the company, but also the industry it operates in.
According to Anton Coetser, services director at Triple4, however, a managed IT service does still have a role to play, and it is by no means diminished in any shape or form. “The actual fact is that a managed IT service plays an even more important role in a cloud strategy than ever before. The exact role that a managed service plays is dependent on the type of cloud offering that is being adopted,” he says.
Benefits and challenges
Coetser goes on to say that another cloud challenge, which is particularly an issue locally, is that many South African businesses still want control over most of their processes. “Local companies need to understand that by employing the expertise of a managed services model, it can enjoy the peace of mind that the service is being handled by experts in the field and can better focus on their own core business.”
Mobility has greatly helped shift the focus to cloud technologies as a service.
Rob Godlonton, EOH
Godlonton concurs: “One of the main reasons for the drive towards a managed services model is that skilled resources are difficult to attract and retain. The ITSM model provides more of a guarantee than hiring in-house. A managed service has the talent because it is part of their core business.”
According to Barnett, companies often don't have adequate expertise in-house, yet managed services can provide the level of expertise the business needs to operate optimally - and the client still maintains control over the service.
“Understanding the fast-moving and dynamic nature of the technology environments, including cloud, should be the role of the service provider. However, in many situations, owing to the high rate of change, clients can move ahead of service providers in this regard and look to sourcing a portfolio of managed services from several providers. In this sense, cloud computing can be introduced into enterprises by stealth and around the traditional IT function, for example: mobile mail, social media, cloud storage and backup,” explains Halse.
“ITSM gives you visibility and control,” says Coetser. “End-users don't want to be concerned with the inner-workings of business processes - they just want to know that it is working.”
ITSM, he says, works with intelligent software that identifies disaster before it happens. “And even if things do go wrong, there is a team of specifically skilled individuals that will work on fixing the problem,” he says. “As such, ITSM has a place in enterprises of all sizes.”
Coetser continues: “ITSM is an affordable and beneficial option for smaller businesses. They get access to an entire team of experts that will deal with the business issues and processes - it removes the IT dependency for a smaller organisation. Cloud ITSM also allows staff to work anywhere in the world, making them agile.”
“SMEs much more readily adopt cloud,” says Halse. “They don't have legacy infrastructure weighing them down.”
Current outlook
An increase in software as a service uptake is related to the rise in the use of tablets, explains Coetser. “The more mobile people become, the more they are demanding, and this goes hand-in-hand with higher Internet speed. There has been more demand for software as a service (SaaS), and less for platform as a service (PaaS) offerings.
According to Flint: “Most clients look for cost reduction and efficiency, but compliance and governance also play a huge role because they lead to improvement from best practices. Clients are also asking, 'How can I continue to provide my business with the top-level skills it requires, yet still mitigate risk?'”
The unrestrictive geographical capabilities that come with cloud-managed services are a huge draw-card for many businesses, Flint continues. “Many are looking for a long-distance model that can deliver the same consistent experience globally when to comes to services.”
“It definitely helps to partner with a service provider that can leverage a global network of knowledge, and which has international back-up,” concludes Kruger.
First published in the 22 February 2012 issue of iWeek magazine
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