Two years ago, Deloitte published a report examining the rise of managed services. In it, the firm argued that the rewards for organisations that successfully embrace this would be significant. Fast-forward to the present and managed services have become key for any digital business.
According to research, the global managed services market is forecast to grow from $178.5 billion in 2019 to $309.4 billion by 2025, at a CAGR of 9.6%. Given the benefits a managed services approach offers, including the opportunity to capitalise on expert technology skills needed for sustainable growth, along with the fact that many organisations are moving their resources into the cloud, it is not surprising that this market will flourish.
Unsurprisingly, given their cloud-centric focus, it is the North American and European markets that are expected to dominate the demand for managed services in the years to come.
It is especially on the data centre and infrastructure side where managed services in these territories will prove significant. Of course, this shift towards integrating managed services into existing processes requires companies to rethink how to best structure their in-house skill requirements and what they want to use third-parties for.
Much has already been written about the dearth of IT skills worldwide. Many organisations are finding it challenging to walk the line between upskilling and reskilling employees while still focusing on meeting their core strategic objectives. Granted, the increasing sophistication (and accessibility) of technologies such as artificial intelligence and machine learning have made it an easier proposition, but there is still a sizeable skills gap to fill, especially when it comes to data-specific roles.
Less complexity
This is where managed services fulfil an important role for a digitally-led organisation. As companies increasingly adopt new technologies, thanks to developments in cloud, mobile and analytics, they need trusted partners to help them optimally manage the complex hybrid environments that result from integrating these solutions into existing processes.
IBM research shows that 41% of companies indicate they are lacking the platform expertise required to fully adopt hosting and cloud services within their organisation. It goes on to state that using a managed services provider with deep expertise across all delivery models and vendors should be fundamental when it comes to leveraging this approach.
Given how the global managed services market is expected to grow, now is the ideal time for companies across industry sectors looking at incorporating elements of it into their operations.
This will enable the company to achieve an integrated strategy that combines in-house expertise with managed services, outsourcing and cloud services, structured in a way to meet its unique business demands.
Given how the global managed services market is expected to grow, now is the ideal time for companies across industry sectors looking at incorporating elements of it into their operations.
One of the most important considerations when it comes to managed services adoption is the fact that it empowers the business to scale as needed. This scalability can be in any direction as it is generally dictated by the evolving technology and data needs of the company. The ability of the managed services provider to promptly respond to changes in demand is essential.
Selective skills
Additionally, research has shown that managed service providers can decrease the overall IT support costs of an organisation by as much as 50%. This means that instead of being worried about technology, business owners can focus on growing the company while still being able to capitalise on highly trained IT experts using global best practices across the cloud and data management.
This, however, does not mean a company should ignore the reskilling and upskilling of its employees.
Instead, the managed service capacity gives it the freedom to be more selective on which IP to retain and what specific elements to train staff on. By not having to do this as broadly as possible, a business can be focused and unlock more technology benefits from driving data analysis, machine learning engineering, and other functionalities within the company itself.
Managed services certainly unlock the value of the ‘new’ technology chain resulting from the increasing reliance on the cloud and data analysis. And having things like robotic process automation take over a significant amount of menial functions, mean employees can free up their time to deliver the strategic value an organisation requires for this digital environment.
It is therefore vital that decision-makers do not view managed services as an either/or scenario. Instead, it is complementary to what is currently being done in-house and can enhance operations in new ways.
The potential for growth is still there despite the current challenging market conditions. But for this to happen, a business must embrace managed services as a core part of its digital transformation strategy.
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