Why managed services fail

Below are some key steps. Depending on the cause of the shortfall, your contract may give you the right to lower your commitment level. Next, you should forecast whether, and when, the gap between your spending and the revenue or usage commitment will be closed. When cost overruns are a major source of pain and suffering, you should uncover the specific service elements or prices that are causing costs to be higher than expected, and then determine the steps you can take to reduce consumption of these services as an interim step.

As a longer-term correction, consider moving the expensive services to an alternative cheaper provider or replacing them with lower-cost substitute services from your provider. Depending on your agreement and service bundle and the commercial flexibility the contract provides, there may be other cost-reducing options available. Relationships with large IT suppliers are routinely complex and multifaceted.

By developing a full understanding of the total spend and portfolio of services, you can identify pockets of negotiation leverage. Here are the latest Insider stories. More Insider Sign Out. Sign In Register. Sign Out Sign In Register. Latest Insider. Check out the latest Insider stories here. More from the IDG Network. What is outsourcing? Definitions, best practices, challenges and advice.

What is an SLA? Best practices for service-level agreements. The hidden costs of outsourcing. Why deals fail While the root cause of failed IT service agreements is always context-specific, there are some usual suspects. Cost overruns — The provider performs the scope of services but its charges are far higher than the customer expected. Strictly Necessary Cookie should be enabled at all times so that we can save your preferences for cookie settings.

If you disable this cookie, we will not be able to save your preferences. This means that every time you visit this website you will need to enable or disable cookies again. Buy Marketing Services Now. Data science providers, internet-of-things service providers, mobile service providers, security service providers. My vision is of the day when our industry rivals medicine and law.

Thanks so much for writing this, Joe. The channel really needs to wake up to itself and not let the naysayers dampen our enthusiasm! Joe… Inspiring content as always. Being in the IT services industry for over 30 years, there are repeating patterns that every 5 or so years technology and thus the IT services industry business model changes. The survivors and thrivers are those who can recognize these changes and adapt to them creating value in the marketplace.

However, as you point out, there are greenfields out there begging for companies to help them navigate all the changes in the marketplace. Who is it going to be?? Thanks again for a great article. Name a last-generation retailer, healthcare provider, restaurant chain, transportation company, financial services firm, etc. Very well written article. There are about a quarter of businesses around the world that outsource their technology infrastructure — and no one is forecasting that to go away anytime soon.

The market is maturing, prices are compressing in many areas, consolidation is afoot — but the strong are growing stronger and natural selection is winding it course. Salesforce just announced they need , new partners to double their business in the next 4 years. Microsoft is bringing on 7, new partners a month.

AWS has doubled their partner base in each of the past 3 years. The elephant in the room is that these are not recurring revenue opportunities.

Taking advantage of AI, automation, IoT, blockchain, and all of the other emerging technologies over the next 10 years in front of line of business buyers will take a project or software based approach. The successful MSPs of the future will have 2 parallel lines of business — infrastructure and non-infrastructure.

They will compete and win amongst the 20 winning mega-ecosystem marketplaces, and the top echelon will grow themselves into unicorns. PS: I promise to write part two of this blog when Jay and I are neighbors in Florida, circa or so.

A recap of how it all played out. For better or for worse. Coffee still involved, either way. Agree to everything said. The one constant in my business has been the big winners in the SMB space have not been the ones specializing in a technology niche.

They specialized in a vertical niche, creating a turn key business solution, and adds modernized technologies where they fit. I loved the article…. In regards to Security………. It is not just accessible to Enterprise or Fortune anymore.

Agreed Dustin….. Great read! Thanks for bringing up the ransomware epidemic. Small businesses are slowly but surely waking up to getting more serious about their security. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment.

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