Matt Hooper, CMO of MDS, discusses the managed services trend among telcos and highlights the questions they need to ask. We are seeing and hearing a lot about managed services at the moment; why should operators be considering managed services right now?

First and foremost, the grounds that the global telecoms market is based upon are now so dynamic and fluctuating that keeping pace with the shifting sands of technology, and the demands for an ever greater customer experience,  is a challenge no one organisation is best equipped to manage.

Running hard to “keep the lights on” is a necessary but thankless task – protecting the bottom line but adding little to top line growth. Therefore taking a hard look at which IT services are best provided in-house and which might be better outsourced to a third party provider is critical.

How can outsourcing specific functions benefit the wider business?

In a challenging market, businesses need to be able to focus on their core proposition and excel at what they’re best at, employing specialists to deliver the supplementary/supporting services to a high standard. By doing so, they will free up in-house time and resource to drive the core operations. This is especially true in the telecoms market, where competition is fiercer than ever, and where technology is driving fundamental change.

What questions need to be asked by CSPs considering a managed service approach?

The vast majority of CSPs are looking at static or reducing budgets, with much of their operating capital allocated to keeping their business running – leaving little cash or resource for innovation. This creates a cyclical challenge in treading water and not being able to drive the new technologies and services that will grow their business and allow them to invest in yet more innovative solutions.

To resolve this conundrum, CSPs must now ask themselves difficult questions about their IT function such as:

• Which IT functions differentiate me from my competitors and which, although critical, are well-understood and just need to work efficiently?

• How can I free up key resource in order to speed innovation?

• How do I manage specialist areas and fill expertise gaps?

• Where can cost savings be derived from in order to free up IT budget to fund new initiatives?

• How can I fund, manage and benefit from new technologies?

• Where do I find the resources to get new service offerings to market quickly?

• How do I help to ensure that IT delivers what is expected from it by the business?

• How can I make IT costs more predictable?

• How do I ensure that we stay up-to-date and compliant with evolving standards, regulations and legislation?

Once these questions are asked, CSPs will be able to assess which areas of the business can be considered for being outsourced to a third-party specialist, and which can  be the focus of attention internally.

Outsourcing operations still cause some anxiety among those in charge of the business – how can high quality, consistent delivery and ultimately control on operations are be maintained?

The answer lies in establishing robust, measureable and most importantly, mutually agreed Service Level Agreements (SLAs), which set out in detail what the third-party is expected to deliver, at what quality, and the timeframe. Having a set of mutually agreed and realistic SLAs is critical to ensuring that the service operates as intended and performance is optimised.

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