To introduce myself, my name is Jeff Connolly and I am the new senior director of managed services research for TSIA. I’ve worked in managed services for most of my career—in very large technology companies, as well as a very small one—always with a focus on building new technology services in a rapidly changing environment.
When I first started working in tech (telecom) in the late 90s, I caught the managed services fever on the growth potential in managed services. I saw all the Gartner and Forrester hockey stick charts on how huge the segment was going to be and how fast it was going to grow. “Hot crackers!” I thought. “I’ve landed in the sweet spot, fresh out of business school!”
While I didn’t know many things then, I have learned some important lessons along the way, not the least of which is to not drink the Kool-Aid on market growth forecasts. I’ve also learned some very important lessons about managed services specifically, and as my first blog post at TSIA, I thought I’d start with one of the broadest, most over-arching takeaways I’ve had, which is that managed services is an orchestra.
Other Business Functions Are the Instruments That Make up the Managed Services Orchestra
Unlike any other service in a company’s catalog, managed services represents the full breadth and scope of everything a company has to offer. It doesn’t have a choice. Managed services is essentially taking over all the operations, as well as the risk, of running some or all of a company’s infrastructure. This leverages every single instrument in a company’s orchestra in order to be effective, from product, support, professional services, and every back-office function as well, as we’ll discuss in a moment.
This has been a key lesson for me to understand and to share with anyone unfortunate enough to hear me yelling from my balcony. When I first entered the business, in retrospect, my approach was much more akin to joining a rock band. All I needed, I thought, was to learn a few chords, get a few key players together and crank out the power ballads. What took me some time to understand was that this music was far more complex than I had assumed, written for a much larger set of musicians, with different and strange instruments, ideally coordinated and overseen by a conductor who brings all the players together.
Managed services is essentially taking over all the operations, as well as the risk, of running some or all of a company’s infrastructure.
Here are just some of the players in the managed services (MS) orchestra, and how they may have to tune to support one another:
- Successful MS sales is, more often than not, led by dedicated, overlay sales professionals.
- MS-specific sales comp has to be clearly defined, prioritized, and clearly communicated to all constituents.
- MS-specific financial models must be agreed upon across the organization.
- Lower MS margins than expectations must be agreed vs. expectations for maintenance or hardware and software.
- Acknowledgment that outer years of the MS business and each MS contract are the most profitable.
- MS-specific deal review, with rules of engagement clearly defined.
Channels & Theaters
- Buy-in, participation, and championing of MS across and outside of the organization.
- MS-specific support, weaving MS into the overall services story.
Service Operations and Engineering
- MS-specific support, with different goals than traditional business.
- Many MS-specific contract terms need to be drafted and templatized.
- Orchestrating all the players to the same sheet of music.
- Continually prioritizing and championing MS to internal and external audiences.
- MS growth inevitably runs into large obstacles that require the power of the C-suite to overcome.
Managed Services Requires Every Player to Read from the Same Sheet of Music
Because managed services is the only place in a provider where the entire organization’s resources are brought together in coordination to ensure customer success, there are more players than any other segment of the business. The “music” is more complex than the players are used to because it often requires them to work together when they have very little knowledge or understanding of one another. Revenue recognition is an example in which a new understanding of the MS business and the accounting rules that need to be applied must be gained. And importantly, because all these players have to play in time together with this new sheet of music, it works best when it is conducted by a leader who has the ability to direct any action in any area of the business and overcome obstacles that any individual within the group couldn’t do on their own.
Because managed services is the only place in a provider where the entire organization’s resources are brought together in coordination to ensure customer success, there are more players than any other segment of the business.
In a perfect world, all the players understand that they are in an orchestra, that there is such a thing as a shared sheet of music, and that there is a conductor overseeing all aspects of the performance. But, as Moby said, “In a perfect world, I would be 6-foot-3, have a perfect head of hair and look like Orlando Bloom.” Indeed.
My experience has been that there are often many competing visions for how MS should operate to be successful in any given company. When these competing musicians start playing different songs at the same time, it can lead to a cacophony of well-meaning players, each playing very loudly to get their song heard.
7 Steps Toward Successful Managed Services
One of the largest challenges I see for managed services, especially new or growing MS businesses within a larger organization, is the need to recognize that MS success requires a different level of orchestration across more and different players than an organization might be used to.
What does this mean for you in your business right now, and what can you do about it?
- Start with a vision of that perfect world for yourself. What does a well-orchestrated and coordinated MS approach look like for you and your business? Break this down by functional category: Sales Ops, Sales, Channel, Marketing, Delivery, Engineering, Finance, Exec, etc. Here's an example gap analysis and prioritization checklist I've put together that you can use to get started.
- Perform a gap analysis of what needs to get done by function to reach that perfect vision.
- Socialize the vision and gap analysis with each separate function and true up as needed.
- Prioritize and rank order what functions you think you should address first. Don’t try to do everything at once. Instead, pick your top three and work those first.
- For those top three, collaborate with each function to translate the gap analysis into concrete objectives (S.M.A.R.T. goals).
- Work your plan, come back to your vision, true up and re-prioritize as needed, pick the next three functions and keep working.
- Keep socializing your vision of orchestration up, down and across; sell the vision of orchestration and exactly what that looks like.
Need Assistance in Conducting Your Managed Services Orchestra? TSIA Can Help
What music is being played in your company today? Is everyone playing off the same sheet of music? If not, what can you do about it right now?
No matter your place in your organization, I can guarantee you that people are looking for thought leadership in managed services, no matter where that comes from. You can help bring people together right now by thinking about this service as an orchestra, with the detail and nuance that is required to be successful. That’s why TSIA has a dedicated team of researchers helping hundreds of businesses navigate the managed services journey. With our benchmarking programs, fact-based best practices, and deep industry knowledge, we can help your company’s managed services function, as well as your organization as a whole, get to where it needs to be to ensure success.
I hope the above has helped to make sense of an often confusing and disjointed experience that is often the case surrounding managed services. I’d love to hear your feedback and commentary. Please feel free to contact me at firstname.lastname@example.org.
About the Author
Jeff Connolly is the senior director of managed services research for TSIA. He was never in a rock band, but did play trombone in a high school orchestra. He is a video and telecommunications industry veteran, with over 20 years of experience in managed services and Cloud delivery models. In his role at TSIA, Jeff provides members with fact-based education and insight into the performance and operations of managed services providers of all sizes.