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In part one of this five-part mini-series outlining five key practices of a successful managed service provider (MSP), I discussed “A Well-Defined and Documented Managed Services Strategy.” Any business without a well-documented business plan is a “bad experience for all involved,” just waiting to happen. A critical part of strategy execution is knowing exactly what product you want to bring to your customers. Hence, the #2 practice of a successful MSP is “A Standard Services Catalogue.” 

The historical view for managed services is, “Whatever the customer wants to buy.” Having a highly customer-centric solution is, of course, a good thing, but creating a different service solution for every customer would be akin to building a custom salesforce-automation application for every individual customer. Software-based fragmentation is the number one enemy of all software development programs. Shouldn’t the same principle apply to services-centric solutions? 

Here’s an excerpt from the full report upon which this blog miniseries is based: “Five Key Practices of a Successful MSP”: 

“Over the past couple of decades, managed services have gone through a fairly dramatic transformation. In the mid- to late 1990s and into the mid-2000s, three types of service providers typically offered managed services: Tier 1 and Tier 2 communications carriers, global system integrators, and IT outsourcers. These companies had tens of thousands of service delivery resources and massive network operations centers (NOCs). Their core value proposition was total cost of operation (TCO) reduction, a.k.a. “your mess for less.” 

These companies sought the largest deals and promised simplification of massive, multi-vendor application and infrastructure environments. Many of these contracts were delivered through raw human resources. Each contract was custom tailored for each customer including the service definitions, the processes, and the pricing. For a point of reference, we’ll call this the Managed Services 1.0 era…

This brings us to the Managed Services 2.0 era. Today’s managed service providers have learned quite a bit from the past. Many are embracing global process standards such as ITIL v3 or ISO 20000. Not only are they embracing these standards for service delivery processes, they’re using them across their service businesses, including tools, processes, and service definitions. 

Leveraging one of these standards in the definition of your managed services offers enables a managed service provider to create a standard catalogue of service offers that are easily understood and consumed by the customer, the sales organization, and quite frankly, the rest of the company. 

A standard service catalogue has additional benefits, such as easier to price and quote, and easier to financially manage. With a standard service offer comes an ability to create a standard, predictable cost. This facilitates more predictable forecasting, profit and loss modeling, and even more manageable fair value (a.k.a. fair market value) assertions—all of which the finance organization loves, and who doesn’t want to keep their finance organization happy?” 

#2 – A Standard Services Catalogue

Figure 1 shows examples of standard managed service offer categories. For a deeper look into standard definition and service catalogue approaches for managed services take a look at the recently published TSIA Service Insight document “Defining Managed Services.” 

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managed services offer categories  

Figure 1: Managed services offer categories.

Clearly, much more can be said about building a standard services catalogue but the key point is that having a solution that is easy to understand for your customer will help facilitate the deal closure process. Having standard pricing and costing to go along with a standard service catalogue will significantly help your internal governance of your managed services business as well. 

Hopefully this will get your wheels spinning with thoughts of the improvements you can make within your own managed services portfolio. 

Don’t forget to stop back each week for the next three weeks to hear about the additional key managed services practices. As always, feel free to reach out to me directly to learn more about managed services and how TSIA can help your MS business.

Read more posts in the “5 Key Practices of a Successful Managed Services Provider” series:

George Humphrey

About Author George Humphrey

George Humphrey is the vice president and managing director of service and delivery research and advisory for TSIA. Given his extensive background, George also directly supports the managed services research practice. He is a networking and communications industry veteran with over 25+ years of experience. Throughout his career, he has held several leadership positions in managed services, including global strategy, product line management, marketing, operations, and client management.

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