This article will explain what Application Managed Services are and what are the key benefits that convince companies to turn to external partners and transfer full responsibility for their critical business applications.
As organizations increasingly operate digitally, infrastructure management and potential troubleshooting have become the most vital processes. There’s no need to explain that the inability to resolve any potential issues promptly impacts the company’s bottom line directly. System downtime might cause long-term damage to both businesses themselves and their operational partners.
All in all, today’s digital and interconnected market demands the agile approach, which will (1) safeguard the system’s availability to the users and (2) ensure business objectives are met and systems perform as expected. This is when benefitting from someone else’s expertise (and resources) comes in.
What are Application Managed Services?
Application Managed Services is the service model under which companies outsource the applications’ maintenance, enhancements, and development to an external provider. The goal of the Application Managed Services (AMS) is to ensure the system performance stability (e.g. the applications are running smoothly and enhancements are timely) all while reducing the costs associated with the given application.
Companies, big or small, delegate the full lifecycle support for the existing portfolio of applications (or just a part of the system) under the Application Managed Services model to free up their internal resources. This way, they can focus on your core business and improve user satisfaction related to utilizing the particular application.
Now, what is the scope of the Managed Services?
Application Managed Services constitute an ongoing activity, and the scope usually involves continuous support and Account Management service, active administration, and delivery of system enhancements.
But there is no blueprint to Managed Services – the scope of the Managed Service would differ from organization to organization, and also from application to application within the same organization.
Managed Service can be established either for the set of the application’s functions (one of the examples here would be Service Desk Services; first and second-level support, or Development Teams) or for the entire environment.
This is why, our experts at Seargin develop the vision, strategy and scope based on the specific client’s needs, and provide tailor-made scope and solutions concerning the Managed Service.
Even so, all of the provided IT services are based on the ITIL principles to oversee the business applications throughout the whole lifecycle. And, on top of that, Account Management is always included in the Managed Services model. This means you get proactive support and a single point of contact dedicated to accomplishing your business objectives.
Managed Service can take various forms. One of them is a Team as a Service (TaaS). AMS can also be referred to as a Community of Practice, Center of Excellence, or simply IT Squad. No matter what the label is, all of those alterations focus on delivering global end-to-end support to an entire IT Platform, system, or solution.
Why use Application Managed Services and what are the benefits of the Managed Services?
The main benefits stem from the fact that the Application Managed Services imply transferring full responsibility for the system and remedies are to be paid if the KPIs defined in the SLA are not met. This way, outsourcing the applications’ maintenance, enhancements, and development allows you to:
- Mitigate the organisational risks and delegate full responsibility for certain activities to an external partner At the same time, this does not mean losing control over the application development and its lifecycle.
- Benefit from fixed costs associated with the scope of the Managed Service.
- Achieve higher productivity by freeing up your internal resources to focus on core services and relying on your partner’s resources instead. However, Managed Service can also refer to the main business.
- Benefit from a partner’s expertise, who will distribute the proven and effective processes so that the entire system runs smoothly.
Improved user satisfaction (as measured by the number of bugs and incidents reported by the people using the app or time to deliver the enhancements and new functionalities) is another key benefit that businesses achieve.
Not to mention, that Managed Services established for legacy applications allow companies to free up their internal resources, and actually outsource this tedious task elsewhere.
Deriving the benefits and overcoming main challenges: Application Managed Services best practices
Not all the practices and processes within the Managed Services are created equal – hence the benefits (and results) largely depend on the vendor you choose as your IT Services partner.
To illustrate the statement above, read the article that shows the transformation of a given Managed Service and includes the results the client witnessed over time.
At Seargin, we analyzed around 100 reviews of multiple vendors on Gartner and combined our findings with our own observations to present you with an unbiased overview of the challenges that businesses face when working with vendors under the Application Managed Service model.
We will also talk about the proven solutions and best practices that we had developed over the last 8 years of providing Managed Services.
Challenge #1: Qualifications of the tech talent dedicated to the Managed Service
The level of technical expertise of the teams dedicated to the Managed Service is one of the most common frustrations that managers struggle with. As a result, for many companies “the provided services had not met [their] standards” and the shortcomings in the experience of the provided team were evident.
On the other hand, “technical expertise” is one of the top reasons that make businesses recommend the given vendor.
One of the best ways to understand early if the vendor will be able to deliver the qualified teams is to talk to them. Inquire into how they approach building a team of IT professionals, and what the key criteria are. You’ll be surprised by how much their story will reveal to you. You absolutely should try it
To give you an example, their answers and story will show you whether or not they understand the candidates and IT projects. Or perhaps reveal, that they limit their sourcing strategy to buzzwords – e.g. look for all “Senior DevOps”, and assume everyone with that job title has the same level of skills and experience. Building a qualified team, after all, is an art that requires knowledge and thorough involvement.
Challenge #2: Making a business partnership
work – driving long-term business value
What does it mean exactly? The cooperation evolves to a true business partnership when:
- the vendor suggests improvements and acts proactively, going beyond of what’s required of them;
- the vendor understands your business and its specifics.
- There’s no difference between your in-house and the vendor team.
They say it takes two to dance the tango. But we get it, it’s not every week that you delegate the set-up of the Managed Services.
That is why, as a Managed Services provider, we utilize the “start small, but think big” approach. The approach is based on the Agile methodology (“Activate” step), and comes down to proofing the concept as a first step, and scaling the efforts and the transformation later, after positive results are confirmed.
This is how we are making a business partnership work at Seargin.
Challenge #3: Transparent and real-time communication – especially when things go south
Many vendors out there are found guilty of concealing critical information. Businesses admit they wished their vendor “spoke up sooner and louder” when the scope and timeline derailed and KPIs were declining.
To give you a counter-example, our approach at Seargin involves establishing the situational dashboard – regardless of whether the client requests it or not. This is the standard step to drive home the importance of real-time overview and communication. And that’s how we show our accountability for the given application.
As a client you should never be wondering how the system is performing and who can give you reliable answers – the answers must be there right in front of you, available in real time and on your terms.
Frequent performance reviews between you and your partner are another “must-have” process.
Challenge #4: Knowledge transfer within the Managed Service model
Knowledge transfer is one of the most underrated practices. Proper knowledge transfer ensures that your in-house team will be able to support the system post-go-live. To explain in plain language — you avoid getting dependent on that one vendor and you eliminate siloes.
That is how you stabilize the system performance and empower the application users.
Besides, you don’t want to be working with a vendor whose business model comes down to the “after me comes the flood” principle. The vendor in charge of the Managed Service is there to bring long-term value and stabilize the system performance.
Pay attention to the quality and scope of the knowledge transfer and ensure the proper knowledge transfer.
To give you an example, as a part of the Managed Service, Seargin’s experts analyze past issues and incidents to understand the existing system and dependencies. This analysis, in turn, enables us to identify the critical areas and improve risk management. For instance, architectural oversight might become evident. Or we can come to understand that employees need additional training in particular areas to tap into the full capabilities of the application.
All things related to the Managed Service are properly documented for your business to continue realising benefits for years to come.
It’s time to shift from praising those few people who know the most (but keep that information to themselves), and start building processes that will enable people to document, share and evolve the existing knowledge base for others’ benefit.
Challenge #5: Benefiting from the partner’s expertise
That’s why outsourcing is so popular after all – it allows you to benefit from someone else’s expertise. From someone who specializes in that particular area and has tried and trusted approach to Managed Services. If you, like many other companies, are “not “driven” enough by the consultants” (in the words of one of the companies) – there’s room for improvement.
Benefitting from partner expertise and resources and paying for clearly defined results represent the essence of the Managed Services model. At the same time, it’s important to outline your needs and expectations upfront.
However, expect your vendor to demonstrate the options, explain the consequences, and provide solid chain arguments to get you onboard. Real experts will do exactly that, instead of asking the client to take a leap of faith.
Challenge #6: Defining strict KPIs and remedies
That point takes us back to the expertise issue – as a client you absolutely must be able to count on the vendor to help you develop the elaborate service level agreement, which will lay out the key performance indicators. Those could be the number of system enhancements or incidents on different levels that might occur and many more.
Service Level Agreement is, in fact, a very powerful instrument to safeguard the success of the Managed Service. Many companies on Gartner admit they wished they had developed strict SLAs and clauses to safeguard the benefits and results.
The Delivery Manager at Seargin said it best (not knowing this is going to be the perfect summary for this article):
“Successful Application Managed Service goes beyond establishing a highly qualified team. One needs to orchestrate the team’s work, set clear directions, and ensure visibility and satisfaction of both the client, users, and people dedicated to the project.”