How can you assess whether managed services are right for your organization? In the old days, many IT employees used a simple gauge to assess the financial viability of their technology decisions: is there enough money in the budget?
Today, as chief information officers embrace the role of “strategic service broker” to the business, the organization must have a better understanding of how technology decisions impact the financial health of the company as a whole.
In this new role, the CIO may find a valuable ally in the chief financial officer, who can provide financial insight to technology evaluations.
Consider the rise of “cloud managed services,” infrastructure and application services hosted and delivered by an expert partner. According to a Stratecast survey, 36% of businesses currently use cloud managed services. That number is predicted to double in the next two years.
CIO perspective: cloud managed services solve IT challenges
From an IT perspective, the managed services model is appealing. It reduces the burden of hardware and software maintenance; introduces flexibility to redeploy technical resources; and ensures consistent, service-level-agreement-backed application performance.
CIOs are sensitive to the high costs associated with self-managed cloud services, such as infrastructure as a service (IaaS). In the Stratecast survey, IT decision makers said for every dollar they spent on IaaS, they spent more than $3 to manage the service. Most of those costs are absorbed by managed service providers.
But do managed services make financial sense for the business? The CFO can help decide.
CFO perspective: flexible investments support business agility
Contrary to some widely held beliefs, the CFO’s role is not to save money. It’s to ensure money is invested wisely. As such, the CFO brings a different perspective to the managed services decision. For example, the CFO is interested in:
- Granular reporting. CFOs usually report revenue and margin at a business unit or product level. Managed services may offer sophisticated workload-level cost and usage reporting.
- Opex vs. capex. Capital investments (capex) are rigid and come with accounting complexities for things like depreciation. As operating expenses (opex), managed services are a more flexible investment.
- Financial compliance and risk management. The CFO is responsible for protecting corporate assets. The right managed services partner supports regulatory requirements and security needs.
- Flexible workforce. CFOs consider the full costs of maintaining a workforce, including compliance with local laws. Managed services offer staffing flexibility.
Calculating total cost of ownership
Together, the CIO and the CFO have the purview to assess the total cost of ownership for managed cloud services by considering factors beyond subscription fees. The CIO calculates the costs that can be avoided with managed services, such as procurement and maintenance of hardware and software, as well as labor and training. The CFO can help quantify the benefits associated with the continually optimized service delivery of managed services. For example, greater application availability and faster transaction times can result in revenue gains and increased employee productivity.
Whether you are in the information or finance organization, the smartest technology investment is the one that delivers maximum value to the business. By understanding the total costs and benefits, companies may determine that cloud managed services are the best choice for their business.
To learn more about choosing a Cloud Managed Services Provider that meets the needs of both CFO and CIO, sign up for the full report: Are Managed Services the Best Financial Choice for your Business?
Schedule a consultation today to learn more about how Flagship can make a difference for your business.
If you liked this blog, you might also like our Infographic: Main Factors Driving End User Managed Services Decision
Flagship Solutions Group can deliver efficiencies across hybrid infrastructures with&nbsp;a broad range of capabilities. We offer clients theflexibility to select the degree of support they want for each layer&nbsp;of infrastructure&nbsp;&mdash;&nbsp;from basic monitoring and management&nbsp;to long-term arrangements based on an innovation path&nbsp;designed to replace an aging or inflexible infrastructure with&nbsp;new technology.
Infographic: DIY vs MSP
What should you do to keep your IT house in order? While DIY could save more in upfront costs, it can also be a complex and drawn-out process that yields long-term operating expenses. The same principle applies to IT infrastructure improvements, software utilization, and data center management. Here’s a comparison between doing it yourself (DIY) and hiring a Managed Service Provider (MSP) to take on the task for you.
eBook: Top 10 tips for selecting a managed services provider
Everyone’s looking to IT to create business value and innovation. But you’re short on resources. How do you pull that off? A cloud and managed services provider can help.
The right vendor should show you that it can provide skills, processes and resources that exceed your in-house capabilities. Does it have what it takes to help your business transform?
To find the answer, look for 10 key criteria.
White Paper: Using Managed Services to Transform Your Business
Utilizing a managed services provider can help you transform your business by saving you money, keeping you ahead of technology issues and making your employees more productive. Learn more.
Infographic: Choosing the right managed services provider for your IT infrastructure
The pressure’s on. Everyone’s looking to IT to create business value and innovation. But running IT is no easy task these days. A managed services provider can help.
White Paper – IDC: Managed S ervices: Ensuring Enterprise Transformation to Hybrid IT
In today’s digital economy, executives report that aligning IT with business imperatives is a challenge. Plus, newer technologies are driving fundamental changes in how people interact with organizations. To stay competitive, enterprises are turning to managed services providers to help:
• Transform their business by shifting to hybrid IT capabilities
• Gain agility to better adapt to market dynamics
• Optimize productivity and performance
• Achieve integrated hybrid IT service delivery and management
Learn all this and more when you download the IDC white paper “Managed services: Ensuring enterprise transformation to hybrid IT.”
Transforming Your Business to Hybrid IT with Managed Services
David Tapper, VP Outsourcing and Offshore Services, IDC, discusses how enterprise can ensure a smooth transformation to the hybrid IT environment using managed services. To learn more about how you can effectively transition to utilizing emerging and disruptive technology and services, download the IDC white paper “Managed Services: Ensuring Enterprise Transformation to Hybrid IT” at https://ibm.biz/BdH93q
Research Report: Optimized Sourcing in Hybrid IT Environments
Smart companies today are rethinking how they source and manage increasingly hybridized IT environments. In this research report, Saugatuck Technology draws on work they’ve done with hundreds of organizations to help you understand:
- How and why hybrid IT is developing and accelerating
- How to recognize and anticipate critical needs that can increase costs and compromise operations
- How to find the best qualified providers to help you “optimize by outsourcing”
Navigating your Digital Transformation with IBM Integrated Managed Infrastructure Services
To accelerate digital transformation, many companies are adopting new technologies like cloud and mobile, which result in a hybrid, enterprise IT infrastructure.