Since the 1990s, outsourcing has served as an effective way for businesses to boost overall performance, lower costs, and free up resources and personnel to create innovative new products. However, in the world of CTRM, outsourcing has evolved beyond the practice of hiring third-party providers to handle administrative tasks and manual labor. Through managed services, companies can now outsource complex tasks such as infrastructure management, application management and day-to-day application enhancement, maintenance, user support, and custom programming.
The Evolution of Managed Services
As the CTRM industry has started embracing managed services, a shift in expectations has occurred concerning capability, services, processes, and providers. Since the inception of the CTRM/ETRM market, CTRM selections and implementations have largely taken the same approach. First, companies navigate a tedious and well-thought-out selection by comparing a slate of known competitors, each with proven capabilities and considerable accomplishments. Then, the companies initiate an onerous implementation, the success of which is largely dependent upon both the customer and vendor’s sophistication in business, processes, and technology.
However, with the unprecedented growth of the gig economy during the last five years, the process has been considerably simplified. So much so that even the smallest companies have incorporated the best technology and support vendors into their business strategies. The modern approach to CTRM selections now follows a different pattern. It begins by hiring an on-staff manager. That manager is then supported by a hybrid IT/business expert and a boutique consulting company. They advise the manager concerning the valuation, trading, and logistics of the company’s target commodity or selected technology. Finally, after assessing the business’ potential SI partners, a vendor with the best qualifications is chosen. Through this revised process, a significant number of small- to mid-sized boutique consulting firms have entered the market and, in some cases, have prospered.
Selecting the Right Managed Services Partner
Despite the growth of these boutique consulting firms, their success isn’t defined by a steady upward trajectory. Market conditions are chunky, slowed by cyclical commodity cycles and arduous budget processes. In many instances, these firms must look for ways to smooth their revenue curves, augment their benches, and keep their highest revenue sources engaged during downtimes.
As a result, many firms have started offering smoothed support contracts under the guise of managed services. Though this is most certainly an intelligent and entrepreneurial solution for the firms, there’s the risk that their customer base could lose interest, be underwhelmed with capability or, even worse, they may not have the financial stability or commitment to continue. Thus, the CTRM industry will start to see a new type of firm emerge. These firms will be specialized, purpose-built managed services firms with the appropriate strategies and expertise to fulfill all necessary CTRM needs. When selecting the right firm for your business, the following four areas will help illuminate qualifications and identify a true long-term partner:
- SLA — Every true outsourced application management relationship is defined and measured by a broad, transparent, and solid service level agreement (SLA). SLAs are a familiar concept regarding IT systems management, as they provide an outcome-based set of benchmarks. However, they are not a “one size fits all” solution. SLAs must be retrofitted for the markets, business processes, and business operations of the systems they’re governing. When analyzing the SLA of a potential managed services firm, ask the following clarifying question: “Will this SLA improve the way my business operates?”
- Processes — The creation and implementation of operating processes—an area of significant maturity in the IT outsourcing space—will translate nicely to CTRM managed services. When professionally developed and stringently adhered to, operating processes are the hallmark of well-managed systems. As you evaluate the viability and effectiveness of a managed services provider, dig into their operating guides, process manuals, and the staff’s training on procedures that are specific to your business and specific to the application being managed. These factors serve as great indicators of the professionalism and level of confidence you can have, should you move forward with this provider.
- Personnel and Staffing — Application outsourcing and managed services require a full-time commitment. The firm’s staff will manage all interactions with your organization, shadow your team members, and manage your systems and programming. This staff should be robust enough to provide support 24 hours a day and provide that support at a higher level than you could provide in-house. Redundancy isn’t a conversation limited to hardware or facilities—it should also include personnel. In addition to the size and expertise of the staff, the firm also has a responsibility to keep all team members current on your software’s technology updates, capability changes, and trends.
- Strategy — The managed services firm you choose has a responsibility to provide world-class application support, and to do so, it must have a clearly defined strategy which guides all activity and is constantly refined. A lack of focus on strategy can lead to confusing business models, misaligned priorities, and competing resources. To offer 24/7, expert-driven, top-quality support for your systems, this firm must demonstrate a strong discipline concerning all necessary competencies. Specifically, you must ensure your managed service isn’t hijacked by a conflict between utilization and hourly driven services. You must also ensure your managed service isn’t diluted by a least common denominator approach, in which horizontal, readily available resources—as are prevalent in general IT outsourcing—are used. If you understand the strategic focus of your partner, you can effectively build a fruitful, long-term relationship with your application managed services vendor.
To learn more about moving your CTRM system to the cloud and transforming your business, contact us at 833-282-7333 or by email at firstname.lastname@example.org today to get started.
About Value Creed
Value Creed, LLC, founded in 2016, is a managed services firm headquartered in Dallas, TX, specializing in commodity trading and risk management technology and business process optimization. The firm offers expert-driven managed services, business process outsourcing, cloud enablement, and CTRM complimentary technologies to help CTRM customers achieve optimal value in their software investment. For more information, visit www.valuecreed.com