Outsourcing Managed Network Services – Lessons You Should Learn

Driven by the financial needs, demanding business requirements, improved remote network management tools, and competitive managed services market, many organizations are delegating control of their network and these include service management and carrier services to some third party providers.

The advantages of implementing completely outsourced managed network services include reduced COO or cost of ownership, abstracted management, improved operational performance, and access to intellectual property or external expertise. A natural outsourced model may also enable organizations to allocate the internal resources better on core business activities and strategic projects.

But, relinquishing an end-to-end responsibility for network infrastructure without addressing the service delivery model systematically exposes the organization to strategic, operational, and financial risks. To mitigate such risks and maximize the results, businesses must consider these practices.

• Simplify the Process for Service Tower Termination and Provider

First and foremost, structure contract with minimal bundling so particular services may be terminated without impacting some people. For instance, in a certain project that involves offshore provider, the contract was created with separate service towers like network support services, managed router services, contact center management solutions, data center management solutions, and dedicated on-site support.

Knowing that there are well-defined termination processes are in place with the service towers, which may be peeled off makes termination a much credible and effective stick to use once the providers isn’t performing.

• Establish Some Clear SLAs with Defined Credits in Contract

Service-level agreements must ramp up based on the service issue severity, duration, as well as number of the defaults. In addition to that, they must have both non-financial and financial remedies requiring new customer references every 6 months, performance enhancement plans, detailed remediation plans, and much more. To enforce the service level agreements, the business should dedicate the internal resources to keep track of the provider performance, escalate chronic problems with the use of the predefined processes, and address defaults to hold providers accountable.

• Avoid Pushing on the Price Too Hard to Exclusion of Everything Else

As the pricing reduces below the right level, the provider relationship and overall service becomes risking inflexibility, less tenable, and substandard resource assignment as well as poor overall experience. Squeezing providers too much on the price makes the risk of having providers look for some opportunities to gain margins back once the contract is already signed. For instance, they might get rid of the promised resources, demand the change orders persistently for services not covered by contract explicitly, and swap the dedicated or on-site roles for off-site and cheaper shared resources.

• Keep an Internal Ownership of the IT Network Design Services or Architecture

The ownership of such operational functions better positions information technology, aligning the network with the business needs. Moreover, ownership makes crucial internal expertise that may help with the process optimization and network, and support network transition and managed network services to other providers.

Searching for the proper balance between leveraging the resources or expertise of provider while developing an institutional knowledge can be hard, yet it could be achieved. For instance, through assigning the IT responsibility for handling the documentation requirements, this negotiates the capability to hire provider staff that’s assigned to the account and requiring the asset transfer at the termination of the contract.

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