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Old 06.02.2013, 14:12
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Managed IT Services

Hi all,

Am totally new here and have some business-related questions. My husband and I run an IT services business near Geneva and we have recently switched our work-strategy from 'putting out fires' to a proactive and, in our view, more cost effective approach of Managed IT Services...

We are finding that not all potential (or current) clients understand or are overly interested in going this route, even though from experience we have found that regular clients who pay per hour as and when work is required actually end up spending more money than it would cost them if they allowed us to manage and monitor their infrastructure in a proactive fashion on a fixed-fee basis.

I would love to hear your insights on this matter as IT is so crucial to the running of businesses nowadays, I'm pretty sure you all have a tale to tell!

If you are a business leader, how do you approach appointing IT service providers? What do I need to know to be able to speak your language?
Do you have any off-the-cuff advice you could you give us about marketing IT solutions to a leader / owner of a small or medium business?
Have you heard of fixed-fee IT service providers in Geneva, what are your experiences of them?

Basically, if anyone has experience in this field I would love to hear your thoughts! Managed Services Packages are quite new to Romandie where we cater but are widely used in the US and the UK... just don't seem to be able to convince people it's the best solution for them compared to what they are currently used to!

Thanks for taking the time to respond! Really appreciate it!

H
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Old 06.02.2013, 14:38
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Re: Managed IT Services

Hi,

So my feedback is not Geneva centric but Switzerland or EU in general. I am in the business of Procurement, Outsourcing and Offshoring for a Big Pharma and I have noticed that internally there is always a mental block when it comes to Managed Service, Fixed Fee or Outcome based contracts. This only because (generally speaking) people in IT here are very used to Time and Material based contracts which they feel are better from a controlling perspective.

You really have to look at their objective here.. The reason why they would hire a company such as yours (in most cases) is to staff augment their teams due to lack of specific skill, lack of internal head count, quick ramp ups and ramp downs or like you said 'put out fires' etc.. This is basically because the Outsourcing maturity level in the EU is not as high as the UK or US where cost savings is only one of the many objectives that the business wants to achieve such as higher quality, core vs non core business decisions, strategic long term capacity goals, long term partnerships with certain companies etc..They have been in this game long enough to weigh out the trade offs and the wins. In the game of outsourcing there is no golden bullet and for me or my team when we support our internal colleagues the first thing we try to do is understand what are the over all objectives (from the Customer of IT's stand point) and then work backwards to see how we can create an argument or an engagement which brings the maximum value. Sometimes outsourcing is not the best option and neither is using Cost savings as your only objective. More than one project fails because people arbitarily think that outsourcing is the best option or getting some cost savings will solve their problem.

If I were you I would position your company more from a Service Delivery and increase in Quality stand point. You should try to demonstrate how you would mitigate their risk, how would you increase their performance of service or internal quality, how would give them the flexibility to change models quickly, how will you deliver more outcome based SLA's (will you put some of your FEE at risk if the performance is not optimal?, Will you agree to Penalties?)

I hope you see my point here.. because you will find little success if you come to me and say instead of buying X Resources at Y rate why don't give me everything for a fixed fee or managed service. I will be hesitant because the inherent risk of getting out of that contract if you mess up is far too great for me. Firing contractors if something fails is much easier.

Again, these are generic comments as not all companies across CH or EU are the same in their complexity of business and outsourcing footprint but you get the idea.

Thanks
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Old 07.02.2013, 10:27
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Re: Managed IT Services

Thanks so much for that well-thought out and clear feedback, we will be studying it and seeing how we can change our approach to best suit customer needs... Very very helpful! H
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Old 08.02.2013, 13:28
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Re: Managed IT Services

Supplying the companies with IT contractors/staff as an employment agency is another angle you could consider adding to your services.

Last edited by Pastor; 08.02.2013 at 14:55.
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Old 08.02.2013, 14:34
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Re: Managed IT Services

It all depends upon your client base. If you are working for large corporations or mid-sized companies that have an internal IT group, you'll have a really hard time to sell them "Managed IT Services" based in Switzerland. You'll have resistance from the IT manager (who risks losing his "empire") and you won't be able to compete with near- and off-shore companies who can offer a lot of very cheap resources working remotely.

If your customers are small companies with no internal IT staff, you may be able to convince some of them to pay you a low monthly fee for basic services instead of paying everything time & materials for recurring operational tasks. You need to put a lot of thought into it, though. You need to price your services so that they are interesting for your customers and cover your costs and margin, as well as clearly defining what services are in the package and what will be charged extra. How long do you expect the customer to commit to the deal? Is there a penalty for early termination? Can you terminate the contract if you find that it's costing you money? All of these things need to be put together into a contract, so that there are no nasty surprises later.
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Old 11.02.2013, 11:40
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Re: Managed IT Services

Thanks a lot James AG - we'll be taking all this on board, thanks for taking the time!
H
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