How to Migrate to Managed Services: Four Critical Steps

By Wayne Kiphart  |  Posted 2011-01-24

How to Migrate to Managed Services: Four Critical Steps

Making the transition from an all-internal IT team to outsourcing key technology tasks to a managed services provider (MSP) is often the hardest step to take on the road to a more successful, better run and more cost-effective business model. To succeed, you have to realize that no one is getting a huge IT budget increase these days. The only way to keep up with the changes in business today is to rethink how you deliver IT to your company.

When organizations consider different ways to support their IT environments and increase return on investment, they must first determine how outsourcing fits and what opportunities exist for outsourcing selected IT tasks.

Really, it comes down to four strategic steps. If you follow these steps, you'll be well on your way to a solid, cost-effective IT outsourcing program that makes sense for your company and your specific business model.

Step No. 1: Start at the pain

Define the specific IT tasks that are candidates to be outsourced, choosing the technology areas within your company that you already know could be working better. Establishing a clear set of objectives at the outset and a defined resolution to the problems causing these pain points is critical to a successful outcome.

Step No. 2: Calculate your costs

The goal of outsourcing, while multifaceted, always includes a desire to reduce costs. This means conducting an assessment of the real costs of the tasks you are considering outsourcing and determining how much time personnel spend on these tasks. Then you can compare these costs to your outsourcing partner's service contract, determining what your savings can be.

Figure Out Whos Who

Step No. 3: Figure out who's who

Create an action plan that you can use to compare different providers' offerings and service-level agreements (SLAs). Be sure you compare apples to apples. Don't underestimate the value that services delivered on Information Technology Infrastructure Library Version 3 (ITIL V3) standards will bring and how that affects your service levels. Also, take a close look at response times compared with resolution times.

Step No. 4: Get your feet wet

Once you've assessed your pain, determined your costs and developed a plan, it's time to make your move. Don't take on too large a task for your first time out but choose a task that can be measured.

Communication is important so assign an internal contact to work with the outsourcing provider. Make sure to select someone who can explain the company's core objectives at the outset. Be sure to update the service provider on a regular basis over time, overseeing the service provider's work as if the outsourcing partner is an employee.

When managed correctly, outsourcing defined IT functions to an IT provider can result in significant cost savings of as much as two-thirds of the cost of doing everything in-house. To realize these savings, however, you have to perform the up-front work of determining what to outsource, who will manage the outsourcing partner and how you will more strategically use your internal IT staff going forward.

Wayne Kiphart is the Vice President of Managed Services for Logicalis. He can be reached at

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