1 Managed Services Technology Stack By George Humphrey, Senior Director, Research, Managed Services, TSIA
2 TECHNOLOGY INSIGHT 1 MANAGED SERVICES TSIA-TI December 15, 2014 The Managed Services Technology Stack Automation Is Critical to Boosting Productivity and Achieving Service Levels by George Humphrey and John Ragsdale EXECUTIVE OVERVIEW Technology is incredibly important to managed services operations. Various platforms and applications are required to understand customer history, account entitlement and consumption, and to monitor remote customer equipment for errors or outages. TSIA has identified 24 separate application categories recommended for highly productive, scalable managed services, including core infrastructure technology, productivity tools, tools to understand and track customer behavior and satisfaction, and technology for managed services delivery. In this report, TSIA Research defines the recommended technology stack for managed services and lists the top-installed vendors in each technology category. Managed services executives should understand which enabling technology components are already well adopted, as well as emerging tools that may provide a boost to operational and financial metrics. EXTREME AUTOMATION FOR MANAGED SERVICES Managed services organizations have long been pressured to do more with less. With product revenues falling as technology shifts to a cloud economy, that pressure is stronger than ever. Maintaining customer equipment has always been a technology-heavy endeavor, but with rising complexity of hardware and software, and interest in mobility and video solutions, innovative technology is creating opportunities to further drive scalability as well as increase service revenue potential. We are seeing increasing pressure on managed services metrics. As a result, we re seeing a major investment in service automation tools and platforms by over 60% of the managed services community. What is more compelling is that more than 50% of these companies making investments are procuring off-the-shelf, ITIL-aligned service management solutions. These tools focus on event monitoring and correlation with automated fault isolation and resolution. Integration and orchestration are two key aspects of these service tools due to the vast amount of management applications and solutions required to allow the managed service provider to enable a proactive, predictive, and preventive approach to supporting clients. We see this surfacing in SLAs shifting from the typical
3 2 support model of response and restoral time to SLAs focusing on uptime and percent of incidents proactively resolved. To buck the industry trends in these critical metrics, TSIA members need to identify Pacesetter practices across all phases of people, processes, and technology. Our benchmarking program and other survey projects provide the data necessary to identify employee performance goals and establish best-in-class practices. This report focuses on the technology component. In order to take the next step in boosting productivity and reach, technology can be a great enabler. Not only can basic processes like staffing schedules and knowledge management be automated, but analytics can give you new insight into your business, including real-time performance dashboards and resource forecasting tools. This report will define the various technology components that TSIA recommends companies evaluate. Some are standard infrastructure products practically everyone has, others are newer, more innovative solutions that may help provide you with a competitive edge. TECHNOLOGY CATEGORIES RELEVANT TO MANAGED SERVICES TSIA tracks adoption, satisfaction, and planned spending for technology specific to service operations. The 2014 Global Technology Survey addressed core services technology, such as CRM, knowledge management, and collaboration tools. The 2014 Managed Services Technology Survey looked specifically at tools used in the delivery of managed services. Based on this research, the following technology categories were identified as relevant to managed services. Configuration Management Database (CMDB). The CMDB is a repository that acts as a data warehouse for IT organizations. Its contents are intended to hold a collection of IT assets that are commonly referred to as configuration items (CI), as well as descriptive relationships between such assets. This is really the heart of any managed services operation. A CMDB pulls data from all other service management tools to enable the operations team to have full, in-depth insight to a client s complete operations environment. Event Monitoring and Notification. These systems monitor remote systems to detect specific error conditions or alarms and use rules to take an action depending on the error situation detected, such as creating an incident or sending a notification . o Proactive Monitoring for Applications. These platforms monitor software deployments to track usage statistics, as well as detecting any error conditions and using a rule system to notify IT or support to take the appropriate action. o Proactive Monitoring for Infrastructure. These platforms monitor device-level performance, such as hardware outages, memory utilization, hard drive failures, port failures, etc. Devices include, but are not limited to, servers, switches, routers, access points, session border controllers, hard drives, power systems, etc.
4 3 o Proactive Monitoring for Networks. These platforms monitor statistics related to enterprise networks, capturing usage data, as well as helping to pinpoint outages or network slowdowns when users experience connectivity problems. Event Correlation. These tools analyze and identify incidents that have a high likelihood of being related. For example, an underperforming application may be caused by a device loosing Internet connectivity, which, in turn, could be caused by a port failure on an Ethernet switch. Three different alarms may be created from a single event. Automated correlation dramatically aids in faster restoral time or even prevention of application failure. Service Desk. Service desk is responsible for the governance of incident and problem management. This is where events not resolved through automation result in tickets to be worked by the operations and engineering staff. This is the primary tool to govern tickets and to track activity through resolution. Repetitive, chronic incidents are known as problems. Problem management typically requires root-cause analysis and is dependent on a number of the tools mentioned here to resolve. The service desk tool is also used to track the resolution of chronic problems. Orchestration. An orchestration application facilitates the integration of multiple tools required to operate an information technology environment. This may include connecting device management, application monitoring, infrastructure monitoring, and correlation tools, as an example. Release Management. Release management is the process of managing software releases from development stage to software release, as well as tracking the delivery/upgrade of software versions at customer sites. Capacity Management. Capacity management software ensures that IT capacity meets current and future business requirements in a cost-effective manner, triggering automated warnings if volumes are nearing maximum capacity for a hardware component, software program, network, or other technology. Billing and Collections. Typically part of a larger enterprise resource planning (ERP) platform, billing and collections software automates customer billing, providing customers with accurate timely billing statements and tracking days-sales-outstanding on all customer billables. Consumption Monitoring/Analytics. Consumption monitoring/analytics are tools used to measure and monitor customer consumption of technology, gauging how quickly customers are adopting new tools, common process flows, top-used features, number of users, length of session time, etc. Consumption monitoring is a key piece of shifting toward outcome-based services. Reporting/Analytic Platforms. Reporting/analytic platforms are analytic-based reporting platforms used to do sophisticated trend reports and create reporting portals such as a services dashboard.
5 4 Service Level Agreements. This software tracks the delivery of core services, such as response and resolution times, to make sure performance levels fall within guidelines set in contracts or agreements. Typically SLA software includes real-time dashboards and automatic notifications when issues are about to exceed committed service thresholds. Support Scheduling Optimization. Support scheduling optimization is a suite of tools used to schedule support technicians and call center agents according to volume peaks and required skill sets; also called workforce optimization. Contract/Entitlement Management. Contract/entitlement management is a suite of tools that tracks which customers have current warranties, service contracts, or maintenance agreements with your company. This includes the ability to easily check if a customer has a current contract in place, i.e., that they are entitled to service, as well as ensuring you are meeting response/resolution time commitments. Customer and Employee Communities. Online customer and employee communities designed to enable peer-to-peer support and share information internally and externally; includes discussion forums, expertise tracking, reputation models, moderation, etc. Field Service Scheduling/ Dispatch. Field service scheduling and dispatch technology is used to automate the scheduling of field service technicians and provide automated routing information. Mobility/Video. Mobility and video in service are tools for improving productivity and accuracy by leveraging mobile and video technology; includes tools to mobilize field service technicians, professional services consultants, and other service employees, giving them access to corporate content, collaboration, and workflow from anywhere, including video knowledge or training content. Parts Logistics/Depot Repair. Parts logistics and depot repair technology is used by field service operations to manage spare parts inventory and to automate the in-house repair process, from the creation of the return material authorization (RMA) to billing and shipment of the repaired product back to the customer. Recurring Revenue Management. Recurring revenue management tools are used by service professionals to manage the sales and renewals processes for maintenance and support contracts. Functionality includes automating renewals, renewal dashboards, and analytics that predict likelihood of renewal and manage profitable contract/maintenance programs. Voice of the Customer. Voice of the customer technology includes survey and reporting tools used to track transactional, periodic, and project customer satisfaction. In addition to customer survey tools, voice of the customer technology includes quality monitoring for agent performance, as well as voice and text analysis of assisted, unassisted, and social interactions. Voice/Telephony Platform. Voice/telephony platform is the infrastructure used to route inbound customer voice interactions via phone; typically includes skills-based routing, right channeling, voice menus (IVR), real-time volume management, etc.
6 5 Upsell/Cross-Sell. Upsell and cross-sell technology is a set of tools that prompt support techs and call center agents with personalized offers to present to customers during an assisted support session; tracks offer extensions and accepts. Upsell/cross-sell enables seamless selling during support interactions. These upsell and cross-sell technologies also assist renewal specialists and account managers with expand selling strategies with existing customers. Web Collaboration/Desktop Sharing. Web collaboration/desktop sharing is a collection of web-based tools used to enable collaboration between employees and customers; includes web chat, proactive chat, screen sharing, online meetings and training, and webcasts. Remote control/desktop sharing is also included in this category. Figure 1 shows each of these technology categories as part of the managed services technology stack, categorized by customer-facing tools, productivity tools, infrastructure tools, and tools for the delivery of managed services. For each technology, the top-installed solutions by TSIA members are listed.
8 7 While some technology categories, such as CRM and knowledge management, show very high levels of adoption by TSIA members, other categories remain untried by many companies and represent a great opportunity for boosting customer adoption and increasing service revenue. In particular: Consumption Monitoring. A core part of any customer success initiative, consumption monitoring tools help you understand exactly how customers use the technology, such as common process flows, top-used features, time to complete tasks, etc. This fairly new application category is currently used by only 13% of TSIA members, but TSIA expects adoption of consumption monitoring technology to rise as more companies focus on outcomebased services and create customer success practices. Recurring Revenue Management. Introducing analytics to the maintenance or subscription renewal cycle provides excellent benefits, including predictions on likelihood of renewal and dashboards tracking recurring revenue targets and performance. Many renewal activities can be automated and tracked by the platform, allowing employees to focus on higher value activities. Upsell/Cross-Sell. Extending an offer to a customer can be a graceful way to end a customer interaction, perhaps offering an upcoming conference or training class or explaining premium service options and how they impact the customer experience and resolve times. Upsell/cross-sell software prompts employees to extend contextual offers that have proven successful with customers having similar interactions in the past, tracking offer extensions and accept rates. TSIA RECOMMENDS With IT resources waning for most companies, technology buyers are increasingly looking to third parties for infrastructure support, and managed services is one of the fastest growing areas of service revenue today. Clearly, investment in managed services technology is a primary avenue to scale operations and meet and exceed customer expectations for service levels. But knowing where to start is difficult, with many different products offering a similar ROI story. When deciding where to make incremental investments, TSIA Research recommends: Take a fresh look at your technology environment. If you are missing multiple technology categories recommended by TSIA, maybe it is time to revisit how that technology can assist you in meeting your quality, optimization, and revenue-generation goals. Also, be sure to evaluate what best-of-breed technology offers today compared to homegrown systems. Include integrations in Phase 1 of the project. Integrating technologies, such as knowledge management, incident management, and remote monitoring tools, can boost adoption and improve performance. When implementing new technology, identify key integration points and push to include these integrations in the initial phase of the project. Too often, critical integrations are pushed to Phase 2, which never happens.
9 8 When in doubt, ask. TSIA Research is here to help. Members can submit an inquiry on any topic, and we will do our best to answer within 48 hours. To submit an inquiry, send an to your membership development director, or send an to and one of our service representatives will respond to your inquiry as quickly as possible.
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