Managed services buying criteria evolves.
The rapid deployments of new technologies to enable remote working in the wake of the COVID-19 pandemic is creating new challenges for enterprises across the Association of Southeast Asian Nations (ASEAN) and changing their buying criteria in managed services.
In analyst firm GlobalData’s recently released report, ‘Major 2021 Shifts in Managed Services Trends as Businesses Pivot to Work from Anywhere’, showed that skillset shortage followed by the ease of migration and organizational-driven initiatives are now the top three drivers for ASEAN enterprises to consider managed ICT services.
Managed service deployment model has been gaining traction in the last few years especially among large and medium-sized enterprises. The increase in technology complexity as well as the growing needs for outcome-based solutions has been driving enterprises to outsource parts of their IT and focus on the results and innovations, said Alfie Amir principal analyst at GlobalData.
“The COVID-19 pandemic not only has accelerated managed service adoption in ASEAN, including the SMB segment, but also changed enterprises’ buying behavior while considering new ICT solutions. Scalability, cost-savings and product lifecycle are no longer the top drivers for managed services,” he said.
Low ICT adoption of ASEAN enterprises pre-COVID-19 and rapid deployments of new technologies since early last year has widened enterprises’ skillset gap and increased complexity to manage services across different ICT domains. The lack of internal skillsets and the urgency to get new systems up and running have pushed enterprises to consider managed solutions from service providers.
Besides the skill shortage, system migration which used to be a major challenge for enterprises while moving from in-house to managed service has become one of the key drivers. This is driven by strengthened providers’ capabilities proven by track records, as well as an open ecosystem that drives interoperability across vendors.
Furthermore, as more ICT projects are moving from standalone technical implementations to outcome-led deployments, there is a growing need for professional service capabilities such as consultancy, advisory and management to help enterprises achieve the desired business objectives.
Besides the new managed services drivers, there were also shifts in service provider criteria. Some must-have criteria like local presence and vertical capabilities are no longer the top priority while new areas such as wide ICT portfolio, brand reputation and pricing flexibility have become more critical than the others.
“While the wider adoption of managed services indicates a positive step in driving ASEAN digital transformation, it is important for service providers to re-align their value propositions and enhance capabilities to address the new market requirements. Despite all the changes in the past 18 months from enterprises, most ASEAN providers still focus on the transactional and product-led selling,” noted Amir.
Tags: Global DataICT
