Manufacturers must first determine which internal IT, application and business management skills are truly "core" competencies and how much they can rely on third-parties without jeopardizing the quality of services delivered to internal users and business partners.
As the pressures of today's economic climate intensify, manufacturing companies are challenged to fundamentally redesign their operating models to survive and succeed. This is particularly true when it comes to their information technology (IT) and supply-chain operations.
A growing array of "managed service" alternatives have emerged that can significantly reduce costs and improve productivity. But, matching these alternatives to specific business requirements will be essential for your organization to successfully achieve its objectives.
The macro-economic challenges facing manufacturers are daunting. Natural disasters and geo-political forces have combined to drive up gas and other raw material costs, as well as distribution expenses. These forces are having a belt-tightening effect on IT and other aspects of corporate budgets. As a result, the major IT research firms, including Forrester and International Data Corp., have reduced their forecasts for corporate IT spending over the next two to three years. (See "IT Buyers Curb Their Enthusiasm ..." and "Forrester Research Forecasts Significant Drop in IT Spending In 2007" for additional insights.)
Given that two-thirds of IT staff time is generally spent performing mundane system and software maintenance or reacting to daily problems, most companies need to adopt more cost-effective methods to manage their IT and other primary business operations.
THINKstrategies believes these trends will force manufacturing companies to leverage managed services to meet their business objectives. THINKstrategies defines managed services as a packaged, "pay-as-you-go" solution provided by a vendor, or managed service provider (MSP), which assumes responsibility for specific IT or business function on an ongoing basis.
Managed services generally fall into three categories: IT management, application management and business management. The MSP monitors the availability of the technology, identifies problems, and either rectifies them or notifies the enterprise customer's in-house staff so they can resolve them.
In addition, managed application services eliminate the hassles and additional costs associated with deploying and maintaining various applications. These applications can range from messaging and calendaring to customer relationship management (CRM) and sales force automation (SFA). Managed email services generally include basic mail server access, plus a variety of security services such as anti-spam, firewall, spyware and virus protection. There are also a myriad of managed business application providers -- led by Salesforce.com -- with web-based, "hosted" services to satisfy CRM, SFA, human resource management (HRM) and other enterprise software requirements.
The advent of managed services to address each of these areas illustrates how all of these functional categories have become commoditized. As a result, various MSPs have been able to build "multi-tenant" delivery capabilities to satisfy the needs of a cross-section of corporate customers.
As manufacturers evaluate these managed service alternatives, they must make a series of strategic decisions.