4 Steps to Successful Application Managed Services

If you're thinking about ceding control of some applications to others, this four-step recipe can help you create and enjoy a successful and safe relationship.

By Ramkumar Iyer, Senior Solution Architect, iGATE Patni

If you're an IT department looking to control costs while effectively deliver key business services, you're aware of managed services. From an applications perspective, the benefits are known -- you focus on your core business while a managed services provider (MSP) handles the rest.

For many enterprises, off-premise application management is an uneasy proposition. Recent third-party outages at Amazon EC2 and concerns with service-level agreements (SLAs) make off-site application management a tough sea to navigate.

If you're thinking about ceding control of some applications to others, there's a recipe you can use to create a successful and safe relationship. The recipe has four primary ingredients -- the first and fourth ingredients address the model's sustainability; the middle two serve as the differentiators for the various models available.

Step #1: Align with core business principles

An effective managed services model is designed to share the vision of a business's objectives and goals. However, goals and objectives are constantly changing and evolving. In this dynamic environment, it's important to share with providers a road map of where your business is headed. This offers the provider a template for how to best work with you; fostering a culture of trust and collaboration. MSPs typically offer a range of options to meet customer needs. Alignment ensures the relationship is as streamlined and effective as possible.

Step #2: Ensure end-to-end service delivery

Following the planning that goes with a managed service model, the fundamental expectation is the delivery of uninterrupted, high-quality, end-to-end services. These services should meet industry standards while addressing the basic need for adopting the model.

To provide end-to-end services, vendors "risk-proof" their offerings against actual and perceived risks, both strategic and operational. The identified risk within the model influences how it's designed. Following the risk assessment, the model must:

  • Use standardized application development and maintenance methodologies across delivery operations backed by execution experience with digitized and integrated workflow for support, maintenance, and software development life cycle activities

  • Create an outcome-based model, addressing variability in demand or volume and recommend output or outcome-based models governed by service level management framework

  • Provide uninterrupted delivery using state-of-the-art infrastructure and connectivity for seamless services, as well as incorporate business continuity/disaster recovery best practices and manage enterprise risk

Step #3: Manage the relationship with central intelligence

After you've created the model, you must put it to work. Does the evaluation stop? Absolutely not. Instead, the model can always be revised or streamlined to get the maximum value out of your investment. In particular:

  • Focus on knowledge capture and harvesting: capture and organize knowledge from the relationship, including mechanisms to continually improve services.

  • Share the planning and governance with centralized management. Many relationships have an internal team of central MSP and organizational representatives to consistently evaluate the agreement's progression. This can ensure the model is strategically aligned and that changes are felt by all parties.

  • Leverage access to specialized knowledge and resources. As the process evolves, it's equally important to leverage industry best practices such as "centers of excellence" and enhancement programs through in-house and industry collaboration.

  • Focus on continuous improvement. Value innovation and quality initiatives such as Six Sigma, Lean, Kaizen, or TRIZ to realize maximum benefits.

  • Ensure minimal but critical touch points. Design only critical touch points based on your need to maintain control.

Step #4: Fold the model into business and culture

Even if the relationship is tied to goals, monitored successfully, and delivered effectively, the success of the model is ultimately determined by the customer organization as a whole. This means the key stakeholders within your business, operations, other vendors, and the rest of the IT community.

However, we've seen examples of entities that see the model as a threat to their own survival. To meet this cultural challenge, IT needs to take a preemptive approach that balances the objective gains of the model with organizational change management strategies.

Many organizations have representatives who help immerse the model into everyday business. These can commonly be called service management offices (SMOs) that contain well-defined charters and focus areas to drive service strategies and implementation. Oftentimes, SMOs can serve as a contact and ally to the vendors and the client. This improves its chances of acceptance and higher success.


If your organization has a mature outsourcing relationship, the application managed services paradigm is a state of natural progression that allows organizations to focus on core objectives. In this context, the service delivery and management framework define the maturity of the relationship and not necessarily its duration. The ensuing IT service delivery model helps the customer achieve true outsourcing potential and focus only on core business objectives.

However, there is no guaranteed success formula. Instead, there are certain key aspects which warrant investments in terms of people, processes and tools. By considering these ingredients and maintaining visibility and feedback, organizations can achieve the maximum amount of value from a managed services relationship.

Ramkumar Iyer is a senior solution architect for iGATE Patni, where he works on software application maintenance, enhancement, development, production-support, assessment activities, and project offshorization initiatives. You can contact the author at

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