Why do organizations use SAM Managed Service Providers?
This article is the second of a four part series by Martin Thompson of ITAM Review and Hugh Skingley of Livingstone. The series explores Building the Business Case for SAM Managed Services.
- Part One – explores cost considerations for technology implementation in the article “15 hidden costs in SAM tool implementation”
- Part Two – (this article) Why people use Managed Service providers
- Part Three – Building ITAM teams
- Part Four – On-boarding and de-risking implementation
In the previous article we listed the potential hidden costs of SAM tool implementation.
In this article, as we explore building the business case for SAM Managed Services, we will assess why organizations use SAM Managed Service Providers in the first place – when do they choose to utilize a third party, what are the limitations of using an outsourcer and how should an outsourcer be considered within your overall ITAM strategy?
Business Drivers for SAM Managed Service Providers
According to ITAM Review research into SAM Managed Service Providers over the last five years, the primary reason organizations chose to engage a third party was due to expertise, cost saving or faster ROI:
Results from The ITAM Review 2017 Salary Survey demonstrate a clear global shortage of ITAM expertise, especially SAM and licensing specialists. Organizations are outsourcing some or their entire ITAM department to address shortfalls in this expertise.
By relying on third party expertise for some of the day to day data crunching elements of SAM, the team is freed up to pursue more strategic initiatives.
The management of some high value software publishers sometimes requires highly specialist resource, by outsourcing; there is less dependency on any particular hire to disrupt ITAM goals so working with an outsourcer should provide a degree of continuity. For example, the risk associated with management of your Oracle estate and negotiation of your next Oracle ULA increases considerably if your in-house Oracle hire gets poached to work for another firm.
Organizations can also sometimes benefit from the use of expertise on a short-term tactical basis rather than investing in full time resource, using Oracle again as an example – hiring a specialist twice a year or once a quarter to review the estate rather than the overhead of a full-time member of staff.
- Cost Savings
As SAM Managed Service providers mature and build out their practices: services are becoming more industrialized and competitively priced.
Also, because the service provider will want to continually deliver the service they will be keen to justify their existence by continually delivering value – primarily through cost savings and infrastructure optimization.
It’s important for any ITAM team assessing the effectiveness of it’s practice to weigh up the further growth of it’s team and the use of partners, this requires an honest evaluation of the true cost of SAM implementation, some of which were covered in our previous article.
- Faster ROI
Finally, the third key reason for an organization outsourcing SAM is faster ROI or quicker time to value. Because organizations are effectively buying an outcome, they are de-risking implementation, assuming the service provider is proven with a strong track record.
Working with a SAM Managed Service provider should provide a lower risk route to execution since the outsourcer will have hands-on experience of completing similar executions and will be contractually obliged to deliver value. Many organizations harness the skills of a service provider at the outset and may slowly replace with in-house expertise as their practice matures (if they are able to hire the right kind of expertise). We’ve also spoken to many ITAM Review readers who maintain the services of Managed Services on a continual basis because it frees them up to focus on more strategic or higher value initiatives.
SAM MSPs have knowledge of SAM tools and how to get the most out of them – they may even bring their own SAM tool, service or hosted service to the table so you don’t need to spend time selecting and implementing one.
Weaknesses of working with a SAM Managed Service provider
There are limitations of working with SAM Managed Service providers, the most common cited by ITAM Review readers are as follows:
- The intelligence gained in execution is not always integrated or leveraged in-house. You are building the competence of the outsourcer rather than your internal team.
- Timeliness of response might not be as fast or company focused as in-house teams. For example in the instance of a security team needing up to date asset data in the event of a major cyber-security breach, an in-house team is more likely to go the extra mile to help compared to a traditional outsourcer who might argue it is outside scope to help. The outsourcer’s primary motivation is maintaining the contract rather than your business goals, a smart contract can align these two motivations. As with all outsourcing this is obviously dependent on the relationship.
- Finally, working with a MSP might be a higher cost option in the longer run compared to doing things in-house. However, this will depend on the size of your organization, the vendors involved and your overall objectives.
ITAM Best Practice and choosing a SAM MSP
Should you run things internally or not?
In the context of overall ITAM strategy, we recommend that senior management authority is secured, and then a business plan is written. The ITAM leadership then builds a team to execute against that business plan. At this stage you should have a shopping list of expertise required to hit your business plan. You can then make a judgment on whether to source internally or not. As with all other aspects of IT, it is common for a hybrid approach to SAM, of internal and external teams who focus on different elements depending on their skillsets.
To learn more, we cover AUTHORITY, PLAN, and TEAM in more depth in the Practical IT Asset Manager book, course and PITAM certification.
Livingstone has built a SAM calculator for simulating Managed Service Provider costs over a three-year period. Download a copy here (Registration Required).
- Tags: Business Case · Livingstone · Managed Service Provider · Managed Services · ROI
About Martin Thompson
Martin is also the founder of ITAM Forum, a not-for-profit trade body for the ITAM industry created to raise the profile of the profession and bring an organisational certification to market. On a voluntary basis Martin is a contributor to ISO WG21 which develops the ITAM International Standard ISO/IEC 19770.
He is also the author of the book "Practical ITAM - The essential guide for IT Asset Managers", a book that describes how to get started and make a difference in the field of IT Asset Management. In addition, Martin developed the PITAM training course and certification.
Prior to founding the ITAM Review in 2008 Martin worked for Centennial Software (Ivanti), Silicon Graphics, CA Technologies and Computer 2000 (Tech Data).
When not working, Martin likes to Ski, Hike, Motorbike and spend time with his young family.
Connect with Martin on LinkedIn.