Coleago: Managed services are cloud-bound

On the 16th and 17th of September, Informa’s 8th annual Managed Services World Congress (MSWC) took place. Chris Buist, a Director at Coleago Consulting, chaired both days of the event, and has shared his key takeaways from the congress for operators in developing countries.

In terms of managed services (MS) maturity, many operators from developing markets have now closed the gap with their developed market peers, which wasn’t the case five years ago. As a consequence, most of what we learned at the congress can be applied to any operator worldwide.

Business Objectives

One of the key items discussed was how MS must be driven by business objectives. From the number of presentations that echoed this point, it has quite clearly been accepted as an industry mantra. Having said that, our experience is that many outsourcing projects currently only pay it lip service and either don’t spend enough time analysing it, or don’t understand how to implement it. In general, operators don’t spend sufficient time up-front to get this right and build a solid foundation for the MS deal.


Flexibility was another key focus of the event, and we discussed how every MS relationship must be able to cope with a state of continual change in the business; without it, operators may struggle to make a success of MS. It’s therefore important that, in the first instance, when preparing the business case operators develop a range of forecasts and identify all the possible business scenarios that might occur during the next five to ten years. This enables the team to prepare a request for proposal and negotiate a contract that will cater for most eventualities. Once an MS programme has been implemented, however, it will be the quality of the operator-Managed Service Provider (MSP) relationship, the individuals involved and the governance structure that will make the difference when changes undoubtedly happen.

Shifting from KPIs to KQIs

At 2014’s MSWC, we also discussed how driving MS Key Performance Indicators (KPIs) from business Key Quality Indicators (KQIs) is still evolving, but with progress being made. Interestingly, two of the MSWC presentations that best addressed this topic were from operators in Egypt and Saudi Arabia. Whilst it isn’t easy and requires a lot of work to change the organisation, systems, etc. from being network KPI-focused to business KQI-focused, operators need to make this transformation anyway, regardless of MS. When implementing this, it needs to be mapped onto the MS strategy and contracts to ensure that everyone, including the MSPs, is pulling in the same direction.

Added value on top of cost saving

Early MS deals were “lift and shift.” MSPs took over processes from operators and ran them more efficiently. Today, the more experienced operators are now looking for added value as well as cost savings from their MSPs, and the latter are rising to the challenge. What the added value entails depends on the MSP understanding the business objectives (here we go again), and identifying how they will be able to help; for example improving customer experience, reducing time to market, providing new/enhanced services to increase revenue, etc.

Strategic partnership is a journey

For many years the MSWC has discussed the ambition of building trust between the operator and the MSP through all phases, but ideas on how best to achieve it are only now starting to coalesce. As most people know, transition to a new MSP involves a high-risk period, in which it is important that services are not disrupted and KPIs are maintained – the first step in confidence-building.

Subsequent transformation and delivery lasts many years, but, as trust builds up, the operator and MSP can shift their focus from lower levels of KPIs to higher-level KPIs/KQIs and the value-adding initiatives. The important point is having a tangible route-map for this journey and a contract that supports/enables it.

MS is moving to the cloud.

In developed markets, there are already many operators providing cloud-based services to their customers, particularly in the enterprise segment, whilst some of these cloud services are actually provided by third parties as a “white-label” service that an operator can brand as its own. Some developed-market operators are also now moving from licensing OSS or BSS solutions to buying them as a hosted managed service. It is not just limited to developed markets though, as some MSPs are now offering similar cloud-based services in developing markets. Depending on the country, the latter sometimes presents issues such as the quality and bandwidth of international connectivity, which might necessitate a regional or local solution.

Regardless of the market, the key messages from the MSWC were twofold: MS will move more and more into the cloud over the next decade, particularly with the advent of Network Functions Virtualisation (NFV), and local data privacy regulation is the main obstacle that needs to be addressed in order for this to happen.

Chris Buist is the Director of Coleago Consulting.


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