Keep Flexible to Keep Customers

M. Halama

M. Halama

Summary Bullets:

  • Automation jeopardizes flexibility when needed by clients deploying new technology
  • Smaller services deals expose buyer shortcomings that need early due diligence and lifelong flexibility by providers.

The cloud brings exciting innovations that increase the potential of, and customer choices for, unified communications and workspace services. With that fresh potential comes the possibility of clients making more errors in buying decisions and specifications. Service providers and third parties are also likely to make genuine mistakes when advising clients on strategies that exploit new technologies.

  • Mistakes in strategy and deployment are inevitable as no one has much experience with new technologies.

The pressure on IT user businesses to be more agile prompts still more chances for clients to rush decisions that can lead to commercial errors and poor IT strategy. Clients do not have time to repent at leisure for any mistakes – they need remedies quickly, and service providers with the agility to implement these remedies.

  • Cloud technology and business models can enhance service providers’ ability to adapt to clients’ changing needs.

Many providers are taking to the cloud in a big way – from BT, T-Systems and Colt, to HP, IBM and Fujitsu. They are automating processes and standardizing products to build portfolios and standard contract terms that enable customers to select and deploy pure and hybrid cloud solutions, and enable those providers to control costs and processes in new ways.

  • Standardization and automation are logically followed by service providers centralizing their processes – this consolidation can safeguard against branch staff diverging from good practice.

Providers with an existing good name for being easy and flexible for customers to do business with throughout contracts need to guard this valuable quality even while they restructure their processes.  Service providers with less attractive reputations have opportunities, while they develop new cloud services, to reform their culture and processes to be more flexible and appealing to clients in the new era of agility, cloud and smaller deal sizes.

  • What are the flexibility features you most appreciate from service providers: wide range of standard contract terms; comprehensive, standard portfolio; local flexibility in services or contract terms; easy customization; easy renegotiation of contracts; or flexibility of another kind?

Small clients are accustomed to self-service solutions and can often dive straight in, but with larger clients and larger deals, negotiations usually arise (before provisioning) to determine the terms of access to services. The trend to shrink or split managed services and outsourcing projects will limit buyers’ ability to scrutinize many minor deals the way they often examine fewer mega-contracts.

Larger clients may want and need the same attention from providers as ever but in smaller deals than before. Framework agreements can help but, over time and with industry custom and practice, buyers’ culture and expectations (and eventually laws) will evolve.

  • Even large, sophisticated buyers will expect: (a) greater scope for significant contract changes without penalty; (b) service providers to assume greater responsibility for due diligence of customers’ needs.

Winning providers will develop the flexibility to deliver against these needs and expectations before clients cultures change.

About Michal Halama
As a Principal Analyst for the Current Analysis Business Network and IT Services team in Europe, Michal's coverage areas include leading and emerging providers of managed services. He has a special focus on managed unified communications, data center services and the cloud.

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