Transitioning Your Business: From T&M to a Managed Service Model

Changing from a time and material based business model to a managed service model can be difficult, but with the right strategy it is entirely possible. In this guide, you’ll learn how to plan for, and make the transition from a T&M to a managed service model in order to grow your business and maintain high levels of customer satisfaction.

Understand the Benefits of Managed Services.

Taking a managed services approach offers countless benefits over traditional T&M-based models, including better cost control, improved ongoing customer relationships, and access to predictive analytics. It’s important for business owners to understand the advantages of offering managed services to their customers before deciding to embark on the transition process. With a clear understanding of the benefits, it will be easier to develop an effective strategy for shifting your business model.

Analyze Your Customers’ Needs and Preferences.

Before you make the switch, assess your customers’ needs and preferences. This will allow you to determine whether managed services are a good fit for them. Consider their technical requirements, budget constraints, development speed requirements, SLA expectations, and more. Once you have an understanding of these factors, you can decide on the specific managed services that could best accommodate their needs. Knowing what products and services to offer can provide your business with the competitive edge it needs to stand out in today’s market.

Invest in Training and Education for Current & Prospective Employees.

Investing in training and education for your current and prospective employees is an absolute necessity for making a successful transition to the managed services model. Having personnel adequately skilled for customer support and problem-solving is essential for creating a merchantable product — otherwise, you risk failing to deliver or simply being out-performed by competitors. Providing employees with the resources and certifications necessary to appropriately maintain customer relationships means that your business will be well-positioned in this ever-changing industry.

Identify the Right Solutions to Meet Customer Needs.

The managed services model requires businesses to have an in-depth understanding of their customer’s needs and what solutions are best suited to meet them. This means having the right technology, training, and support structures in place to ensure that any customer requests can be quickly and efficiently handled by your team. Automation and integrated systems can help you manage multiple customer accounts quickly, meaning complex tasks such as billing, creating reports, and managing inventories can all be completed with minimal staff input. Identifying the right solutions for your customers will ensure that you are able to provide them with a seamless service experience.

Create Clear Pricing Strategies & Plans That Fit Your Customers’ Budgets.

When transitioning to a managed services model, it’s important to create clear pricing strategies and plans that fit your customers’ budgets. Consider implementing different tiers for different services and make sure you communicate these to your customers in an easy-to-understand way. You should also try to be transparent about any hidden costs or ancillary charges associated with specific services. Being upfront with your customers allows them to make informed decisions while encouraging loyalty by offering competitive prices. By setting up your pricing this way, you can help ensure that your customers are satisfied with the service you are providing and will more likely remain as long-term clients.

Step 1: Defined the Scope & Strategy :

I laid out a clear definition of the scope of work which involved building documents like Program Charter, Benefits Management, Scope Management Document, etc.. where the intentions were clearly laid out for the need to transition to an outsourcing provider taking into account how a service offering framework can be delivered using industry standard set of tools, processes, and support for seamless integration with various back-office systems. The associated risk management plan was defined that helped in shortlisting the right providers. A defined strategy & approach was defined on how to effectively restructure the organization involving people, process, structure and governance, this, in turn, helps in scanning the market to understand the potential vendor landscape

Step 2 : Service level agreement (SLA) :

SLAs were defined keeping in mind the business demands in Telecom as effective decisions must be led by hybrid data so as to deliver key insights with the robust functionality to improve visibility into core operations, internal processes, and market conditions. SLA’s where based on the Total cost of ownership (TCO) improvement in terms of Telcom services provided such as Analytics, the involvement of development metrics such as Planned vs actual, # of defects, productivity etc and maintenance  such as System availability, response time, resolution time, etc

Step 3: Source vendors :

I later followed a structured process for shortlisting vendor’s based on data research and criteria defined including vendor capability in Telecom domain/technology, service offering, resource skill capabilities, similar projects executed in the past etc., which resulted to a list of 3-4 shortlisted vendors which later we sought further information through an RFI and having one-one sessions. After this we prepared an RFP and circulated to the final list of vendors and later evaluated RFP based on criteria’s such as functional requirement, non-functional requirement, vendor capability, vendor commitment to SLA’s, price, etc. After this exercise, we selected the final vendor and negotiated the final terms and conditions of the contract.

Step 4: Transition :

We asked the final selected vendor to detail out a comprehensive transition plan which illustrates how each service offerings in our telecom domain would be transitioned to a managed service model in a phased manner. The key stakeholders and their role and ownership during the transition were defined.

Step 5: Delivery Governance :

A governance model was laid out to ensure effective stakeholder, communication, and change management so as to build a successful transition to a managed service model and also bring in automation using a solution-driven orchestration framework, businesses can scale up and scale down based on requirements and help business and IT work closely to understand and ensure their buy-in to the concept of the managed service model.