June 22, 2021
Defining Managed Service Requirement

Register to receive insights from CJC

Get notified of the latest news, insights, and upcoming industry events.

This three-part blog series explores the various challenges organizations face when utilizing a managed service and how to effectively overcome them. In our last post, we explored best practices in managed services and how to achieve a cost-effective, fully-integrated and reliable service. In this post, we’re exploring the importance of defining managed service requirements.

Is your managed service provider meeting your expectations? Is the ‘reliable’ managed service you thought you had signed up to causing you more problems than solutions?

Managed services can be a key tool for helping your business deliver in a competitive landscape but only if they are used in the right way and are fully aligned with your needs.

Aligning Managed Services With Your Needs

The key to ensuring maximum benefit from a managed service is defining your requirements as managed services are there to deliver for you.

It is important you take the time to document and understand the services that you wish to be managed and what your expectations are for the delivery of these. Without a thorough understanding of what you want to get out of the managed service, it is very difficult for you to measure success and ensure that you receive the service and value that you set out for. It is also very difficult for the managed service provider (MSP) to deliver against poorly defined requirements and they should not be willing to sign up to them.

At CJC, we follow a simple three-step due diligence framework that helps to identify and address potential conflict and risk in various areas of a market data managed service engagement.

Stakeholder Engagement

It is critical to engage with all stakeholders for any managed service engagement to understand their requirements and expectations in the short, medium and long term. For example, in financial institutions these would comprise of business stakeholders and lateral stakeholders, predominantly the finance team. Each of these stakeholders will have a different set of requirements and views on how they can benefit from a managed service. They can also be great at supporting the business case behind a managed service.

While this sounds very time-consuming, it is well worth the investment as most negative experiences with managed services stem from lack of communication with the right people and functions beforehand. Here are some examples of (the many) areas to discuss: 

  1. What are their service quality expectations?

  2. What support hours do they need, and are they willing to pay a premium for more?

  3. Do they have any pending projects or initiatives which would require capabilities outside of the proposed service? 

  4. Are there any challenges/issues that they currently face which could be solved by a managed service?

Multi-Level Validation: Technical, Service and Contractual Levels

Respective SME's at every function and level should review the relevant technical, service and contractual aspects of the engagement to ensure it is aligned with their requirements and expectations. It is this contract that will govern the managed service going forward and it is important to ensure your expectations and requirements are clearly represented. It is also advisable to add wording around any potential future extras if possible, so that should you require additional resources or services to help deliver a new piece of work, you have an agreed rate card and process around the extras. This increases the speed at which you can get the managed service to flex to your requirements to add further value as and when new requirements come along.

Risk Management

Any issues identified in one segment will likely cause impact in another, so all the validation exercises should be conducted under a single supervisory function to ensure risks are discussed and addressed with consideration from all angles. 

Assess Your Service Provider Supply Chain

It is a major red flag if the only people you deal with for a managed service engagement are salespeople. With so many critical interfaces between the service provider and business critical staff in your organization, it is crucial that you assess key functions such as the implementation, delivery and service management teams well before any commitments are made. These are the people who will fully understand your business requirements and will also be able to suggest better ways of working from the outset.

Some typical questions which need to be asked include: 

  1. Do they understand how your business operates with stakeholders, systems, internal applications and third-party products which you use?

  2. Do their systems, processes and documentation align with those in your organization?

  3. Do they have existing clients which have similar requirements to your business? 

Summary

By adopting this due diligence framework prior to committing pen to paper with your service providers, you will be able to identify and rectify many operational risks before they impact you. This saves significant time and effort in the long term and ensures a clear mutual operating model for you and your service provider to guarantee value for money.

In the next post, we will explore TCO and how to avoid ineffective cost management.

Interested in finding out more? Get in touch with our experts to learn how we can help you build a secure and reliable managed service framework to reach your business goals!

cjccm@cjcit.com

Learn more about CJC Commercial Management

Get In Touch

Get in touch with our experts to learn how we can help you optimize
your market data ecosystem!
Arrange a Meeting