Bruce von Maltitz, 1StreamBruce von Maltitz, 1Stream

A current trend in managed services is adherence to best practices and regulations

Best practices and regulatory compliance have been earmarked as significant trends in the managed services industry for this year.

According to a recent ITWeb article, Brian Anderson, an executive at SunGard Systems SA, believes managed services customers will see more efficient and higher quality services from providers that adhere to best practices, such as COPC, ITIL and Lean Six Sigma.

He also says the increase in regulatory requirements, as well as concern about operational risk, will lead firms to look more closely at the integrity of outsourcing service providers and to demand strong service level agreements, controls and global certifications and standards.

According to , product manager for office products at Konica Minolta, regulations and best practices are having a very positive influence on managed services. “As demand for stricter corporate governance measures increases, particularly within the local private sector, the need for managed services grows,” he says.

, head of enterprise products at Vox Telecom, believes the Protection of Personal Information Act (POPI) has definitely raised the bar. “It’s placed the onus on companies to protect their customers’ data – even if there is a third-party involved, it pushes the responsibility down to the data source. Even the Consumer Protection Act has had an impact on companies which play in the consumer space or have consumer segments. All in all, companies have to be a lot more careful than in the past, and go to extra lengths when it comes to protecting their customers’ data,” he explains.

There are many regulations and best practices impacting the provisioning of IT services, and the need to comply with these is helping drive the trend towards managed services, according to , MD of Jasco Enterprise. “For many organisations, compliance is an expensive exercise, particularly in financial services, where enterprises have to implement voice recording, store records for five years or more, and ensure compliance with FICA among other regulations. These often require specific technology to enable compliance, and managed service providers can offer the technology, in a compliant manner, in a more cost-effective way. This, along with other factors, is making managed services an increasingly popular option,” he says.

“Regulations and best practice are quite distinct from one another in my opinion,” explains Tian Horn, executive GM of direct sales operations at Ricoh SA.

“When companies look for a solution these days they definitely look for best practice solutions, but it all comes down to price – companies want the best solution they can afford, but at a point determined by their requirements they put a cap on cost associated with best practice. In cases where companies are outsourcing as a managed service, they typically want a solution to satisfy a business need, they’re not worried about the absolute best solution, which allows best practice to suffer as well,” he says.

“However, in the context of tighter regulatory controls, we see a huge impact on the managed services industry,” he explains. “This is particularly the case when you consider that companies may be handing over customer data to third-parties because legislation specifically drives at protecting customer information and companies are now legally responsible for doing that.”

He believes the level of regulatory control and legislation is going to increase from the current standard, so companies will be emphasising and increasing operational and storage requirements for their data. “As people become more creative in the ways that they use managed services, and even platforms-as-a-service (PaaS), information flows will rise. They will extend beyond geographical and political borders, which bring entirely new ramifications. Data protection, for example, becomes more complex and there are huge ramifications for data crossing borders. In this context then, best practice solutions do have an impact, but compliance far outweighs it,” he says.

, director of 1Stream, believes regulation and best practices should inspire managed service providers (MSPs) to up their game. “After all, many managed service contracts operate on a month-by-month basis, which means that it’s fairly easy to cancel and switch to a new provider if you aren’t delivering,” he states.


Despite the challenges increasingly strict adherence to best practices and regulations may pose for MSPs, the demand for their services continues to increase.

According to Briggs, although the term has become something of a buzzword, managed services is more than just a fad. “It is becoming the de facto manner in which customers expect their services to be delivered. The business case for managed services makes it a very attractive alternative to having to purchase upfront the technology that the customer needs to then manage themselves,” he explains.

“There are many reasons why companies seek managed services solutions, such as reduced opex and capex, focusing on core competencies and handing over back-office infrastructure to third-parties that specialise, and even to gain access to expertise they don’t have,” explains Horn.

He believes we are also past the buzzword stage in managed services, so there are tangible benefits to be had from these solutions and services and they really hinge on the fact that managed services rely on scales of economy.

Von Maltitz concurs: “The managed services model doesn’t require a considerable investment in physical assets or even skills. The associated risks are much lower – even if the provider that you chose is not up to scratch, you can switch to a new one fairly easily. And in most cases, making use of a cloud-based MSP is much cheaper and easier than the alternative.”

According to Griffith, growing corporate governance needs have positively impacted the market for managed services. “Organisations have to optimise efficiencies from the perspective of both the front- and back-office and are finding it difficult to allocate internal resources to do this. It makes more sense to outsource this to a managed services partner with the right skills and expertise in place to help improve delivery and cut costs,” he says.

Furthermore, he believes economic instability has led to a fundamental shift in the way that businesses are managed. “Expenses need to be more closely controlled, but not to the detriment of delivery to clients,” he states.

“Many large companies have found that they are practically forced to offer it as a basic component of their existing product offering,” according to Freer. “This is part and parcel of the commoditisation of the market and the weak economy, as well as deflation, because price has become an issue and most companies have to cut costs.”


According to Von Maltitz, there is very little that can’t be outsourced, but managing your staff should always be an in-house function. “It’s your most important asset and should be strictly handson,” he says.

“Managed services by definition has standalone procedures or processes designed into its DNA, because that’s where the benefit is extracted for service providers and users. Managed services focuses on shared, common functionality that is delivered at scale to make it financially beneficial and capable. That implies a high level of standardisation through the shared functionality, so companies do not want to outsource non-standard business processes, particularly where those give them a competitive edge,” explains Horn.

“Literally any aspect of a business can be managed by a third-party, except their concept of brand and philosophy,” says Freer. “Financial enterprises are obviously loathe to part with sensitive information, because of risks, but they are examining it too. We’re in the era where we are moving in towards a cloud-based model. Most companies are talking about it and at least shipping their non-core services, like e-mails, to the cloud. A good option is to use an MSP that offers a managed service as a value-add wrapped around various products,” he explains.