With managed services getting redefined and becoming more customer centric, service level agreements (SLAs) today work better as unified rather than break-fix modes. While an ideal SLA must include the complete monitoring and management of the customer IT infrastructure, customized SLAs are also becoming the order of the day

From the days when managed services meant network and infra-structure management, to the time where it involves the management of the entire enterprise IT, the concept of managed services has undergone a sea change. Earlier, managed services were in the form of contracts, but post 2002, service providers have devised infrastructure management based on SLAs rather than contract deliverables. Evolving technology, especially high bandwidth available at low cost and easy access to the Internet has led to an improvement in the 'service' concept. Service providers are now able to give cost-effective, secure services and use industry standards like ITIL and six Sigma to address global requirements. In essence, managed services have evolved from just monitoring services to value-added proactive services.

With the concept of managed services changing, SLAs have also been redefined. Over the last year or so, IT infrastructure management services (IMS) have become more proactive. Proper monitoring and analytics of crucial system performance data has resulted in the proactiveness. Due to the availability of system performance data, better SLAs can be defined. Service vendors have begun to adapt to IT infrastructure library (ITIL) guidelines and processes which force better definition of the services through the use of proper scope of work (SOW) leading to well defined SLAs. With customers demanding 24/7 service and support, organizations are going into strict and watertight SLAs to ensure maximum uptime of IT infrastructure. Managed services are moving to total outsourcing, which is purely SLA-based. There is a movement from time-based SLAs to qualitative ones with emphasis on tools used.

Challenges
With the changing concepts, service providers are up against new challenges while trying to deliver on customer needs. According to Alton Veigas, MD, Vitage Technologies, Bangalore, the change in the approach to services has forced service providers to look at understanding customer businesses, impact of IT, skill sets, cost of delivery, pricing of services, data security and process role-out more carefully. There is a need to mitigate risks in these areas, invest in training (technical and soft skills), build domain knowledge, acquire certifications for processes and build better business models. Agreeing with him Manoj Rathi, Director, Diamond Infotech, Kolkata, who said, “We face challenges in terms of meeting customer requirements, but have an edge over MNC service providers since we have a good rapport with customers at a local level. The challenge is to constantly upgrade ourselves to the kind of services that MNCs provide.” According to Jaydeep Chakraborty, Director, Netwings Communication, Kolkata, “The huge business opportunity in the managed services sector has resulted in a 'gold rush' like situation where system integrators are taking the plunge to address growing customer needs. With the demand being more than the supply, enough trained manpower is not available. Trying to manage client infrastructure with half-cooked engineers/technicians results in disasters as far as deliverables and client satisfactions are concerned. With global managed services players setting shop in India, local players are facing competition from the more experienced international players who are walking away with the crème accounts.”

With many Indian business houses doing business with the US and countries with inverse time zones, services are required at odd hours. International clients often impose heavy penalties for loss of production hours. Some of these SLAs also come with heavy performance guarantees and downtime penalties.

The biggest challenge for service providers, according to Indranil Bhosale, EVP and Chief Services Officer, Apara Enterprise Solutions, Bangalore, is to become truly vendor/technology agnostic and build a comprehensive multi-vendor service (MVS) and provide SLA-based services. “Support and management of the infrastructure is an uphill task. The best way to address this challenge is to build product capability in-house of technology and for other areas partner with providers who have the competencies for your area.”

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