One question all organisations should be asking themselves is what happens to traditional managed services models once we shift towards cloud computing?

In the past, managed service providers would tell you why, what and how they deliver service management so it will provide value to your organisation. The end result would likely be a fixed term service management model.

Technology has always been a fast-pace landscape which has made the delivery of long term value to customers out of service management agreements challenging. If you thought it was already fast, cloud computing has put the accelerator to the floor! All of which means the way service management models handle change has to go on a transformative journey as well.

What is service management?

ITIL defines Service Management as “a set of specialised organisational capabilities for providing value to customers in the form of services”.

There are two important questions any managed service provider must ask themselves:

  1. Are you capable?
  2. Are you providing value?

Key to answering these questions are people and the way that they provide value.

As we progress more towards a cloud computing model we find the following:

The managed service provider will intermediate between the cloud service provider and consumer, aligning the two and ensuring minimal service disruptions.

So how does this change the traditional methods of service management for an organisation?

Hello to the new approach

Let me introduce consumption-based service management (to be fair, it’s not a new concept but a model that will potentially redefine the way services are being delivered).

In this model the consumer pays for the value that you as the managed service provider will deliver on a consumption, rather than a fixed, basis.

I’m going to use a metaphor here:

As more and more organisations recognise the importance of the cloud, they have a ‘light bulb’ moment.  They come to realise that they only need pay for the said light bulb when it’s on. Also, typically the switch used to turn it on or off is included in this cost.

Was that metaphor enlightening?

The obvious follow on is to ask why should managing cloud environments not align with the way that the cloud is being consumed? Hence we arrive at a model based on consumption service management.

So what does this mean for the day to day operations of a managed services model?

The customer will cover the cost of the cloud provider and the supplier managing the service, ensuring the technology is being effectively managed, but to our metaphor above, why should they cover this when the lights are off? It’s here where we find value of consumption-based service management.

If the customer needs service management all the time, then you have to begin to wonder why? What are the changes one needs to put into place to remediate?

This change in model will surely flip everything upside down. How we measure service consumption in this case?

Is there a different way of measuring value? What impact that would have on the traditional measurements and costs associated?

Regardless of the above, the central goal to this consumption-based model will still be value, which will continue to drive conversations and delivered outcomes.

When you sit down to reflect or dream at what managed services for your organisation will look like in the cloud you should think about consumption-based service management and delivery thereof.

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