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As IT organizations begin to play a much more strategic role in the digital business era a new survey suggests they are relying more on managed service providers (MSP) to handle fundamental operational tasks.

A new survey of 404 IT professionals conducted by Market Insights Group on behalf of Insight Enterprises, a global IT services provider, more than three-fourths of companies dedicated a portion of their IT budget to managed services in 2017. The top reasons cited for investing in those services are for additional expertise (45 percent), free up internal resources to focus on innovation (37 percent), better support for employees (36 percent), and greater flexibility and modernization of devices (35 percent).

The most interesting perspective for MSPs, is that among organizations allocating 20 percent or less of their IT budget to managed services in 2017, over half (52 percent) say they are likely to increase their investment over the next 12 to 24 months.

The survey makes it clear that IT leaders are caught in a digital transformation bind. The survey finds 87 percent of IT decision-makers agree that their IT organization is struggling to adapt to an expanding role that spans both driving innovation initiatives and keeping core systems running. Issues IT leaders are grappling with include:

  • Competing demands and not enough resources to effectively support the organization (51 percent)
  • Request of IT to support innovation, despite existing processes, practices and business operations are not evolving to allow them to accomplish this (35 percent)
  • Shadow projects handed off to IT that divert already scheduled resources to fix systems built outside of architecture and processes (26 percent)
  • Out-of-process or hastily executed decisions on cloud strategy, architecture, and platform selection (24 percent)
  • Lacking clearly defined roles and responsibilities within the organization (24 percent)

The survey also notes that cloud computing remains at the core of most IT strategies. A full 82 percent of respondents say their organization invested in cloud services to create a more flexible and collaborative IT environment (64 percent) and provide better remote access (61 percent).

Lack of resources could create more MSP opportunities

Not surprisingly, 52 percent of respondent say monitoring budgets and costs is a top technology concern. The bigger issue inside many of these organizations is simply determining where the funding for various IT initiatives will come from.

Many projects are initially started by line of business (LOB) executives. But it’s not uncommon for responsibility for those projects once they reach a level of scale to be increasingly shifted over to the internal IT department. The trouble is too many business leaders assume that IT department has infinite budget to take on these new projects. Faced with that issue it’s apparent that many IT organizations are more willing to outsource operational tasks such as backup and recovery to MSPs to free up time and resources required to focus on digital business transformation initiatives.

Savvy MSPs, of course, are working both sides of the digital business transformation opportunity. On the one hand, IT departments are looking for help to handle operational tasks. On the other hand, many LOB executives are looking past the internal IT department to jump start an IT project with the help of an MSP. The challenge facing MSPs today is finding a way to navigate those opportunities without unnecessarily antagonizing anyone inside or out of the internal IT organization.

Photo:  Olivier Le Moal / Shutterstock.

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Mike Vizard

Posted by Mike Vizard

Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications including InfoWorld, eWeek, CRN, Baseline, ComputerWorld, TMCNet, and Digital Review. He currently blogs for IT Business Edge and contributes to CIOinsight, The Channel Insider, Programmableweb and Slashdot. Mike blogs about emerging cloud technology for Smarter MSP.

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