Page 572 - Handbook of Modern Telecommunications

Network Organization and Governance 4-103

3. The dependence of application availability and whether the MSP can guarantee the targeted
availability.
4. The grade of service and applications’ security may dictate the type of provider the enterprise
must use. In other words, enterprises must select providers that are not sharing resources among
multiple customers.
5. The level of security that is required for the business. In some cases, it may be inadvisable to allow
third parties to access the infrastructure components and eventually see the carried traffic.
6. Decide whether it is more cost efficient to concentrate on the core business or in addition to spend
on building a sophisticated network management system and organization.
7. If the enterprise had to invest a substantial amount into network management, outsourcing would
be a valid choice. If not, outsourcing might still be interesting, but it will be a lower-priority
item.
8. The current and future needs for skilled personnel; the most sophisticated networks and their
services would be useless if the enterprise cannot find human resources to operate it.
9. Potential acquisitions, mergers, and carve-out of business units, as well as changes in the applica-
tion portfolio will affect agreements with providers and therefore need special and careful treat-
ment in contracts.
10. Since outsourcing contracts are usually more than five years in length, the terms of the contract
are of paramount importance.
11. CIOs and CTOs should evaluate the corporate cultures of all parties in general and the manage-
ment philosophies in particular prior to the final outsourcing decision.
When outsourcing toward managed services and working with managed service providers, the fol-
lowing issues are high priority:

• Customer support: the MSP must dedicated high-quality support staff to the customers’ account.
A well-equipped network operations center is a prerequisite.
• Integration: with multiple best-of-breed services available, MSPs should answer the question,
how they can integrate with other services customers might have in place in the future.
• Reporting: MSPs should be made accountable. They should provide extensive reporting as part of
the managed service contract. Various reporting forms should be supported.
• Scalability: the MSP could be addressing an isolated IT task, but customers must be sure, the
niche service can scale to the expanding networking needs of the customers.

The current market climate is right for customers, who have grown more confident of the reliability
and security of managed services and for MSPs themselves. Specialty managed services such as security
and storage, and software-as-a-service licensing models are popular among IT buyers. Some service
providers offer their customers an on-demand management model with the result that they invoice
customers just for the duration of actual usage.

4.5.5 Contract Management

A single sourcing arrangement of moderate complexity and scope may result in a contract that’s several
hundred pages long. Depending on the preferences and organizational capabilities of the negotiating
parties, contract documents may be well structured and easy to follow, or they can be a convoluted mess.
In earlier days, the client manager most likely would have locked the contract away in a drawer, taking
it out only when a problem arose. Even if a manager desired greater day-to-day control and oversight of
the terms, obligations, and promises made in the contract, virtually no commercial tools were available
to help the manager in this effort.
Today’s contract management tools, which are still evolving, work with and are driven by the var-
ious terms and conditions specified in the contract. The simpler the contract is to understand, and