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NTT: 'Smart Sourcing' Presents Managed Service Provider Challenges

Technical expertise is the No. 1 driver for selection of a service provider.

Edward Gately

May 7, 2020

3 Min Read
Business Problem Solving

With enterprises in recovery and restoration mode, a managed service provider that delivers positive business outcomes will come out ahead.

That’s according to NTT’s 2020 Global Managed Services Report. NTT polled 1,250 business and IT leaders globally.

During the next year and a half, organizations will look to further use service providers’ expertise and form deeper relationships. Therefore, the speedy delivery of platform-enabled services across the entire technology stack becomes even more important.

From cloud to networking, data center to security and more, depth of capability is essential to recover and restore operations. It’s also crucial to position organizations strongly for the coming years, NTT said.

According to the report’s findings:

  • Reducing security risks is not only the biggest challenge faced by IT teams globally, but the top reason for service provider consideration.

  • Nearly half (48%) of business leaders already acknowledge a need to optimize the workplace environment.

  • Technical expertise is the No. 1 driver for selection of a service provider, with cloud infrastructure and security leading the demands.

Damian Skendrovic is NTT’s executive vice president of managed services, go-to-market. He said “smart sourcing” is a shift in how MSPs must perform “over, above and beyond” delivering tactical IT solutions.


NTT’s Damian Skendrovic

“Business and IT leaders are now looking for service providers who invest in both building long-lasting relationships, and have the ability to deliver new business needs and outcomes aligned to the goals of the organization,” he said. “It is these challenges that the service provider has to overcome and understand, finding ways to establish connections into the client organization that allows them to react to the evolving client outcome.”

Don’t Sell on Price

Full-time labor and least-cost providers now are at a disadvantage, Skendrovic said.

“The need to clearly articulate, ‘what can you do for me tomorrow, and how will you help me transform’ is as important as ‘what can you do for me today,’ [while] aligning cost with value and capability in an agile manner that is secure by design,” he said.

Moreover, service providers now need to be specialists across critical areas, Skendrovic said. So they should help client IT teams communicate and integrate with their own business functions to get the best outcomes.

Delivering cost-effective value to clients is just half of the solution, he said. The second half is demonstrating “presence, personal attention and trust” in the client relationship. That will drive change and integration, he said.

“The smart-sourcing service model points to greater demand in how service providers can play a larger, more intelligent role in the development of the enterprise landscape,” Skendrovic said. “Large global providers with centralized, standardized and automated systems and processes are now fundamental to continued business operations.”

Post COVID-19, businesses need to know their managed service provider continues to support them to focus more on business continuity, processes and tools to keep their employees safe and productive, he said.

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About the Author(s)

Edward Gately

Senior News Editor, Channel Futures

As news editor, Edward Gately covers cybersecurity, new channel programs and program changes, M&A and other IT channel trends. Prior to Informa, he spent 26 years as a newspaper journalist in Texas, Louisiana and Arizona.

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