A featured contribution from Leadership Perspectives: a curated forum reserved for leaders nominated by our subscribers and vetted by the Construction Tech Review Advisory Board.
Alcatel-Lucent Enterprise
The Evolution of Managed Services and Technology Business Models
Steve Saunders
In the not so distant past, organizations of all shapes and sizes procured, owned and managed business technology internally as part of normal operations. Even the most elementary technology provided a distinct competitive advantage enabling companies to increase revenue, acquire or retain customers, improve productivity and reduce cost. For CEOs and CFOs, technology was indeed a worthy investment.
However, as technology became more complex and costly to deploy and manage, organizations recognized the financial and operational benefits of outsourcing technology to one or several specialist service providers. Technology though, in many cases remained a balance sheet burden until business owners began to recognize the benefits of outsourcing not only the operation but also the ownership of technology to the same specialists or service providers. This reduced the investment risk and allowed funding of technology through operational rather than capital budgets, ultimately preserving working capital for core business investment.
With emergence of the cloud, organizations could consume and pay for technology as a service and like all other utility services, only pay for technology as and when it was required.
Managed Services And Technology Business Models Are Truly Evolving Almost As Fast As Technology Itself
CEOs and CFOs could now, directly align technology cost to business activity while also divesting the technology budget across business groups.
We are now entering the next phase of managed services and technology business models where organizations are and will be provided with various technologies to use at very low cost or even perceived no-cost, in return for access to the traffic and data/information created. We are seeing new and creative ways to monetize technology where it becomes a conduit itself; a utility service and delivery mechanism – with the value being driven from business outcomes, the data it generates and access it allows to end-users.
Communications technologies such as Wi-Fi, mobile applications and telephony, offer users a seamless experience while also providing innovative mediums to capture user data and deliver highly contextual marketing. For instance, within the education sector, these technologies can and will be used to improve learning outcomes, student engagement and safety as well as potentially generating an associated revenue stream by enabling personalized marketing to students and staff alike.
This drives a business model and a revenue stream that will be shared among vendors, service providers and customers. Monetizing technology in a new way – similar to how Google, Facebook and others discovered in a social technology context – is now showing the way for potential opportunities in an enterprise context.
Managed services and technology business models are truly evolving almost as fast as technology itself.
Without doubt, there are and will be very innovative ways to monetize technology and to demonstrate once again how technology can provide a competitive advantage.
CEOs and CFOs need to challenge themselves and their vendor/service partners to find the technology business model that gives them an edge at the same time funding the technology investment they require.
