Lack Of Internal IT Support Drives Managed Services Growth

India SMEs’ IT investments show healthy growth, as businesses leverage technology to facilitate business operations. However, India SMEs are faced with a challenge in terms technology management, with less than a quarter of Indian SBs (companies with up to 99 employees) having full-time, internal, dedicated IT employees to manage their technology infrastructure. Although nine in ten MBs (companies with 100-999 employees) do have some internal IT staff, they are frequently caught up with troubleshooting and “dousing fires” on routine issues instead of using IT advantageously to foster greater business growth. In the face of tighter economic conditions and in a bid to getting lean, remotely managed information technology services (RMITS) show a high uptake amongst India SMEs. According to AMI-Partners’ 2011 India Managed Services Study, the opportunity for RMITS will increase by a healthy 23% (CAGR) through 2015.

In the past year, some of the pain points India SMEs experienced were reduced revenues, restricted cash flows and slow payment realisation. Coupled with this, the economic environment has become more competitive and cost efficiencies are now a priority area. By outsourcing their IT management, India SMEs are assured of guaranteed service levels with an OPEX model rather than a CAPEX model, thereby limiting total risk.

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“No doubt, RMITS offer best of breed service,” says Rati Ghose, Director Market Insights at AMI-Partners. “It includes 24X7 support at reduced costs and a whole bouquet of offerings which would otherwise be out of the reach of India SMEs. Manageability is also better as these SMEs now have one person to talk to instead of dealing with multiple vendors.”

For India SBs the main IT challenge lies in the initial buy in and putting processes in place. In the case of India MBs, who have an internal IT team, the challenge primarily lies in server management, and the everyday handling of ongoing user and hardware issues. “India MBs are turning to RMITS to assist them in keeping up with alerts and basic infrastructure maintenance, thus freeing their internal IT teams to manage more sophisticated solutions,” says Ghose.

India businesses in the 20-249 employee range are the ideal target market for RMITS services, notes Ghose. These businesses are caught in a situation where their usage of sophisticated IT solutions is increasing rapidly, leaving their internal teams unable to cope with the complexity of their infrastructure. They have a latent need for expert third-party support. “In their business context,” continues Ghose, “RMITS almost appear to be a panacea for their business challenges—lack of financial resources, lack of skilled IT staff, need for IT to promote business growth and serve as an engine of growth.”