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Denise Villamil
AFSMI
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dvillamil@afsmi.com

Technology Services Industry Research Shows Profitability and Business Impact of Managed Services

New Study from AFSMI, SSPA and TPSA Reveals Managed Services' Profits Twice that of Professional Services

SAN DIEGO, December 15, 2008 – The Association for Services Management International (AFSMI), the Service and Support Professionals Association (SSPA) and the Technology Professional Services Association (TPSA) today announced the completion of a groundbreaking multi-member study on managed services done in cooperation with the. The associations' corporate members represent the industry’s most innovative and successful providers of technology services and support at the world's leading corporations.

The benchmarking data has particular relevance to technology product companies that have blended portfolios of products and services, because until now essentially all of the market information and performance benchmarking currently available has focused on pure-play managed services providers (MSPs).  The study is also the first joint effort involving all three of the technology industry's leading services organizations.

"Traditional MSP benchmarking is just as irrelevant to product companies trying to execute a managed services strategy as benchmarking of pure play consulting services is to embedded PS providers," said Bo Di Muccio, Ph.D., Senior Director, Research & Advisory Services, TPSA.  “These new benchmarks are clearly more relevant to complex technology product companies than any other source in the industry.”

Highlights of the study results include:

  • On average, the revenue contribution of managed services averages is about the same as professional services
  • Managed services business units are twice as profitable on average as professional services; and
  • Managed services have a demonstrably large, positive economic impact on several important overall performance metrics such as follow-on sales, product renewals, PS and product related account expansion, customer satisfaction, and product margins.

"With technology companies becoming steadily more services centric, having new, actionable benchmarks based on relevant data and insights will even become more critical for them," said Di Muccio.

The study is the industry’s first and only complete benchmark for embedded managed services, covering a comprehensive set of metrics and functions including business unit profile, business unit financial performance, contract metrics and performance, sales, marketing,  operations, engineering, CRM and customer satisfaction measurement, partner management, and economic impact of embedded managed services.

The full findings and data of the study are currently available only to study participants.  However, AFSMI, SSPA and TPSA members can benefit from the general insights of the study through direct interaction with the associations’ research experts.

About AFSMI
Founded in 1975, the Association for Services Management International (AFSMI) is the global leader in helping service professionals and field services organizations deliver more value for their customers. AFSMI members range from major Global 2000 companies to smaller, regional players and individual service professionals. AFSMI is internationally recognized for its 33 years of experience delivering service industry research, training and education programs, and industry events. AFSMI is a member of a global network of associations that also includes the Service & Support Professionals Association (SSPA), the Technology Professional Services Association (TPSA), and the Services Research & Innovation Initiative (SRII). For more information, or to join AFSMI, visit www.afsmi.com.

About the SSPA
As the industry’s foremost professionals association, the Service & Support Professionals Association (SSPA) is a key resource for the information and best practices needed to make better business decisions. It brings together the best minds from across the industry spectrum – from established companies with successful track records to the pioneering newcomers with out-of-the-box ideas. The SSPA also partners with thought leaders such as J.D. Power and Associates and the Wharton School to create programs that benefit the industry. The SSPA is a member of a global network of associations that includes the Technology Professional Services Association (TPSA) and the Association for Services Management International (AFSMI). For more information, visit www.thesspa.com.

About TPSA
The Technology Professional Services Association (TPSA) is the first and only organization for executives who create, produce, deliver, manage, measure, and optimize technology services in the world’s leading corporations. Member companies represent a diverse group of market segments including hardware and software products, systems integration, on-demand hosted applications, and value-added solutions. More information on TPSA can be found at www.tpsaonline.com.

 

 

 

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