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Monday, September 6, 2010

Managed Services :- Opportunity in Power Grid Corporation Of India

According to a recent research by Forrester, total addressable managed services opportunity in India will be worth $8.27 billion by 2013, growing at a CAGR of 19%. IDC, in its India Managed Services 2008-2012 Forecast and Analysis, has reported that the Indian domestic managed IT services market is expected to grow at a compound annual growth rate (CAGR) of 24.9%, to reach a US$2.78 billion industry in 2010. The Indian Managed Services market is poised to become one of the fastest-growing markets in the Asia-Pacific region. VARIndia spoke to SK Chaturvedi, Chairman and MD Power Grid Corporation of India (PGCIL) about the company's managed services business and future plans.

How seriously POWERGRID is thinking to implement the MS (Managed Services) module?

POWERGRID has been actively considering engagement of MSP's (Managed Service Provider's) services in furthering the extent and efficacy of Telecom business. Although the thought process of ushering the era of Managed Services in POWERGRID's telecom business is at the early stage, the resolve of migration to the same is positive.

What are the verticals you are considering for taking support of MSP partners?

We are considering all feasible verticals for Managed Services. The scope of Managed Services is still under initial study and consideration phase and is in the process of being finalized. The same would be fine-tuned through a process of due diligence.

What are the emerging trends you are looking forward to in the Managed Services space?

The emerging trends are various forms of outsourcing starting from a limited basket of services like limited O&M to full service operation including customer-provisioning and expansion, wherein the owner is supposed to only market the product, maintain availability and other Quality of Service (QoS) related commitments with the help of Managed Service Provider (MSP). Existing service providers in the market generally go for one of the above options in some form or other.

How you are thinking Managed Services are beneficial for your organization growth specific?

By introducing MSP in line with the prevailing industry practice, it is expected that holistic development in business will be possible by way of better services to customers, time-sensitivity and extended footprint with a number of new value-added services. We expect to sharpen our competitive edge by introduction of state-of-the-art O&M practices, expeditious execution of new projects, expansion of existing transport and access networks in line with the market demand.

What are the parameters for engaging with POWERGRID as the Managed Services partner?

Some of the parameters, that we would possibly look for, could be MSP's experience in the fields of Telecom and/or Information and Communication Technologies (ICT), its present relationship with the major international OEMs, particularly the ones whose telecom systems have been in operation in India, its understanding of the working ethics of a Navaratna PSU, etc. However, the detailed requirements are under study and still to be finalized.

Can you give an overview of your PGCIL's managed services requirement?

The requirements could include managing complete O&M of the existing pan-India telecom network, including NOCs, city-based PoPs, Repeater/Regenerator sites, underground optical cables in various parts of the country to meet the stringent Service Level Agreements (SLAs), augmentation/expansion of the transport/access network in complete synchronism with customer needs.

What are the challenges for a PSU to go into MSP or third-party outsourcing?

Since the idea is new, staff and management may need some deeper understanding of the constraints we are working under the present circumstances, the systemic limitations to usher in the required growth at a quick pace with the required transparency and efficiency in a fiercely competitive world.

Also, presently our O&M practices involve dealing with multiple vendors and the integration with existing processes would be a major challenge for a Managed Service Provider.

Are enterprises comfortable trusting an external operator that does business with their competitors?

In view of today's globalization and consolidation in the telecom business and in order to excel in the present competitive environment, trusting a partner (who would be selected through a rigorous and transparent process) seems to be justifiable. A single party when operating with multiple players, it definitely leads to sharing of resources and thus cost savings - and hence margin improvement. Since other players in the field have just been following similar norms and flourishing, we don't think that taking MSP partners would have any undesirable effects.

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How big is the MSP market in India and it's trend?

AnshulGupta_GOIP.gifThe MSP market in India has been growing year after year with the trend to outsource part or complete services as a whole. As of today more than 30% of the Indian businesses outsource their IT infrastructure managed services in one way or the other, and we all will witness a tremendous growth in the next four to 5 years. Even as per the recent research by Forrester - "the managed services opportunity in India is close to $8.7 billion by 2013, with a total CAGR of 19%". As we see the market is maturing slowly and the service offerings and quality demand is at a rise.

Who are the Corporates (verticals) or PSUs likely to focus on the MSP module?

Each and every vertical or PSUs can benefit or will focus on the MSP services being provided sooner or later. Managed Services is becoming a way of operating today to derive all overheads and operational cost to a fixed number with SLA in place for quality of service. Though one of the major verticals that we feel will remain the largest contributors to the managed IT services market will be the BFSI segment, followed by manufacturing and Govt. verticals. Even the provider base for Managed Service players in the market is growing with everyone claiming to be a managed service provider with one or the other field of expertise.

What are the emerging trends in the managed services space?

In this competitive world, focusing on core competencies is the key to survival and success for any business. Companies are rapidly looking at outsourcing services to managed service providers to get quality of services with the required SLA in place, which becomes more cost-effective and also reduces the manpower count within the organization. As per the recent trends organizations are looking to outsource more and more operational tasks and prefer to outsource related work to single service provider to receive quality of service. The concept of cloud computing; sharing infrastructure and platform is a great example of the recent trends how organizations are looking at managed solutions for optimizing spend and receiving ultimate quality of services. Another key trend that is seen in recent times is the revenue share mode for managed service providers as per the service delivery.

The key sectors that stand to benefit from managed services?

Any and all sectors can benefit from managed services in one way or the other, primarily the ones that already benefiting from the services are BFSI, PSU's, manufacturing and ISPs and govt organizations.

Why should managed services be custom-made and business-specific?

Most organizations operate and perform in a certain way, for managed service providers it is very critical to provide excellent user experience and service without making organizations divert from their existing business operations and key process areas. It is very important for managed service providers to understand the business and critical business process for being able to manage a customer environment, thus customizing the managed service framework to provide service quality and superb service experience. This can only be done if the managed service provider has matured practice to modularize and customize services as per customer requirements.

What is the demand for managed services in India?

The demand for managed services in India is growing very rapidly with several organizations looking for qualified managed service providers to provide end-to-end services. As per the recent trends this demand is going to grow tremendously in the next couple of years with several new modes of outsourcing and innovative managed service offerings to cater to the ever changing demand and environment.

Can you give an overview of your organisation's managed services offerings?

GoIP Global Services is a matured, managed services player providing end-to-end quality services to customers in the domestic as well as International market. GoIP has been in this space since last few years initially starting from providing monitoring and remote services to international customers and last few years has provided state of the art security monitoring and managed services to fortune 20 customers as well. Today GoIP has the right platform and matured framework to provide Managed Business Services and not just the silo managed services to customers, which is what global customers are looking for in a managed service provider. Our service offerings cover the scope of services ranging from; Desktop, Network, Platforms, Application and Security.

Can you name some of the MSPs with whom you are working in the sphere of managed services?

Since GoIP has been in this domain for quite some time; we have worked with few Global mid sized managed service providers in the U.S. and in the Indian market we are closely working with other large players like Sify, Wipro, HP etc.

What are the challenges for enterprise managed services in the Indian market?

There is a rapidly increase in demand for managed services and the challenges customer face is only the lack of knowledge of services available to ease their operational challenges and reduce spend. The knowledge limits them from choosing the right vendor or service support and most of the time they end up with silo service offering from the vendor, which enables the vendor to provide element uptime but fail to meet the business service uptime which actually hampers the service delivery to the end customer, resulting in poor service delivery.

Are enterprises comfortable trusting an external operator that does business with their competitors?

We have not seen this as a challenge as of today, this actually works towards the benefit of the operator and as a reference point. Since there is limited knowledge of the benefits and service offerings majority of the customers tend to take the same service points points add a few more of their requirements and take services from operators.

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