The role of managed services in the transformation agenda

In our era of compound volatility, it’s not enough to just transform. Many companies are doing so continually, with flexible operating models that keep evolving amid constant change.

One way to create those operating models is with managed services that are backed by strong advisory capabilities. Progressive organizations are using these services to facilitate ongoing transformation initiatives that are complex and interconnected.

?To enable continuous transformation, KPMG recommends a focus on several key capabilities, and managed services can play an important role in each:

?1.?? Clearly articulate the vision.?

A transformation is a fundamental shift in the way an organization does business, and successful initiatives start with defining exactly how the change will create value—at the strategic, financial, and operational levels. These sources of value, ranging from reputation and revenue to process improvement and productivity, become the north star for an initiative.

?In addition to defining what the initiative will achieve, consider what will be required. For example, in developing the business case for a cloud transformation, forward-thinking leaders explore not only the benefits that can come from software as a service (SaaS)—such as improvements in cost, speed, and performance—but also how to sustain them long term, beyond implementation. Many leaders establish a managed services model for ongoing optimization of the platform, helping them realize the business case. ?

?In the transformation of a security operations center (SOC), as another example, information security leaders should consider how specifically the new SOC will enable the business—and how services will be delivered. The vision may include finding cyber threats faster, protecting critical assets, improving stakeholder trust, or securing new applications so they can be launched more quickly.

?For a model that can continually deliver those benefits, with the flexibility to change course as needed, SOCs can collaborate with managed services providers in a shared responsibility model. These providers deploy advanced automation at scale while bringing skilled cyber practitioners to manage the technology.

?2.?? Track value throughout the initiative. ?

In an environment of continuous transformation, it’s important not only to have a clear vision but also to decompose it into outcomes that can be measured along the way. This approach allows for course correction to mitigate risk.?

?For example, after the implementation of cloud-based recruiting software, measurable operational improvements could include:

• Improved candidate experience
• Reduced notification fatigue for recruiters
• Improved efficiency of candidate applications
• Faster administrative reporting on job requisitions
• Improved workforce diversity due to analytics on ethnicity, gender, and age

?These are the kinds of sustained improvements that can come from a managed services model for platform optimization.

?Similarly, a SOC transformation with a managed services model could include measurable improvements such as:

• Reduced cyber operational costs
• Reduced adversary dwell time, demonstrating that the SOC can move at machine speed to quickly eradicate a threat
• Improved customer and regulator trust
• Faster speed to market for new applications, based on ongoing security monitoring and analytics in development processes

?3.?? Manage ongoing change in multiple transformations.?

According to recent KPMG research[1], companies on average have three transformations running simultaneously, and a top reason for failure is inadequate change management. The increased pace and complexity of initiatives create a high risk of transformation burnout that can lead to high staff turnover.

To ease this transformation fatigue, companies can use managed services to build agile operating models that can flex up or down to meet fast-shifting priorities. Leading providers combine advanced technology, scale, and expertise to deliver key processes while evolving at the speed of business.

These providers also bring advisory services in change management, helping companies define the drivers for success—from policies and procedures to metrics and incentives—while aligning them across multiple transformations. For example, savvy providers know how to take a big-picture view, developing an enterprise-wide governance language to span overlapping initiatives.

4.?? Build a technology and data foundation to support ongoing transformation.?

New technology is rarely a flip-the-switch solution that makes everything work. Technology can sometimes become a barrier that holds companies back – due to organizational disruption, poor adoption, lack of systems interoperability, or problems with the underlying data architecture.?

?Leading managed services providers, on the other hand, design operations that are tech-enabled but strategy-led. That means they bring not only sophisticated technology but also collaborative professionals with expertise in business functions, processes, industries, and data management. They help ensure that tech is an enabler, not a barrier.

?For example, to continually enable a SaaS transformation, the best managed services providers assist with ongoing systems integration after implementation of the platform, while managing the impact that a change in one system has on another. Systems integration is also critical for shifting data to the cloud, where it can be made usable by generative AI.

?Navigating the ongoing journey

In a world of constant flux, transformation is not a fixed destination, because by the time you get there, “there” has already moved on—with rapid market changes and new ways of doing business. That’s why many companies are trying to master the art of continuous transformation, and managed services are an important part of the playbook.

?Learn more about KPMG Managed Services.

For an archive of my past blogs, please visit Going Beyond: Managed Services.

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[1] The new transformation agenda, KPMG in the US