The Managed Service Paradox
This paper examines the contrasts in the provision of managed service in the information and communication technology (ICT) sector. It highlights the polarization between infrastructure services that are growing in scale and increasingly becoming a commoditized, and customized or even one-of-a-kind service projects. The paper refers to the approaches taken by three highly innovative advanced service companies, IBM, Ericsson, and Cable & Wireless, to package and deliver ICT service on a more industrialized basis. The authors identify the six-stage process that describes these companies’ journeys to date from. They explore the challenges these companies faced on that journey as well those currently facing them as they move to a higher degree of industrialization. To address these challenges, the authors propose a model with three axes: offering development, service delivery, and go to market. The model demonstrates how the increasing industrialization of managed service requires an approach integrating all three of these dimensions. They also show that strong governance is required to address the impacts of technological evolution, marketplace dynamics, and corporate culture. The paper has formed the basis of the academic and executive education programs taught at both Imperial College and is the heart of the new service design masters program at the Royal College of Art. Because of its relevance to large industrial companies seeking to transition from an industrial offering to a service or solution led offering, the paper has been turned into a course that has been delivered to Arup, Vodafone, Finmeccanica, Telefonica, Samsung and Laing O’Rourke to date and this programme has been delivered by the authors in Korea, Taiwan, US and the UK.
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