Applications Managed Services | Market, Trends, Growth | Suppliers Analysis

Strategic Sourcing Guide to Applications Managed Services Procurement

Overview

A changing ecosystem within the IT Management and Change market also affects the procurement process, cost dynamics and supplier attractiveness for the buyers of Applications Managed Services. Rise in the cost of certain essential assets and supplies required to deliver Applications Managed Services is making a significant addition to the supplier's overall expenditure. This could have an inflationary impact on buyer's procurement expenditure in the Applications Managed Services market.

New locations and vendors are emerging as cost effective suppliers of Applications Managed Services, offering an opportunity to widen the supplier base and gain further negotiation leverage with incumbent suppliers.

The cut-throat competition in the category is compelling suppliers to go aggressive on their pricing structure and increase their spend on sales and marketing activities. As a result, most suppliers are feeling a pressure on their margins and trying to offer higher margin value added services to have a better control on their profitability.

Applications Managed Services Procurement Best Practices

It has become imperative for category managers to remain as agile as possible in terms of their procurement practices. However, it is not always easy to quickly spot and implement alternative practices in a category like Applications Managed Services. To help quick decision making, this report advises on several procurement best practices that have worked well for category managers.

For example, Needs of buyers can vary depending on the industry where buyers operate. For instance, buyers from the financial services industry give high importance to regulatory compliance and data security, whereas buyers from the e-commerce industry prioritize high throughput, low response time, and high scalability. Hence, service providers with a strong knowledge of the security, compliance, and governance needs of buyers' industries and a proven track record of performance with respect to these aspects should be prioritized.

Procurement functions should develop custom processes to gain better visibility and involve Applications Managed Services suppliers early in the procurement process.

Buyers should ask for a detailed account of the data protection capabilities of the supplier. In addition, buyers should also enquire regarding the redundancies available during instances of outages or disruptions. While some providers can provide backup, others may have limited capabilities in hardware redundancy.

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Risks in Applications Managed Services procurement

Applications Managed Services procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Applications Managed Services procurement. Some examples include:

An increase in the integration of IT systems is amplifying the risk of cyberattacks and theft of sensitive data
Procurement without consulting the actual users of Applications Managed Services may result in a mismatch in expectations of the buyer's internal stakeholders versus the actual contract executed
Pricing terms in the contract could prove to be inadequate to safeguard the buyer from impact of a sudden increase in supplier's cost, often arising from a lack of clarity on scope of products or services to be delivered

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Who should read this report

The report is intended to serve as a one-stop reference guide for Applications Managed Services procurement strategy and offers a perfect blend of category basics with deep-dive category data and insights. Therefore, it is ideal for category beginners looking for “Applications Managed Services: Procurement Report 101” as well as for category experts actively tracking the global Applications Managed Services procurement market.

You may have just initiated your research to design a winning Applications Managed Services procurement strategy, or you may be a category expert looking for strategic insights and updated data.Either ways, the report has your requirements covered.

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Key questions on Applications Managed Services procurement answered by this report

Procurement decisions can prove to be costly in the absence of careful deliberation and evaluation of every available option. In fact, more than 90% of the decision makers we work with acknowledge that timely availability of up-to-date category intelligence can help them make better purchasing decisions. More than 80% of them believe that in-house category intelligence needs to be updated periodically to achieve full benefits. If you have read so far, we are quite sure you agree!!

The Applications Managed Services procurement report helps take more informed decisions by placing all the critical information and advice at the fingertips of a decision maker. It also specifically answers some of the key questions that we have been routinely asked during our industry outreach initiatives:

What is the spend potential in the Applications Managed Services market?
What is the correct price to pay for Applications Managed Services? What are the key trends and factors that influence current and future pricing?
Which selection criteria are the most important for Applications Managed Services Suppliers Market?
Who are the top Applications Managed Services suppliers? What are their cost structures?
Which negotiation levers can reduce Applications Managed Services procurement cost ?
What are supplier margins in Applications Managed Services market?
What are the best practices for Applications Managed Services procurement and what are the potential risks?

SpendEdge Insights has helped procurement professionals and sourcing teams manage multiple spend areas and achieve more than $2 billion in savings. Activate your free account today!

Applications Managed Services Category Insights: What is inside

The Applications Managed Services market report offers a complete picture of the supply market and analyzes the category from the perspective of both buyers and suppliers. Analysis of the category trends, procurement best practices, negotiation levers and overall category management strategy advisory are interspersed with in-depth data and commentary on spend outlook, pricing ecosystem and supplier landscape drilled down to a region-level coverage.

Data

A key highlight of this report is the in-depth outlook created on Applications Managed Services procurement spend and pricing trends. The report further delves deep into the aspects of cost structure, total cost of ownership and supplier margins for Applications Managed Services. A dedicated section to supplier profiles and evaluation helps decision makers cast a wider procurement net and identify gaps in existing relationships.

Insights

Along with specific category and supplier intelligence, the publication also includes curated insights on Applications Managed Services market trends, price influencers and inherent risks. These insights help the decision makers prepare for market shaping trends in advance and create alternative strategies for changes in the market conditions.

Advisory

Additionally, the report also advises on the best practices and strategies to manage the Applications Managed Services category efficiently. Negotiation levers and opportunities are explained in detail along with quantification of their potential. Benchmark KPIs for supplier and buyer performance management are also aggregated to better organize the category objectives. Other themes of advisory include ideal procurement organization structure, enablers to achieve KPIs or category objectives and ideal SLAs to have with suppliers.

Category Ecosystem

Buyer and supplier ecosystem
Competitiveness index
Buyer and supplier power
Threat of new entrants and substitutes

Global and Regional Sourcing Insights

Category spend
Spend growth
Dynamics
Opportunities

Pricing and Cost Analysis

Pricing outlook and data
Drivers of pricing
Cost structure and inputs cost
Total cost of ownership
Pricing models and margins

Cost Saving Opportunities & Negotiation Strategies

Buyer and supplier side levers
Quantified cost saving opportunities
Negotiation strategies and quantified outcome

Procurement Best Practices, Strategy and Enablers

Procurement excellence
Sustainability and innovation
KPIs and category enablers
Risk management and outsourcing

Vendor Analysis

RFx essentials and selection criteria
SLAs
Supplier evaluation metrics
Detailed supplier profiles

Our research is complex, but our reports are easy to digest. Quantitative analysis and exhaustive commentary is placed in an easy to read format that gives you an in-depth knowledge on the category without spending hours to figure out “what does it mean for my company?”

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Category Research Framework

SpendEdge presents a detailed picture of Applications Managed Services procurement solutions by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key category influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.