Uber, the on-demand ‘driver for hire’ mobile service (ODMS) has become the poster-child for digital disruption and ‘convenience tech’.
Unsurprisingly, digital innovators around the world are now seeking to ‘Uberfy’ various business models with convenient on-demand mobile services that match demand with supply. Tap your phone, get service. Charge the credit card.
Watch your entrepreneurial fame and fortune rise.
Indeed, when the world’s most famous ‘transport’ company doesn’t own a single vehicle (Uber); the biggest retailer doesn’t own stock (Amazon), and the most admired travel company (Airbnb) doesn’t own property, it’s no wonder that digital leaders and entrepreneurs are trying to replicate the model in various other sectors.
Yet while some will certainly succeed, albeit, with iterations, most will fail…simply because current alternatives to traditional business and service models are actually inconvenient and offer poor value. Their model is missing a trick.
The key element of the original Uber model, and the other digital behemoths noted above, is that Uber doesn’t own a single car. They essentially manage a taxi service for you. It’s the same with Mr Delivery and Uber Eats – they don’t own any restaurants or delivery vehicles, they simply provide a service in an efficient way and address a pain point for consumers.
In the business realm, this is commonly known as Managed Services. Today, countless businesses follow this model without even being aware of it!
Take the telecommunications provider Turrito Networks, for example. Turrito offers connectivity solutions, but unlike their competitors, they don’t actually own and operate a network. In fact, their key differentiator is on-demand, customised and high-quality service. Similarly, Dial a Nerd provides a host of connectivity and IT management solutions for homes, schools and businesses using the Managed Services model.
Put simply, Managed Services is the practice of outsourcing management responsibilities and functions on a proactive basis, and adopting a strategic method for improving operations and cutting expenses. It is also an important alternative to the break/fix or on-demand outsourcing model whereby the service provider performs on-demand services and bills the customer only for the work done.
Under this ‘subscription’ model, the client or customer is the entity that owns or has direct oversight of the organisation or system being managed; whereas the Managed Services Provider (MSP) is the service provider delivering the managed services. The client and the MSP are bound by a contractual, service-level agreement that states the performance and quality metrics of their relationship.
Streamlining Services, Improving Outcomes
Adopting Managed Services is seen to be an efficient way to stay up to date on technology, gain access to key skills and address a range of issues related to cost, quality of service and risk.
Also, as the IT infrastructure components of many SMB and large corporations are migrating to the cloud, many MSPs (managed services providers) are looking to adjust their own approach to service delivery. As a result, a number of MSPs are providing in-house cloud services or acting as brokers with cloud services providers.
Notably, a recent survey found that a lack of knowledge and expertise in cloud computing (rather than client reluctance) appears to be the main obstacle to this transition. For example, in the transportation sector, many companies are facing significant increases in fuel and carrier costs, driver shortages, customer service requests and global supply chain complexities. In addition, managing day-to-day transportation processes and reducing related costs come as significant burdens that require the expertise of transportation managed services (or managed transportation services), providers.
So while the ‘Uberfication’ of many businesses today is perhaps a knee jerk (and often unwise) reaction to digital disruption, the emergence of Managed Services is clearly a sustainable and savvy operating model for businesses looking to evolve and remain relevant in a challenging global environment.