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Next-Gen Managed Services Delivery Model for Operational Technology Systems

Next-Gen Managed Services Delivery Model for Operational Technology Systems)

Meet David, the factory manager who is accountable & responsible to run the operations at its optimum performance aligning to organization's plan and strategy.

His performance KPIs are linked to performance of a factory. For example: Continual increase in production while reducing the cost per unit production, 100% conformance to quality with zero waste and/or re-work, improved safety with zero accidents in factory etc. It is critical for a factory manager to balance 5 core functions of manufacturing operations including Production, Quality, Maintenance, Inventory and Safety to meet factory's performance KPIs.


Figure 1: Factory Manager's Problem Context

Inevitably, he gets involved into many supplementary functions and/or activities of the core functions making his job stressful deviating his attention from his core KPIs at times. For example: Maintenance comes with burden of multiple services vendors management, license management, End of Life (EOL) management, skilled people management etc. whereas a KPI of maintenance function is to ensure availability of systems, assets to the business. He is not finding time for providing and implementing business value, vision and  leadership to his factory.

There is a need of reducing burden of some of his supplementary functions and/or activities allowing a factory manager to focus on core functions of factory operations meeting factory's performance KPIs to keep the business ahead in the market over their competitors. 

The fundamental building block for all core functions to perform to its optimum level is availability (100%) and performance (to its target capacity) of all systems in factory including machines, OT and IT systems.

Now let us first understand the systems in a factory. Where does IT and OT systems fit in the factory landscape?

Figure 2: OT and IT Systems Mapping 

ISA95 provides simplified view of systems in any factory or enterprise.


Level 0 represents actual physical manufacturing process in the plant. e.g: machines.

Level 1 represents instruments sensing data of physical processes. e.g: instruments manipulating the physical processes (sensors and e.g actuators).

Level 2 represents the programmable controllers controlling the physical processes like PLCs, DCS or SCADA.

Level 3 represents all software applications supporting in optimizing manufacturing processes like MES /MOM.

Level 4 is an enterprise IT applications layer.

The systems dealing directly with manufacturing processes are termed as OT systems whereas systems managing flow of digital information are termed as IT systems. Historically, OT and IT systems landscape were being looked as separate entities in an enterprise. OT systems are production & time critical, following proprietary architecture requiring skilled team from diverse OEMs mandating on hands & feet support services.

IT Services Management

OT Services Management

IT are Cyber systems enabling to troubleshoot remotely.

OT are Physical (Hardware + Software) systems requiring hands and feet troubleshooting.

Response & Resolution time (MTTR) is less critical compared to factory applications.

Response & Resolution (MTTR) time for factory applications are critical as these applications are directly integrated to physical processes (production).

Diverse COTS product vendors with dependency on them for troubleshooting  because of proprietary architecture.

Products following standard IT protocols and open standards.

Systems working in silos limiting transformation.

IT Services Management model is well established (ITIL).

Systems working in harmonized processes helping to drive transformation.

OT Services Management model is not yet industrialized like IT.


Managed Services with E2E ownership with support vendor.

No managed services; ownership lies with factory to manage diverse OT landscape.

Table 1: IT and OT Services Management

The OT support services do not have and/or follow any structured support service processes like ITSM (IT Services Management). We all know, IT landscape have realized the benefits of reduction in incidents, system stability, automation & innovation driving business benefits after following ITSM framework like ITIL for over past 2 decades.

So, the question is, can we leverage ITSM processes & tools in OT landscape to realize similar benefits? The answer is yes, in fact it is a need of business now. The boundaries  between IT and OT systems are disappearing  day by day with the IT and OT convergence for enabling single source of truth across the enterprise. It can no more be envisioned  as separate systems and/or landscape from support & governance perspective for business benefits. The integrated systems and operations would require harmony in support processes as well. A traditional approach of looking both IT and OT through two separate lenses limiting the business transformation opportunities will be surpassed. 

Further, would it help in reducing the burden of supplementary activities of a factory manager by outsourcing and/or handing over an end-to-end ownership of availability & performance of all systems in factory including machines, OT and IT systems? Managed Services Delivery with Total Cost of Ownership (TCO) !!!

Managed Services Delivery with TCO is very well practiced in IT, Network & Infrastructure area of business landscape however it is not cascaded yet to OT landscape. It may not have been cascaded because of inherent risks involved with nature of business and/or around people, processes, technology, strategy and security aspects of OT landscape. It may be appearing as very long in futuristic vision or strategy for many industries for now however "Think Big and Start with Small".

Here is our recommended approach for running OT landscape as managed services delivery with TCO. Start with small, define the next-gen outsourcing managed services delivery model, validate through pilot implementation at single factory, refine & industrialize it and then further roll it out to other factories. Initially, define conceptual delivery model and execute a pilot in one of the factories. The learnings gained during the pilot should be infused back into the delivery model to further strengthen it and thereafter we can publish our industrialized model to roll it out to rest of the factories.  

Figure 3: Managed Services Delivery Implementation Approach for OT

We suggest taking stage-wise incremental & iterative approach for taking over OT and/or factory systems support services as managed delivery. The factory systems will be logically classified into 4 different stages.

Figure 4: Stage-wise approach for managed service delivery of OT services


Stage 01 will cover the factory systems built entirely on IT platform /services; manufacturing operations applications, SCADA, Historian systems etc.

Stage 02 will be next logical stage where system complexity & business criticality will increase stage 01 systems. The systems having hardware and firmware running on it with programming ability like PLC (programmable logic controllers), microprocessor /microcontroller based IIoT Gateway devices etc.

Stage 03 will cover electro-mechanical systems like actuators, sensors, control panel, control system I/Os etc.

Whereas stage 04 will focus on mechanized assets like machines which are the backbone of running manufacturing processes.

IT services framework of Transition /Transfer, Run, Elevate/Transform and Innovate can very well be followed within each stage. The objective of RUN phase will be supporting business as usual (BAU), with zero disruptions to business during and after the transition /transfer. Elevate and Transform phase will focus on bringing in optimization and business transformation ideas in the OT landscape. Innovate phase will continue to explore opportunities of enabling next-gen digital transformation solutions in the OT landscape.

It is advisable to retain incumbents (and/or system integrators) as business de-risk strategy for stage-02 /03 & 04 systems. The identified managed services providing vendor will write back-to-back contract with these incumbents as per the KPIs, services expectations set by the end customer. This delivery model will impose complete accountability with the vendor (one neck to choke) while reducing the burden of managing (following up) with multiple vendors and getting required business value. In multi-vendor support delivery model, performance looks like watermelon, looks green from outside however still red from inside. It should have been other way around.

The comprehensive integrated visibility of entire OT landscape to one single vendor will also provide ample amount of opportunities for business transformation, vendors optimization, OT landscape architecture simplification & standardization opportunities performance benchmarks etc.

How TCO of services will be managed? The as-is factory /OT systems purchased by customer will remain with them until those are due for refresh /replacement. Vendor will borne the CAPEX cost at the time of license renewal, EOL replacement, machine replacement and/or at the time of modernization programs in brownfield landscape. Thus over a period of time, both CAPEX and OPEX will be borne by vendor helping business to focus more on their core functions.


The fundamental building block for manufacturing operations to perform to its optimum level is availability (100%) and performance (to its target capacity) of all systems in factory including machines, OT and IT systems. Adoption of ITSM (ITIL framework) in OT landscape will help in realizing the benefits of reduction in incidents improving availability, system stability improving performance, and automation & innovation driving business transformation benefits. Stagewise, incremental & iterative adoption of managed services delivery model for OT landscape will help in bringing in one single comprehensive view and thereby next-gen business transformation opportunities. The TCO of OPEX and CAPEX will offer altogether different level of competitive benefits to an enterprise aiding them to focus on their core manufacturing functions.

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