Preventing surprises by nipping them in the bud
Are you considering hiring a new managed services provider (MSP)? Maybe you’ve never outsourced your IT before. Or perhaps you want to improve the relationship with your current IT services provider.
The purpose of the article is to help you find and sustain the right match by asking the right questions.
You’ll also gain the added advantage of some “inside baseball,” so you have more specific industry insights.
1 – Describe your process and how client success is measured?
If you’re considering making any significant change, it’s probably motivated by several concrete business reasons. Your current process has gaps, and you need a better solution to eliminate operating obstacles and achieve lift.
Your prospective MSP should be able to articulate an easy to follow journey that demonstrates:
- How they define and solve problems as well as prevent future issues
- Why they will recommend better solutions throughout the relationship
- Their system and timeline to track results
One popular benchmarking framework is Operational Maturity which has five classifications: Beginning, Emerging, Scaling, Optimizing, and Innovating.
In a nutshell, beginning companies do not leverage standardized technology and have a hard time scaling and growing. At the other end of the spectrum, innovating companies do leverage standardized technology. As a result, they can dedicate more of their resources to strategic growth initiatives that maximize enterprise value.
Your timeline for enhanced operational agility and profitability depends on where you are now. (It’s impossible to go from scaling to optimizing in six months.)
However, discussing the tiers and the timelines upfront puts the vision in motion, sets the expectation of a scoring system, and paves the way for accountability.
Learn More: Operational Maturity
2 – Who is a perfect fit for your company and who is not?
This question is an excellent way to open the flood gates of transparency. Successful MSPs understand the cost of taking on the wrong type of client and will shy away from starting a relationship that appears to be a mismatch from the start.
The ideal client for many MSPs might be described as "a growing organization who values the application of strategy and budgets to a proven IT process based on standards and best practices – to improve performance and lower risk."
On the other hand, if you have a heavy in-house IT presence maintaining your backend systems and providing user support, you may only require occasional, break-fix IT services.
This would make a full-service MSP a bad fit because they offer a complete portfolio of services (priced accordingly), and it's not profitable for them to dispatch engineers for tactical, hourly engagements.
Forthright MSPs will also let you know if some of these other factors are outside of their comfort zone to support:
- A large custom software development footprint
- A distressed server and workstation environment
- Geographical locations outside of their service areas
- Industries with specialized regulation and compliance requirements
- 24/7 live help desk for very basic user support inquiries
And don’t be afraid to identify yourself as a bad fit. Every city in The United States has hundreds of MSPs. You'll find somebody.
3 - What can we expect to pay every month?
Pricing depends on a variety of contextual factors as well as the MSPs business model. Here are two simple examples.
An MSP that charges you a fixed fee to monitor, manage, secure, and support all IT systems and users will charge you less if your environment is in good shape and more if it’s in disarray.
And they can easily cite a few ranges to qualify the budgetary fit.
Another MSP may have a variation of the managed services model where they have set fees for automated system services that run in the background and a monthly allocation of hours for user support requests that come into the service desk.
One month the service desk may be overwhelmed. The next month it could be quiet. They may also bill separately for consulting services.
In this second scenario, it will be more difficult to estimate potential monthly costs upfront. There’s a lot of room for variance.
Would you prefer something set in stone or are you comfortable with some ambiguity?
4 - Describe a major service setback you experienced and how you responded to prevent it from happening again?
When a potential service provider is candid about an unpleasant experience, it creates a higher level of trust and rapport. It also gives them an opportunity to share what they learned, and how that lesson made them stronger, and potentially better able to serve you.
Every managed IT services provider has a phase in their early history when they ignored their gut instincts and took on a difficult client they were hoping to change.
The financial rewards of a $6,000.00 per month account can sometimes unleash an unrealistic sense of confidence in a small business owner who wants to grow.
What happens when a client refuses to transform?
- You offer managed IT, but they want just in time computer and server repair on ancient machines.
- They delay their planned migration to VoIP and instead expect you to service a ten-year-old phone system that the manufacturer no longer supports.
- The primary contact is so abusive, one of your top engineers leaves the company.
- They cost you $8,000.00 per month to support.
Most of the companies in the IT space aspire to make the lion's share of their money from value-added management and advisory services. Trying to maintain equipment that is way past end-of-life status is not part of the business plan.
Reselling hardware and software may be necessary to keep client systems up to date and secure, but recurring revenue is the ultimate prize.
Plus, hardware and software projects are seldom profitable.
If set up correctly with the right strategic foundation, MSPs love recurring revenue clients with standardized and quiet business systems that don’t require expensive and reactive support.
Both the client and the MSP win in this arrangement. Neither is busy dealing with fires, so the coast is clear to focus on what’s most important.
Where does your MSP draw a line in the sand? Will they take anybody, or do they require everyone to follow the same standards?
If an MSP makes a lot of exceptions, these exceptions kill standards and processes. Both forces kick off a chain reaction of insurmountable problems that will eventually impact all of their clients, including you.
5 – What is your five-year plan?
Selecting a new MSP is probably not something you want to do every two years.
Wouldn't it be nice to know you are partnering with a company that plans to be around as long as you do?
Merger and acquisition activity is lively in the MSP world. Ownership is changing hands as small shops sell to larger providers. Many MSP owners are completely cashing out and retiring.
If an MSP is willing to discuss their five-year plan, they should immediately edge out any contenders who balk in their reply.
Conversely, I hope any IT provider you are interviewing will ask you the same question. Their concern to inquire reflects a commitment to the long-term.
Along with full disclosure, the following factors are other signs an MSP is planning to be around for a while:
- They're driving the conversation around Software as a Service (SaaS) and hyper-growth public cloud solutions.
- A majority of their recurring revenues are from cloud solutions versus legacy premise-based assets.
- Security and compliance advisory are included in their service offering.
- They're willing to invest in annual SOC2 and MSP Cyber Verify audits and share the reports.
I just scratched the surface here. But I hope I succeeded in giving you some new angles to consider.
Client retention and references warrant an honorable mention.
I intentionally left out a standard question buyers like to ask: “How responsive are you?”
Why? It's impossible to answer without first understanding the client’s IT environment and user expectations. It also sets the wrong impression about the main goal of managed IT: to create quiet systems that don’t require, rapid-fire emergency intervention.
Have any additional questions? The ProviDyn team has decades of experience, and we look forward to guiding you.