When we talk about managed IT services, we’re talking about outsourcing a specific set of infrastructure or software tasks to a third party. The managed services provider (MSP) does more than providing the platform or the equipment, though. The notion of “managed” IT services is critical. The MSP has someone working specifically to ensure that you get the services that you expect.
With a platform provider, such as Salesforce or Office 365, you have a contract with a company that will keep the service working at a specified level and offer help if things are going wrong. But there is little scope to specify precisely the service you want and have someone make sure that you get it. For our purposes, these platforms do not count as managed IT services.
Why you need managed IT services
A managed IT services provider will aim to meet the cost and scope of the deliverables you specify. For example, you might want voice services and nothing else. This would be like buying only the spreadsheet tool from a platform provider, which is a level of control they don’t typically offer.
Of course, an MSP has to make money, so they will aim to create efficiency by offering a range of off-the-peg services. Customers can specify something different, but the more bespoke the offering, the more expensive it is likely to be. Again, a typical platform provider would not even offer this kind of bespoke solution.
The managed IT services provider will then offer reactive and proactive monitoring to make sure that services run as expected and offer a procedure to follow when they don’t.
A recent trend is for co-management of services, which offers the customer even greater control. An MSP will commit to a certain level of response when there is a problem. For example, they might agree that they will identify a problem within two minutes and have someone fixing it within 15 minutes. The MSP would prefer to spot the problem and fix it before the customer is even aware that anything is wrong but this doesn’t always happen.
However, if the system is one the customer depends on, they will often notice the problem first. In a co-management scenario, the MSP will allow the customer to step in and fix it. This is simpler than it used to be because technology is becoming easier to use. Many of today’s tools have graphical user interfaces so the customer doesn’t require lots of training to be able to use them.
The risk with co-management is that a contentious situation arises where, for example, the customer accesses the system to fix a problem but makes it worse. The customer might blame the supplier, and vice versa. It is vital to define the process for resolving potential conflicts when the contract is agreed. These situations are rare but they are much harder to resolve if there is no process in place.
A good MSP will minimise the risk by making sure the customer understands how the system works and can access only the tools they need. It’s also important to have a proper audit trail so that everyone can see what actions were taken and by whom.
We’ll look at contracts in more detail below. Before that, however, we should consider why a customer might want to use managed IT services.
Costs and benefits of managed IT services
Just as the reasons why you need managed IT services might vary, so will the costs and benefits. Each business is different and will have its own needs but there are a few typical benefits of managed IT services:
Running a service yourself is expensive
- Keeping a service going 24 hours a day, seven days a week requires a minimum of eight people per month. That’s a team that must be recruited, trained, managed and then kept up to date with new trends and developments. Your team will have an on-call rota to handle problems that arise out-of-hours, but with a small team it’s likely that whoever is on call will not be the expert you need. They will have to call someone else, which will delay the fix even further.
- MSPs remove that entire issue entirely. With a whole team of experts on hand, they can ensure that there is always a specialist monitoring your service. That allows them to get on with fixing a problem, whenever it occurs. And you, the customer, are not responsible for recruiting and training those people. Their training is covered by the service charge but that is spread among the MSP’s customers, so you are sharing a cost rather than shouldering it yourself.
You don’t have to deal with the equipment
- You aren’t buying equipment, setting it up, maintaining it and dedicating precious office space to it. And don’t ignore the benefit of freeing up office space that was once taken up by servers, routers and other tin boxes. Imagine a law firm, for example, and consider how much more value they get from office space that has fee-earning lawyers in it, compared with space that’s devoted to IT.
- MSPs can do this for less because they buy at a scale that brings costs down significantly. Moreover, the customer is buying only a piece of that equipment, so the costs are even lower.
You can get a more comprehensive solution
- That said, cost is not the only motivation for taking managed IT services. In fact, some companies will find that their managed IT services cost more. That’s usually because the managed IT services framework they are getting offers more than their current provision. That might mean greater redundancy to prevent outages, higher uptime, and so on. If you get a quote from an MSP that is higher than you expected, compare the service levels with what you have at the moment.
It can simplify your IT operations
- There are other drivers besides cost. Many companies are looking for ways to simplify their operations. Managed IT services can be ideal. Getting an expert to handle processes that are outside your core purpose is a good way to simplify.
It’s easy to add new services
- Adding new capabilities can add complexity, too. Having an MSP means adding a new service can be as simple as picking up the phone. This can be particularly useful with a capability that you anticipate needing for only a short time or for services that you might want to bring in-house later .
Once you’ve weighed-up the benefits and costs, and found the right supplier, you will be ready to sign a contract. But before you enter into any managed IT services agreement you need to consider what you need, and what you have now.
Auditing your system
The first step to getting a managed service is to perform your due diligence. That means auditing what you have at present. You might want to bring in an expert consultant to do this, because they will be more aware of common pitfalls but your in-house experts might be able to do it, too.
There are several questions to answer: What services do you have right now? How are they provided? And how supportable are they? If the MSP stops supporting one of your services during the term of the contract, what happens to it? If something in your IT estate is coming to the end of its life, then your contract might specify that you have to pay to transition to another solution.
As well as what services you have, you will need to consider how they are used, and by whom. How do your services relate to users? How often are they used and what availability do they need?
At this point you should also make sure you understand your data governance requirements. If you are in a highly regulated sector then there may be rules about where your data can be stored, whether it can cross international boundaries, and so on. You may be required to keep detailed records about how data is stored and accessed. MSPs can accommodate these requirements but you have to understand them at the outset, otherwise important steps might be missed, which could lead to compliance failures later.
The goal is to have a good picture of your current systems and to identify any potential obstacles that might affect the move to the MSP or that might mean changing the way things are set up. Once you understand all that, you need to decide what type of contract is best for you.
Managed IT Service Contracts
A ‘Pay as You Use’ deal is the lowest commitment way to take on managed IT services. It works well for services that are mission-critical but only during certain hours. You don’t need out of hours support or round-the-clock access for these services, so it can make sense to pay only for the CPU, memory or disk space that you use.
This kind of deal gives you the agility to increase or reduce service levels based on your needs. Some companies use them for development environments so that they can quickly test different versions of certain services and then turn them off when they are done. These aren’t long-term budget items, so the approach makes sense.
Another option is to have this available for extra capacity. For example, if your company runs a travel website and a rival site goes down, you will often see an influx of traffic as your rival’s customers try to find someone else to handle their booking. This irregular traffic is ideal for a Pay as You Use deal. However, this kind of contract isn’t cost effective in the long run for round-the-clock service provision.
An alternative is to take a service on a ‘Call-Off Basis’. This is more of a commitment, and one that works for static or business critical services. You commit to a certain number of hours of a particular service every month, such as emergency support. These contracts are less common than they used to be.
The most common type of contract is a longterm one that typically runs for 36 months, which matches the standard hardware and software life cycle. If you agree to a contract at a point when you’re carrying out a refresh of your IT estate then by the end of the 36 months you will usually be ready for another rethink. Your needs might have changed, technology could have moved on, and so on.
Of course, 36 months can be a long time if your needs change suddenly. It’s worth allowing for this in the contract. Are you completely tied-in and committed to spending, even if you no longer need the services? Is there an option to renegotiate halfway through? Do you have the option to stop one service and spend your money on another instead? You might be perfectly happy with a contract that locks you in. That’s fine, as long as you know that’s the deal.
Something else you will have to decide upfront is what kind of reporting and KPIs you expect. A platform service like Office 365, in contrast, will typically have no flexibility when it comes to availability. A public cloud service might offer 99.9 percent uptime, non-negotiable, which is almost nine hours of downtime per year. Five nines (99.999 percent) means a little over five minutes of downtime per year. Add another nine – 99.9999 percent – and you have a mere 31 seconds of downtime per year. The more nines you expect in your availability, the more expensive it will get.
The same is true of reporting. Slight changes in the reports that your MSP provides will usually be possible. If you want to make major changes, then this too will come at a cost.
This is also the point at which you will agree to the service credits you will get if performance falls short of agreed levels or there is a breach. Working with an MSP is about building a partnership, but that won’t happen if service credit levels are too punitive.
Finally, remember that prices fluctuate, often as frequently as every 30 days. This is because the MSP will almost certainly be buying parts of the service from its own suppliers, whose prices will fluctuate. This is something to understand when you agree to the contract.
Onboarding to Managed IT Services
Everything so far has been about preparation: determining what you need and why, auditing your systems, services and how they are used, and negotiating a contract that fits your needs. If all of this has been done well, then the process of onboarding to the MSP should be relatively painless.
Your provider will give you a project plan – and if they don’t, you can ask for one – based on what you have now and what you are moving to. Extra time should be built-in for contingencies, so the MSP might tell you that the process is usually done within four weeks but could run to six.
If you are moving from an existing service provider then make sure you understand what happens if there is a delay. Do you switch to a rolling, 30-day contract, for example, or move to Pay as You Use? Make sure that staying with your existing managed IT services provider for longer doesn’t mean getting locked-in to another long contract. You don’t want to end up contracted to two service providers, one of which you aren’t using.
Ensure that your plans include decommissioning the systems you are replacing. That should include making sure that data is properly deleted from any hardware, particularly hardware that is going to be disposed of, or recycled.
The MSP will be used to handling onboarding for clients and will take care of much of the process, but don’t expect them to do everything. Make sure you have a project sponsor internally so that everyone understands what you are doing and why, as well as a hands-on project manager who can liaise with the MSP and keep things running smoothly.
Once everything is ready to go, do a baseline test to check how the system is running. It is easy for users to complain later on that the new service is running slower but nobody can confirm that without data. It might be that there are patching or configuration tweaks that your MSP can make early on to get things running more smoothly. Once everyone is happy with how the new system is running, you will have a benchmark that can be used to monitor performance as the service goes on.
At this point, all that remains for you is to get on with your work and let the MSP take care of the services for you. This could be the beginning of a long and fruitful relationship. However, your needs could change and, for whatever reason, your MSP will no longer be the right option for you. That’s when you will need an exit plan.
Leaving a Managed IT Service
It’s best to have any exit plan in place well before you need it. When you get on an aircraft, one of the first things you are asked to do is familiarise yourself with the location of the exits and listen to the plan for evacuating the aircraft. Likewise, it’s a good idea to make sure you know where the exits are when you get into a contract.
One reason why you need to establish the exit plan at the outset is that, once you decide to leave, the MSP might be unwilling, or unable, to go beyond the terms of the contract. Most MSPs will try to help as much as is reasonable, but once they no longer receive revenue from you they will be under pressure to spend their time on paying clients.
If you haven’t negotiated what you will get at the end of a contract, then everything will have a cost. You might want your MSP to audit the services you have with them so you can create a report for your new provider, for example. If that is not in the contract, then they will charge you for it.
Leaving an MSP is a reversal of the onboarding process and, if you are leaving for another provider then you might need your old provider to work with your new one to ensure the migration goes smoothly. How well providers work together will vary.
Your new provider will want to understand what services you have already and the more information they have, the better. Your existing provider might let them access the system so they can see it for themselves, but they might not. This could be for confidentiality reasons or simply because they are concerned about risk. What happens, for example, if your new provider breaks something while conducting an audit?
Finally, as mentioned above, the move to a new supplier can be delayed and you might need to extend your time with your existing provider. This will go much more smoothly if you have already agreed the terms under which an extension will happen. Is it automatic? How long will it last? And what is the notice period?
Managed IT services can help your business to simplify, cut costs and focus on what you do best. And it doesn’t have to be complex. The key is preparation. Following the steps outlined in this article will go a long way to ensuring that you are well prepared.
- A managed service can allow you to put some processes in the hands of experts so that you can focus on core priorities.
- They can often save money on handling those services in-house, and when they don’t it is usually because you are getting a better level of service than you had before.
- Ensure that you plan for every eventuality at the contract stage because this will help avoid potential disputes later on.
- The onboarding process can be complex so make sure you plan carefully before you begin.
- It’s easy to overlook the exit from a service when you’re just getting started but considering what happens at the end of the contract is time well spent.
Do you want more help selecting a managed services provider? Feel free to reach out to our team to see how we’ve helped other organisations grow and align their technology solutions with their business goals.