How to Use a Managed Services Agreement to Determine Actual Value to Your Company

    [fa icon="clock-o"] 3/02/2017 [fa icon="user"] Garett Chipman [fa icon="folder-open'] Managed Services

    managed-servicesRegardless of the size of your business, if you are looking at managed IT services, you want to feel confident that you are getting the best value, especially if you have been presented with a price that seems too good to be true.

    The common concern I hear consistently when I speak with CFOs and business owners is "If our IT cost is so amazingly low, are there holes in our IT services? Is anything missing?". This is an important question to answer, and any managed services provider (MSP) dedicated to your company's success will be able to answer it directly.

    However, the answer as to the value you're actually getting based on what you're spending is provided in writing in the managed services agreement provided by the MSP before you sign on the dotted line.

    How Outsourced IT Services Valuation Should Be Approached

    When it comes to outsourcing your IT services, it's important to understand that the benefits to your business should be part of the valuation of the agreement with the MSP. Are the services promised at the proposed cost going to accomplish what you need to leverage your staffing for your IT needs while providing the protection, maintenance and support your business requires? 

    IT outsourcing can, in fact, save money while filling the gaps for your business. Where the savings are realized include reduced downtime, access to experienced experts on an as-needed basis, streamlined procedures and the overall efficiencies that come from a proactive approach to infrastructure support. Strategic outsourcing is a partnership, not a hand off.

    There is ample flexibility to develop the coverage that fits your unique situation due to the ability to customize selected IT services, and as your situation changes you can change your coverage.

    As the old adage goes, a business can be a combination of faster, better, cheaper--but it can’t have all three. So pick two—and pick them wisely. 

    When reviewing a managed services agreement, what essential items should be included? What will determine if it is of value to your business specifically? The following should help answer these questions and position you to make an educated decision for your business. 

    What a Managed Services Agreement Should Provide to Customers

    Understanding what makes a managed services agreement valuable to your business is important when reviewing proposals from providers. A managed services agreement is valuable to the customer when it accomplishes the following:

    1. Provides the comfort level required to engage with the solution provider through documentation of the deliverables as well as the SLA.
    2. Clearly defines the service provider's services and how they are delivered.
    3. Identifies what hardware, users, vendors and services are covered, as well as those that are not. It clearly outlines the services the client will receive as well as what the relationship looks like between the MSP and the client. 
    4. Clearly documents the roles and responsibilities for the client and the MSP.
    5. Accurately represents the clients' existing environment demonstrating the MSP's knowledge of their business. 
    6. Defines environmental prerequisites that are required for service.
    7. Establishes a baseline environment that will quantify and demonstrate the value of the managed IT services to improve the organization’s overall performance.

    Extracting the Value of Managed Services Compared to Price

    When evaluating how services offered compare to the price proposed, the following list of services and definitions show what a solid managed services agreement should include as well what you need to look for to determine if the proposed managed IT services meet the needs of your company. Only then can you truly examine the price value for cost savings. 

    1. Services: Knowing the services the MSP is capable of providing and their level of expertise will be the baseline of what to look for in the MSA. The following services should be available if the coverage is to be able to be of value:

    • Proactive technology management approach: This should take place via centralized services for security. Items that should be included are patch management, anti- spyware and malware management, spam management, desktop/laptop optimization, documentation, email management, voice services and data backup administration.
    • Network administration: This should include network monitoring by a dedicated network administrator for a technology checklist, best practices and a centralized service report review.
    • Dedicated Account Management: Having rotating technicians can do more harm than good. Be sure the MSP provides a dedicated team, including a Technology Account Manager that will know your business, processes, and common IT issues well.
    • Strategic planning/budgetary considerations: It is important to have strategic technology planning for the future. Verify that through your dedicated Technology Account Manager, you receive technology consulting and a fractional Chief Information Officer delivering a technology roadmap and regularly scheduled network checkup visits.
    • Support services: Support shouldn't be a hand off or inaccessible. Solid support means there is an internal client end-user support desk team that includes help desk support, on-site support, problem identification and resolution, knowledge base, as well as client portal and mobility support.
    • Are services scalable: The agreement should include a clause that explains that services are scalable if your organization grows or right sizes. This should not be rigid.

    2. Responsibilities: There should be a a clear definition that explains what the MSP is responsible for covering. Be sure to review for any limitations of coverage. For instance, willful destruction of property would not be covered, but is normal wear and tear covered?

    3. Availability: This defines the availability of the MSP and can ultimately tell you what a minimum downtime per month would look like. It’s important to understand what is being provided.

    4. Operation: The MSP’s support and escalation procedures should be explained, as well as the policy for providing service outside normal coverage hours.

    5. Guaranteed Response: How quickly can you expect to hear back from the MSP after reporting an issue? This goes beyond just normal business hours. It should include terms for after-hours, weekends, and holidays as well. If you have a response time guarantee of 24 hours, is that in-line with your company's structure and needs?

    6. Resolution: This defines the reasonable resolution window that the MSP will commit to for addressing issues. Keep in mind that response and resolution are not the same thing. Your MSP may respond quickly, but it’s not always possible to resolve issues right away and it is important to see this defined in the MSA.

    7. System Requirements: This will define the minimum standards the environment must meet in order to qualify for services. Make sure there is no language that requires upgrades after you sign on. Know where you are now and that the MSP accepts your environment and that it qualifies for service.

    8. Reporting: The data provided in the reporting by MSP will ultimately clearly justify the value of your IT services investment. The reports should be at an established schedule, easy to read, and measure KPIs such as total downtime, average response time, IT tickets resolved, and total support calls. The reports should also detail the issues that were addressed, the maintenance completed for the time period, and a current statement on the health of your network.  

    Conclusion

    With the above core essentials to managed IT services clearly defined, the MSA becomes an instrument by which to measure what you are receiving for your spend. If the agreement shows that the MSP will fill the gaps in your business that you need, can provide the solutions at a price showing there can be a realized savings, and provides the evidence that the MSP will be a partner to your business' success--then the value will evident.

    It goes well beyond getting the cheapest price as there are no bragging rights if you are not leveraging your resources and seeing a benefit to your business. Understanding what your company needs will be the guiding light as to whether the MSP is the right solution partner for your managed IT support services needs and you will be able to identify what is missing or any holes with a thorough review of the managed services agreement to ultimately see the real value.   

    Download our FREE Business Guide to Managed Services eBook for a comparison of IT management models and use the included checklist to assess your company's current IT performance.
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