What is an IT Managed Service Provider and when do I need one?

Whether you are a Digital Transformation Powerhouse, or you provide the best Tree Lopping services in Brisbane, technology is integral to the success of your organisation. This is especially true for Small to Medium Businesses (SMBs) where margins are thin, and people invariably fulfil more than one job role. To keep Small and Medium sized businesses SMBs agile and able to punch above our weight, it’s critical to extract the most out of our technology. One way that owners and managers can do so is to engage the right Managed Service Provider(MSP).

Managed Service Provider IT helpdesk computer

What is a Managed Service Provider?

A Managed Service Provider is a company that gives SMBs the capability to outsource their IT service delivery requirements.  In other words, an MSP is essentially your IT department. If something breaks, they are on the other end of the phone to make things work again. A good MSP will also actively keep an eye on all systems, often proactively resolving issues before they even impact business. A great MSP will invest the time to learn your business deeply enough to make recommendations and actively partner with you on enabling your team to achieve their goals.

When do I need an MSP?

Here are some signs it might be time to investigate whether engaging an MSP would be valuable for your business:

If you don’t have a dedicated IT department or IT staff member:

It’s probably fair to say that there are many SMBs operating with one person wearing a multitude of hats, one being the “IT guy”. The problem with this is that, while this person is probably more tech savvy than the average bear they are probably not up to date with the latest IT developments. It’s probably a significant challenge for this busy person to balance IT needs whilst also remaining productive at their core job. 

You could hire a dedicated IT person (which is undoubtedly a better option than folding IT responsibilities into an existing role within the organisation), but what if your IT person gets sick or needs to take leave?

Instead of hiring a full-time IT staff member, you could consider using an MSP who can give you the benefits of a full IT department at a fraction of the cost. Your employees can focus on your core mission and you can rest easy knowing that your IT demands are being professionally managed. 

If you are experiencing continuous technology headaches:

When the systems we use on a daily basis break down, business owners very quickly realise that the technology powering their business is incredibly complex. If the technology under the bonnet in your business is constantly experiencing problems, there is a good chance that this is significantly impacting your customers' experience and also your bottom line.  

Partnering with a quality MSP can take you from a reactive, painful break-fix cycle to a situation where you are empowered to plan your IT Strategy and benefit from reduced maintenance and replacement costs. A quality MSP will take a proactive approach to the maintenance, patching and monitoring of your technology and make business-focused recommendations on how to improve the business through technology (rather than selling you the latest technology, with its relevance to the business as an afterthought). Proactive is always a better, more economical option than being reactive. 

If your IT Budget is unpredictable:

Even in the most ideal world, it’s a challenge to budget for your IT requirements. Some months you might have to replace a laptop, while others may see you need to stump up for a new server or address a critical security incident that needs to be dealt with immediately. This is an even harder task for small businesses. 

The ability to budget your IT services on a monthly basis makes planning how to spend your valuable dollars much easier. As well as more predictable costs for your services, your systems are actually kept in better working order and will last longer with professional programmed maintenance.

What types of service provider pricing models are available?  

Per Device 

This is a tried and true pricing model where customers are billed a predictable flat fee for the  monitoring and maintenance of specific devices, such as laptop and desktop computers, servers and even mobile devices. The predictability and flexibility of this model is attractive to both customers as well as the MSP. Potential drawbacks could be in situations where customer organisations may have numerous devices used by the same employee. 

Per User

The per-user pricing model is similar to the per-device pricing model, with the difference being that the flat fee is billed per end user per month and covers support for all devices used by each end user. 

Tiered 

The premise of the tiered managed service provider model is to build bundled packages of services, starting from a basic package and becoming increasingly more expensive based on providing more comprehensive services.  Some companies use names like Bronze, Silver and Gold for each level.

As an example, a "Bronze" managed services package may include basic phone and remote support for an entry-level price. Bumping up to the higher priced "Silver" desktop managed services package, which may include proactive patch management and scheduled on-site visits, and the "Gold" package may include around the clock emergency after-hours support. 

All You Can Eat 

Sometimes referred to as "cake" pricing (whereby you buy the entire cake, rather than the individual components of eggs, flour and icing) this model provides a comprehensive service and the MSP essentially becomes the outsourced IT department of the SMB. The comprehensive suite of services is certainly valuable to the customer because it provides specialist industry experience and advice, but it doesn't require the business owner to commit to their own permanent IT department when the business environment and their needs evolve over time.  

How do agreements with MSPs generally work? 

Before embarking on employing the services of a Managed Service Provider, an agreement will generally be drawn up to protect the client and the MSP and ensure clear communication between the stakeholders.

Most MSP agreements will generally answer the following questions:

  • Who 

Who are the parties involved? Of course, there is the MSP and client but are there any other third party entities in the picture?   

  • What 

What services are being provided? What devices are covered? Arguably more importantly, what isn't  covered under the agreement?  What are the expectations in terms of access and resources to facilitate the MSP in being enabled to deliver the required level of service?

  • Where 

Does the provision of services entail remote delivery or are on-site services included as well? If on-site is not covered, what is the hourly rate to do any on-site work? What client locations are included?  

  • When 

What are the hours of operation? What are the Service Level Agreements for response time, resolution?  

  • How  

What is the process for customers to submit a service request? How are issues escalated? What are the terms of payment for the account? 

  • Confidentiality 

Managed Service Providers act as an extension of your business and in the course of the delivery of service they may have access to sensitive and confidential information. Are reasonable steps taken to assure that your valuable data is secure? 

  • Baseline 

Especially important for comprehensive MSP coverage, what are the baseline requirements for devices being covered by an agreement. For example, devices must be under a certain age and covered by manufacturer warranty, external network access must be provided and secured appropriately.  

  • Liability 

Warranties, Disclaimers, Indemnification, Remedies. All of the small print that provides you and the MSP with clarity around where the buck stops. 

What features do I need to look for in Managed Service Provider?

You need an MSP that is up to date with your IT system.

Your Managed Service Provider should be on top of all technological aspects of your infrastructure. They should be able to discern and have a record of which updates need to be implemented, and what hardware needs to be replaced when necessary. They should also have systems in place that ensure the technicians looking after your infrastructure are kept up to date and informed.

You need an MSP that focuses on optimising your technology investment.

Your Managed Service Provider should be consistently evaluating the health of your infrastructure, ensuring that all systems are appropriately patched and secured, validating system utilization, recommending changes and upgrades to software and hardware when needed. They should be offering constant reviews on the overall status of your IT operations to ensure you are match fit. The true value of your MSP will be recognised not only by your technology being maintained at optimal performance and stability, but in enabling and empowering you to focus on your own core business and what really matters.

You need an MSP who works in a strategic partnership with your organisation.

Your Managed Service Provider should want to develop a strategic partnership with your organisation to ensure long term success for your business. An MSP should always have a top-level view of your entire IT infrastructure and how it relates to the operation of your business. In addition, your MSP should be able to respond and react to changing business conditions, and provide consultative advice to IT priorities and challenges that can affect your business even if they’re not currently responsible for it.

In short, a strategic partnership with a quality Managed Service Provider should enable you to plan and budget for your main IT expenses, rather than falling into a costly and unpredictable break-fix cycle. When you find the right MSP to suit your business needs, you will be able to focus on your core business, confident that your IT systems are running smoothly and proactively managed.

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Picture of Gary Titmarsh

Gary is the Client Success Manager at Grassroots IT. He has worked in the IT industry for almost 20 years, in a variety of roles from systems engineer and project manager through to account manager. After gaining vast experience in global organisation IBM, Gary is Six Sigma Green Belt certified and skilled in a variety of Project Management Methodologies including Prince2 and IBM WWPMM. He is fluent in Japanese and enjoys spending time with family in Japan, participating in festivals and playing the Japanese Taiko.

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