Michael’s MSP Rant
It seems like the entire IT industry is talking about (and promoting and selling) “Managed Services”. The idea that for one (1), “low”, fixed monthly price, all of your IT woes go away.
Outsourcing your IT to an MSP isn't “always” a bad idea; It’s just “mostly” a bad idea.
The supposed list of “benefits” reads like;
Knowing your monthly IT bill in advance, will allow you to budget reliably
There is an “all you can eat” option, call us for everything/anything
Your IT will finally do what you want it to do
We will manage everything in the background
Something about “reliability….”
Everyone is doing it
As your MSP (“Managed Service Provider”), having predictable income allows us to hire the perfect people to manage your IT
Blah, blah, blah...etc, etc, etc.
Sounds great right? But, you’re gut instinct is “Wow! This sounds to good to be true.”.
Odds are, you’re right. It is to good to be true. And while not always a bad idea, it’s a bad idea, most of the time (and we will get to when it actually works below)…
Perhaps your unhappy with your current IT solutions or maybe you’ve been approach by someone promising to make things better. Maybe it is the cost of hiring. Maybe it just doesn’t feel like your getting the value of the dollars spent. Maybe you’ve heard about Managed Services, and your just MSP curious.
So what’s the catch?
In actually, you’ve inadvertently financial motivating someone to NOT service your business.
What?
The math looks like this;
They promise the moon, AND give you a great (lower?) predictable price. That is what starts the cycle (see below).
They spend some number of hours at your site “loading agents”, “upgrading your anti-virus” software, patching servers, changing equipment to “there solution”, labeling things, and leaving you with a sense of value for your money.
As expected, they send you the bill, and you happily pay them, month after month.
Then, what starts out as apparently great service, starts to slowly turn.
Why? Think about it this way;
They have your money. They have your money this month, and next month, and the next month.
Replacing them means
finding someone else (your time)
the new persons implementing there solution (the entire companies time and money)
If the MSP did little (or nothing), they still get the monthly service fee. 100% profit (minus what they pay for those agents they loaded)
Worse still (it gets worse?), EVERYTHING they do;
answering the phone
replying to an email
sending someone to your office
spending time fixing a problem, etc.
ALL OF IT, eats into what would otherwise be 100% profit for the MSP.
In effect, you’ve paid someone to NOT service your business
In this relationship, you have incentivized them to do the least amount of work possible;
If they ignore the problem, and your staff “work around it”, they make (rather, get to keep) more money
After your on-boarded, “support” might be outsourced to another company (and often another country)!. They make more money
They wait till is gets bad enough that a “special project” is needed to fix it? They make more money.
Getting the picture?
So, since the service isn’t what it used to be, and you’re back to spending a fortune, you go looking for a new (and often cheaper) MSP. More of your time and money.
So the next MSP comes along, and they would “be very happy to charge less”; for also doing nothing, and ultimately the same (terrible) result.
This leads to either a high-turnover or a putting up with, “race to the bottom”. Who can sell it (and not deliver it) cheaper
“Ouch! Thanks Michael, is there any good news?”
I’m glad you asked, and “Yeah, some good-ish news...”
I’ve actually worked with, and client’s have found, the “MSP Right-size-sweet-spot”.
The MSP “sweet spot” is an MSP who has grown enough (but not to big) to have dedicated, properly utilized, not over or under worked staff for particular IT roles. People are challenged, and winning is possible. The right amount of staff, such that the MSP doesn’t have a microscope on expenses, they pay for top people, the work gets done, and the team delivers reliably.
For example, they have a full time person whose sole mission and focus in life is desktop optimization (patching, tuning, software delivery, documentation for other staff, etc)
“So, how do I find such an MSP”
I’ve hired (and/or worked with) a few GREAT MSPs over the last 5 years, and here is what they mostly have in common for staffing;
2 or 3 “helpdesk” / Tier I administrators
2 Tier II IT Administrators
2 Tier III IT Administrators / special projects
1 or 2 Network / WiFi specialist
2 Sales people / account managers
1 project manager
Optional “Mobile phone” expert
Optional “Web site creator/administrator”
Larger than this, and you become a small fish. Smaller than this, and they don’t reliably deliver.
How to select a good MSP
Ask where there help desk is based out of. Make sure it is US based.
insist in the contract that if the MSPs staff becomes outsourced (another company or off-shore) you have a no penalty cancellation clause
Insist that they store system passwords in such a way that you always have access (“you can always just call us..” doesn’t cut it).
Ask for “the” phone number you’ll be calling for support, BEFORE you sign up. Not the salesman's phone number. Not the “on boarding team” phone number. “The” support phone number. The one you’re to call after you’ve been on-boarded. If they aren’t willing to share it, then don’t share you dollars.
When they do share the “support” number, make a few test calls.
See what the response time is (number of rings).
Confirm if this is the support number for company “X”.
Ask the person who answers how long have they been with company X
Ask the person where they are working from. Which state?
How long have they been in IT?
How do they react to someones call that they cant find in there database?
Politely thank them for there time.
Make certain your clear what is/isnt in the MSPs deliverables
Ask for an annual estimated “Out of contract” work to be done, for both “on-boarding” and an ongoing annual “project” budget
Personally, having experimented with offering MSP solutions, and at the end of the day, I don’t offer MSP solutions. The field is crowded, with a lot of bad apples messing it all up, and, suprisingly, I find it more cost effective for the client to hire someone who is great at what they do, and capable of letting the customer know if/when they are not.
So don't overlook the old fashioned way, of hiring someone hourly. If they don’t get the work done. Fire them. Get another, and repeat until you find the right one. After all, not only is that cheaper, it might require less time (and fewer headaches) than you’d have spent going through multiple MSPs in a race to the bottom.