A Managed Services Provider (MPS) is an organisation that manages technology products and services for other businesses; the potential source of a great deal of frustration or peace of mind, depending on the vendor you choose.
Managed Service Providers have an economy of scale on their side, allowing them to charge less for essential IT services while offering a wide range of expertise. Of course, that’s assuming that you’ve hired a good one. The wrong Managed Service Provider can result in poor communication, network downtime, lack of follow-through and general mistrust all around. And with your technology on the line, a brush with a bad vendor can cost you.
It feels like the term ‘managed service provider‘ (Managed Service Provider) has been around since the beginning of computer technology. In a nutshell, a managed service provider is a company which can be outsourced to manage some part or all of an organisation’s IT platform.
Before Managed Service Providers became the norm, companies predominantly worked around a break-fix model of outsourcing when an issue couldn’t be handled in-house; however, over time, the market demanded more proactive solutions. Managed Service Providers filled this gap by offering services around monitoring equipment and identifying future issues.
Like practically everything that relates to technology, Managed Service Providers have had to function in a state of flux, meaning that they have had to evolve through the years to avoid irrelevance.
The advent of cloud computing, for example, has added a great deal of complexity and challenges to the mix as Managed Service Providers now need to find ways to maintain complex hybrid environments. This has also given them great opportunities to grow cloud-based offerings, like cloud-based backup and disaster recovery.
With so many different types of providers offering such a wide range of services, making a decision can be challenging.
What is Managed IT?
A managed IT service is an information technology (IT) task provided by a third-party contractor and delivered to a customer.
In a managed service arrangement, the managed service provider retains responsibility for the functionality of the IT service and equipment, and the customer typically pays a monthly fee for receipt of the service. There are many different types of managed IT service offerings. Still, the idea behind all of them is to transfer the burden of maintaining IT from the customer to a service provider. In an effective managed services relationship, a customer benefits from predictable pricing and the ability to focus on core business concerns rather than IT management chores.
Managed IT services allow businesses to delegate their IT operations to an expert third-party organisation that specialises in handling these responsibilities. These third-party organisations, known as Managed Service Providers (Managed Service Providers), are responsible for the entirety or portions of a business’ IT systems, as agreed upon in a Service Level Agreement (SLA). The client typically procures IT equipment and depending on the SLA, Managed Service Providers may provide round-the-clock monitoring, issue resolution and reporting, and more.
According to the SLA, managed service providers charge a flat fee for delivery of their services over a set time. The SLA defines precisely what services will be furnished and the degree they will be offered, as well as metrics for measuring the success of these services.
Cloud computing has allowed managed IT services to expand beyond the regions and borders that would constrain the average break/fix IT through the adoption of Software as a Service (SaaS) technologies, as well as Infrastructure as a Service (IaaS) and Platform as a Service(PaaS) also. These capabilities allow managed IT services to scale at a rate dramatically larger and faster than in-house IT operation or break/fix providers.
It is now a common trend in the enterprise world to undergo a digital transformation doctrine, whereby old and onsite hardware and infrastructure get replaced with digital systems and services.
But moving from old to new systems and IT operations can be a daunting task. There are numerous advantages but to get the most out of digital transformation, IT leaders and teams need to have a very careful and considered approach, which can be time-consuming and require a lot of ongoing work post-transformation.
This is why managed services have ballooned in popularity, with some two-thirds of businesses now partnered with at least one managed service provider. Such external firms can work with the client enterprise to ensure their new digital services and infrastructure are running smoothly and effectively for their business operations.
The overall idea is that a managed service provider takes care of all the maintenance and day-to-day running of such systems and services. This will free up time for an in-house IT team to explore new ways in which technology can benefit a company’s daily operations and potentially boost its bottom line.
It aligns the outcomes of the organisation. An IT company is incentivised to do an excellent job; they want to minimise problems for your organisation because they have KPIs directly linked to the efficiency of your IT.
IT experts give you peace of mind
You’re not an IT expert. Managed service providers take care of your IT, so you can focus on running your business.
Managed services offer proactive support. So instead of your IT firm always fixing problems, they will actually try to identify issues before they happen, keeping your systems up and your problems down.
Strategic IT planning
What IT systems do you need in 12 or 24 months? Managed services help you think ahead and give you advice on what you need to be planning from an IT department. This links to proactive support and ensures that your IT infrastructure and software is upgraded and updated to minimise risks such as downtime, viruses and crashes.
Complete outsourced IT
Managed services give you access to a complete IT department. You don’t just get day-to-day IT support; you also get an IT manager and a virtual CIO so you can think strategically about how IT fits into your organisation.
Why do we need managed services?
Computer networks are more powerful, efficient, but more complicated than ever. Every small business has multiple computers, mobile devices, and critical business applications running on cloud services. While computers provide a platform for intelligent business operations, it also creates access points for hackers to try and to get into your network. Information security should be a primary concern. A business computing network requires full-time attention, but can your organisation afford an IT manager, let alone an IT team?
Fortunately, there’s a more cost-effective approach. A managed service provider can handle all aspects of your network maintenance for a fixed monthly rate. With a Managed Service Provider, you get the reliability and security which a full-time IT staff provides at a fraction of the cost.
Both small, medium and large businesses are becoming acutely aware of the reasons to choose the managed-services business model, and the demand is strong. Here’s an outline of some of the reasons why your business should choose IT managed-services.
Why is technical expertise important in choosing a managed service provider?
As the person responsible for IT, your job is to take a strategic view of your IT environment and map technology investments to business goals. Managed Service Providers can be invaluable at helping you succeed in this role. On the one hand, they take the hassle of managing basic infrastructure off your plate. On the other hand, a leading Managed Service Provider will have technical specialists on staff who can act as part of your team when you need advanced or specialised knowledge that your staff doesn’t possess. Collaborating with a Managed Service Provider is a way to both efficiently and cost-effectively augment your team’s skills with deep expertise in security, networking, or communications, without increasing payroll.
Expanding on bringing Managed Service Providers into staff meetings, IT companies need to make sure they are getting the most out of their services.
If you look around at the market, the expertise offered by Managed Service Providers has expanded dramatically through the years, such as data analytics, business intelligence (BI) and advanced application monitoring.
The right managed services provider will sit down with you and assist in your technology planning for the future. Look for their advice and expertise to assist you with yearly planning and look for ways for you to save money and improve efficiency on technology that will help your company grow to the next level. Make sure your managed services provider is forward-thinking and looks out for your interests.
Industry Relevant Managed IT Service Provider
Most IT professionals will be excited to face a new challenge, but it is best for your business if your managed service provider has real experience working in your industry. If you run a restaurant, then an IT expert with foodservice industry experience will be able to serve you much better than one who has primarily worked with accounting firms. Industry experience ensures your managed service provider will be able to foresee potential problems and also anticipate your operational needs.
OK, so they’re offering some great sounding solutions, but what level of expertise do they have with these applications and partners? Are they an Amazon Web Services certified partner for instance, and what other certifications and qualifications can they show you?
When trying to gauge these criteria, take a look at the personnel working at the Managed Service Provider. After looking at the expertise and experience of each employee, partner, and founder – gauge the company holistically, to measure what their weaknesses and strengths are.
Don’t be afraid to ask questions to gain further insight into this important factor to consider. A Managed Service Provider is only as good as the people who are working in it.
The most advanced technology
The reason that Managed Service Providers can offer you such sophisticated services at such competitive rates is that they’ve leveraged their investment in advanced technologies—and in training for their staff—over a large number of customers. By taking advantage of this shared model, you get the latest technology and most sophisticated IT talent available without having to make those investments yourself. And when it’s time for an upgrade, you no longer bear the expense and the pain—all of that is handled behind the scenes by your Managed Service Provider.
How flexible should be a managed service provider?
The Managed Service Provider should understand your unique service needs rather than just offering cookie-cutter solutions. You should have your choice of data plans, telephony options, and business applications, as well as flexibility as to deciding on what hardware is installed in your office. And, as your requirements change, the Managed Service Provider can scale either up or down as needed.
Make sure that you have options to choose among private, public and hybrid cloud solutions for data, voice, infrastructure and applications. And you should be able to choose the level of service you want from your Managed Service Provider: whether consultation-only services for planning purposes, management of existing onsite equipment you own, or fully hosted solutions that supplement or replace existing systems’ assets.
Involve Your Managed IT Service Provider in Staff Meetings
Just because a managed service provider is outsourced, it does not mean they should act like they are. In this day and age, it is common for Managed Service Providers to sit in on staff meetings, not only to keep in line with the strategy but to contribute and share experiences. Given the apparent benefits, CTOs mustn’t be afraid to push the dynamic of the relationship in their favour.
Despite the technicality of being separate organisations, if something needs to get done working as a team is the best way to do it. After all, if you’re using Managed Service Providers to deliver things that are mission-critical to your enterprise and it goes down, it’s still your job at risk.
Business needs to change quickly, and technology changes even quicker. You need a Managed Service Provider that has the flexibility to take on additional projects and services as needed, as well as the ability to guide you as you consider new technologies.
While you probably do not want your company to be the guinea pig that discovers all of the bugs in the latest technology, you also do not want to fall behind. Offering the latest services and adopting new technology early on will ultimately give your business an edge over its competition. A managed service provider who stays on top of the latest innovations and offers the most advanced options in IT will ensure your company remains contemporary, functional, and relevant.
What should be the infrastructure services of a Managed Service Provider?
Your Managed Service Provider should provide more than essential infrastructure services. It should offer you the option of subscribing to business services that run on top of the network—services such as collaboration tools, email, and remote data backup. After all, these services are just as essential to running your business as infrastructure components—and can be easily managed remotely at a cost that is probably lower than if you tried to do it all yourself.
Your Managed Service Provider should make infrastructure management invisible to your users. Rather than reacting to them complaining when something breaks, a top-line Managed Service Provider will automate IT management as much as possible to avoid problems from occurring in the first place. For example, your Managed Service Provider should detect bottlenecks in your network long before users report slow system response times. And if an issue does occur, your Managed Service Provider should have an automated response to resolve it as quickly as possible. Also, your Managed Service Provider should make you aware of any issues that arise before they impact your users.
At a busy, growing company, often the temptation is only to fix technology when it is not working. A managed services partner will make sure you are proactively running the updates you need now to avoid problems later.
Third-party Vendor Partnerships
An advantage of using a managed services provider is that they can handle technology vendors for you, saving you the time of tracking down multiple vendors for service and support. When evaluating a provider, look at who they partner with and make sure they have expertise on the tools you use.
You should have complete visibility into your IT environment through a web-based customer portal that provides a centralised management dashboard. You should know at a glance what has been done to your IT infrastructure, as well as what is currently being worked on, and what still needs to be accomplished. Additionally, you should also be able to both view your IT environment from a high level and drill down into individual components to see how they are functioning. Not incidentally, you should also be able to run reports on your IT infrastructure to help you with long-term IT planning.
How should a Managed Service Provider respond?
The Managed Service Provider should support and proactively monitor its data, voice, and security services on a 24/7/365 basis. Although this should primarily be done remotely—meaning you won’t have to wait for a technician to come to your office should something go wrong—the Managed Service Provider should also offer prompt onsite servicing for those things that can’t be diagnosed and fixed from a distance.
In the midst of an IT emergency, you don’t want to be wondering if your vendor’s help desk will really have your back.
Find out how IT support is managed
Are support team members outsourced? Is support online 24/7? How do you get in touch when you need something? Answering these questions will give you a true sense of the Managed Service Provider’s disaster response abilities.
You don’t work 24 hours a day, but your computer network needs to, and so does your IT provider. When choosing any managed services offering, you must make sure your provider is available to you 24 hours a day, seven days a week, 365 days a year. Your business depends on it.
A managed service provider should be able to give you an upfront estimate of response times in any given situation. This will provide you with a good idea of the time it will take to fix problems which arise in the future.
Many times technical support issues are what drive businesses to a new Managed Service Provider in the first place. The headaches of downtime, coupled with security threats and slow response from existing support, make outsourcing the IT department and gaining cloud computing capabilities very alluring. Thus, businesses are laboriously searching around seeking the right provider for them.
Do Your Research
Check out the Managed Service Provider’s technical support promises and options within their services. For example, do they offer a guaranteed response time for service requests? Do they rank customer satisfaction through continuous surveys? How do they cover after-hours support? Are they available to handle emergency requests 24/7/365?
Then check out what past clients say about them, concerning their technical support abilities. Ask them direct questions about how they plan to provide technical support and the price structure around it. This should give you a good picture of what sort of Managed Service Provider you’re choosing.
Why is it important for a Managed Service Provider to have financial stability?
As with any vendor, you should check out the financial strength of the Managed Service Provider. The last thing you want is to have to go through the selection and provisioning process all over again. Choose a Managed Service Provider that’s going to be around for the long term.
You want to select a managed service provider who will be around as long as your company (hopefully forever). You can verify a provider’s history by searching for press releases, asking for financial statements, or checking with references.
Why do I need to consider business-class service level agreements (SLAs) in choosing a managed service provider?
A Managed Service Provider’s SLA tells you how successful they are at maintaining the system and network availability. These SLAs should be quantitatively measurable and easy to understand. To make sure that SLAs have some teeth in them, leading Managed Service Providers will have triggers and penalties built into your contract so that you get customer credits if SLAs are missed. However, leading Managed Service Providers will rarely miss their SLAs.
Whatever expectations you set for an Managed Service Provider, the best way to assess their commitment is to look at their service level agreement (SLA). The SLA sets out what the vendor will provide. If the vendor is unable to meet their obligations, the SLA will also offer a customer with recourse.
Service level agreements vary on a case by case basis. However, typical components usually contain:
- Warranties: These agreements should spell out legal fine points, such as compensation policies.
- Client Duties: It’s common that Managed Service Provider users also agree to a code of conduct.
- Procedures for when problems arise: This should cover how problems are reported as well as distinguishing the various levels of severity of different problems. It should also indicate the Managed Service Providers response time.
- Performance agreement: Typically, an SLA should outline what metrics will be used to quantify and report on service levels.
- Termination: The agreement must specify under which circumstances the Managed Service Provider or client can end the relationship.
Chief Technology Officers should use the contracting process to build an understanding of what they want from their Managed Service Provider. By setting clear expectations in black and white, clients can allow providers to build an understanding of their duties.
Be sure your provider offers a contract and list of services which covers the entire scope of your company’s needs, including computers, laptops, phones, tablets, payment systems, and even cloud computing. You do not want to get stuck in a contract with a company that cannot handle the entire job.
What are the pricing models for managed service providers?
To differentiate themselves in a crowded marketplace, suppliers offer a diverse range of payment models, below is a quick explanation of some of the popular ones:
- Per-device monitoring: Customers are billed a flat fee for monitoring selected devices, for example, mobile devices and desktop systems. This is a very common payment structure, mainly because it offers predictability and flexibility as you can scale up and down the number of devices as needed. One drawback with this structure is that it can get expensive as the number of devices used by workers multiplies.
- Per-user: This model is similar to the per-device pricing model, the difference being that the flat fee is billed per end-user on a monthly basis. This will cover support for all devices used by each user.
- Tiered pricing: This is perhaps one of the most popular pricing models. Essentially, the service offered will have different price points. The more you spend on a service package, the more services you get.
- Value-based pricing: This revolves around setting the price of a product or service based on the economic value it offers to customers. If a company wants to do this, they need to be certain what value means to them.
The way provider bills will affect more than your accounts payable; it can also reveal the quality of the company’s integrity. Avoid those who strictly charge by the hour, looking instead for providers who charge flat fees for certain services. For these managed service providers, doing the job right the first time is mutually beneficial.
How do I look for the best security in choosing a managed service provider?
Last but not least, ask the Managed Service Providers you are considering for their security certifications and their ability to meet HIPAA, PCI or other qualifications that help you comply with regulatory and industry statutes.
One of the areas the lack of available skills is hurting the most is in cybersecurity. This is why many organisations are looking for managed service providers to help prevent and counter threats.
When it comes to having the talent to keep up with the security landscape, some providers are better than others. According to their research, most providers are following standard recruiting and retention best practices, while others are taking more creative approaches to ensure that they have enough talent to serve clients and mitigate future risks.
Another thing that customers are pushing for from their Managed Service Provider is that they take on responsibility for regulatory compliance, such as the General Data Protection Regulation.
However, Chief Technology Officer’s regulatory compliance is a critical issue across most industries, especially if engineers will be working with confidential data.
When it comes to security and regulatory compliance, the best thing you can do is to ask if the Managed Service Provider has undergone a third-party accreditation. You should also ask if the Managed Service Provider has adopted any business continuity standards.
A good managed services firm will help protect your network from cyber-criminals and hackers. Make sure that your plan includes regular security testing and monitoring for attacks.
Whether it is improving efficiency by saving time, saving money on problems before they occur, or avoiding costly disasters and repairs, a managed services provider can bring great value to your business and improve your bottom line. Finding a true partner to look out for your technology needs will help your business grow to the next level.
It might sound contrary, but keeping IT infrastructure management in-house often prevents you from focusing on important IT issues. The right Managed Service Provider can free you up to do what you’re best at strategizing on what technology investments will best advance the business. You get a true partner in IT for the long haul as well. By considering all the above characteristics, and choosing wisely, you could achieve much more than if you go it alone.
When choosing an Managed Service Provider, considering these factors will help ensure a good fit for your business. Remember, not all Managed Service Providers are the same, and you should heavily vet them to find one that speaks your language and connects with your ideals. This way, when problem-solving occurs, a profitable relationship will be formed. This relationship should have mutual respect and consideration for the success of both.