The Definitive Guide to IT Managed Services
Edition 1 – November 2018

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Chapter 5

Securing the Contract and Internal Readiness

When it comes to drawing up a contract make sure you consider the following essential factors:
• Reporting on service delivery
• SLAs that meet your operational priorities

And don’t forget to prepare your business for the cultural and operational changes that outsourcing services cause.

Contract negotiations can be like pulling teeth as both parties try to get the best deal possible. Back-and-forth discussions are undoubtedly important – just don’t let them drag on too long or you immediately begin eating into potential savings.

Once you have identified a potential MSP partner, you need to get specific.

The contract – what to look for
Every MSP contract is slightly different, but an effective one that delivers what you need should address all of the following issues.

Unless you experience a major infrastructure failure, the majority of the MSP’s work will be conducted behind the scenes. But “out of sight, out of mind” will not satisfy your stakeholders.

Your MSP must provide activity reports to show how they have been performing against agreed SLAs (see below). You should also request regular reports that help you calculate the value of the service received.
Suggestions include:
• Calls logged, tickets closed and on-hold.
• Performance against SLAs – response and fix times.
• Performance of the managed infrastructure.
• Other activities completed (software updated, security fixes applied etc).
• Capacity utilisation to provide early warning of resource issues that will require additional funding or upgrades.

You should also encourage your MSP to submit strategic recommendations on a regular basis.

An MSP will generally offer a standard service level; a four-hour window to fix general support issues for instance. But these SLAs are open to negotiation according to your operating requirements and strategic importance of the system in question.

The specifics of the SLA will vary between organisations. It is not uncommon to have a 15-minute response to incoming calls for support, and a 4-hour fix time for instance. Obviously, the quicker you require response/resolution, the more expensive the contract becomes – especially if you want on-site support included.

Before approaching an MSP you should seriously consider the service you are handing over to your MSP, its importance to your operations, and the maximum time you can tolerate an outage for. You are then prepared to negotiate the specific terms of your SLAs.

Other things to discuss when negotiating your contract include your contract period (I, 2, or 3 years), a termination clause, penalties for poor performance and service credits for failing to comply with SLAs

Preparing your business for change
Working with an MSP will require a cultural change in the way users view and consume IT. This is a key message to communicate to the business before transition. You (and your employees) must accept two key facts:
1. Initial response times will be slower than when the service was managed in house.
2. Staff may have to play an increased role in troubleshooting and resolving issues as most support will be provided remotely.

For the end user, these changes will be seen as a negative – despite the fact that the MSP will resolve issues just as quickly as before. It is down to your organisation to explain the reason for the change – to save money and prepare for the future. You will also be responsible for enacting the cultural change required to make the outsourcing a success.

The earlier you can address the cultural issues, the sooner you can begin the technical process of transition. Again, delineating responsibilities between you and your MSP will be crucial, ensuring that everyone know what is happening, who is responsible, and the correct order of events required to complete the move.

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