Rajeev Tyagi
For most customers, the goal of hiring an managed services provider (MSP) is to free up internal resources to drive digital innovation and business value, saving and reallocating capital, and swift access to best practices and a skilled workforce to accelerate time-to-value. The following 6 tips and their associated considerations should be taken into account while keeping these fundamental goals in mind.
1. Foster the spirit of partnership.
- Technology is easy; working with people is complex. The key to success with your MSP is building a strong partnership between both teams. Treat them as a partner and not as a vendor. MSP should be viewed as an extension of your team, not a third-party provider. The most successful engagements with MSP are led by customers who are heavily invested in the success of their partners. A customer once told me, at the start of the new engagement: “I will consider it to be my personal failure if you fail.” Unsurprisingly, after seven years, they continue to be one of our largest and happiest customers.
- Embrace the change and create a collaborative environment that welcomes the full potential of the MSP’s solution and capabilities. Leaders are relentless about explaining the benefits of change to their organization and create the environment where the MSP is invited to propose advanced technologies and industry best practices to improve quality, customer experience, speed to market and gain competitive advantage.
- Always find a win-win scenario. A relationship is all about give and take. MSP agreements are usually written for multiple years. The business and the market is constantly changing during this time. Flexibility from both partners will help build successful and long-lasting relationships.
2. Don't lose site of frequent communication.
- Frequently communicate your business goals to your MSP as a fundamental part of the approach, so they can align to support them.
- Realign IT services from tower-based to product-based, keeping the business priorities in mind. Align the governance so as to make the provider’s work measurable and related to your satisfaction and growth.
- In an ever-evolving business environment, encourage adoption of continuous delivery and a continuous improvement mindset to drive positive business outcomes.
- Re-invest the efficiency and productivity gains from MSP into impactful business transformation projects like Digital.
3. Do your due diligence.
- If you find yourself reviewing your contract often, you are already in trouble. However, it is crucial that you have a well-documented and well-understood scope of services, including a clear RACI Matrix. This is especially important in a complex multi-vendor MSP environment.
- Define and monitor performance metrics to ensure value delivery, using effective, digital, and real-time governance.
- Utilize industry benchmarks to see how your relationship and its value compares to the top quartile of the benchmark.
- Ensure that your security and compliance procedures are being strictly followed; Do periodic third-party assessments to mitigate risk.
4. Focus on the people.
- Make sure you interview and frequently meet with the MSP’s top management/key personnel.
- Create a framework for quick, constant, and effective communication between the teams.
- Reward the top performing partners with emotional equity. Some of our customers have awards meant to identify and recognize outstanding work by their MSP personnel. While this doesn’t replace the formal governance, it drives engagement to new heights, signaling that outstanding work doesn’t go unnoticed.
This approach is effective because it allows an MSP to further your company’s goals from a business perspective, not just from a technology perspective. It will ensure you are not missing out on cost savings, access to innovation, compliance, deliverables, and obligations. With the spirit of partnership, open communication and collaboration, both parties can prioritize business initiatives, improvement, and risk areas to yield the most value.
Yet, perhaps the most important feature here is that it builds trust amongst the team at a personal level. As I said, technology is easy, working with people that trust each other is what enables the team to thrive. MSPs make significant investments to drive innovation, leverage technology and implement best practices: make the most of those assets.
5. Look for cultural fit.
The most important attribute to look for in an MSP is cultural fit. It will be easier to integrate the MSP into your team if both parties “mesh well.” Communication is stronger, the work environment is more collaborative, and everything is faster and easier, which in turn helps everyone focus on the business goals.
RFPs (Request for Proposals) will help the client evaluate tangible aspects of their potential providers: certifications, scale, financial strength, etc. these are elements that can be evaluated in an analytical way. But it’s the traditions, the organizational environment, the culture of the partner and how it fits with the client, that will determine the long-term success of the relationship.
Cultural fit is important as you cannot fit a square peg in a round hole. It is based on the alignment of values, beliefs, and behaviors between the customer and MSP. For example, it is good to have the customer and the MSP share a similar mindset of adoption of new technologies, in terms of innovators to laggards’ scale. Conversely, if the customer is not open to experimenting with new technologies, is typically late in adoption, they may not allow the MSP to implement the full extent of their solution or vice-versa.
Cultural fit is what will determine success when things don’t go as planned. Whether it’s for internal aspects, or external factors, like a pandemic, that requires the partnership to go off the script and find the best way to bring the partnership forward.
6. Negotiate contract considering a healthy risk-reward framework.
A good contract is flexible, transparent, and mutually beneficial, one that promotes a risk-reward framework. A managed services provider should be incentivized to drive better performance and outcomes. Likewise, they should be penalized for poor performance. Finding this win-win balance is essential; a provider with healthy margins will be more flexible to adapt to changing business needs. Over-negotiating may deliver a better price, but it often comes at the expense of reduced value and flexibility.
SLAs are an important operational metric to keep under control as a hygiene factor; but we find what's more relevant is alignment to the expected business outcomes and definition of success of the different stakeholders so that we can make better joint decisions when decisions need to be made and priorities considered.
