Tuesday, May 21, 2013

Trust in your Managed Services but always use an SLA

We're happy to bring you another insightful guest post from MSP owner Brandon Phipps. See his first post on the MSP Builder blog, Managed Services: A Beginner's Introduction. If you are interested in guest posting, please contact us.

I have recently noticed a somewhat troubling trend in the Managed Service Provider community. Purveyors who have been a trusted source for valuable information have started bringing up a stance on service level agreements that goes against everything that I have ever been taught and, more importantly, everything that I have ever learned in the field as a business owner.

I see a disparity developing between organizations that offer Break / Fix services to prospective clients, not so much as a definitive business model, but a method to fulfill the specific needs of a particular client and move them up the ladder of managed service levels and so-called "MSP only" shops that seem to scoff at providers offering the Break / Fix model and businesses that it may be the best fit for.

What's the fit?

I have been in IT for 14 years. I have worked for Fortune 500 companies and billion dollar banks. I have also supported tiny offices throughout Central California that couldn't rub two dimes together to create an IT "budget." Dealing with such a widely diverse corporate culture and coming to understand their specific vision of what IT systems meant to their businesses has allowed me to create a true, custom fit model that satisfies the best interests of the client.

Sometimes that fit is a fully managed, all inclusive package, including security, VoIP, BDR, email hosting, and various other tertiary services. Sometimes it is a client that needs help for one or two things but doesn't see their particular IT needs as being overly demanding and have a built-in wall that insulates them in case their systems go down while also allowing their business to continue moving.

The difference between break/fix and managed clients?

I have learned to value the relationships that I build with businesses and their managers in the community over the monetary value of any particular contract. To that end, the only fundamental difference between a Break / Fix client and one with a fully managed + labor contract is my ability to respond to issues as they arise, incident by incident. For us, the quality is always there and I am always working to show, not tell, the Break / Fix or monitor only clients the added advantage my companies services can bring to theirs.

No SLA, no service.

All of that aside, I always require the client to sign a contract that includes a Service Level Agreement. This typically underscores my ability to respond in a certain time frame to a particular subset of varying issues. There really isn't an inch of daylight between our managed and managed + labor contracts except how projects are defined and what constitutes billable labor. They are all setup with the same RMM package, the same AV and malware packages, the same automation, the same help desk package with a slight variation on times and days a client can expect an agreed upon response time.

We offer free 30 day demos of our RMM / MSP package to new prospects to show them the reporting, etc., and use that to show them where their break and pain points are and how we can help address those. I still require a contract to be in place for this as well.

photo credit: Myxi via photopin cc

One and in?

Every once in awhile I get a call for a one and out. Good business practice says that there is infinite possibility for future business on the phone and all I have to do is address their issue in a timely fashion. The easiest sell in the world is to tell a prospective one and out client what you charge and follow up immediately with, "If I can't fix it, you don't pay."

I have used that method successfully in the past to build up my largest and most profitable account that continues to grow not just my business, but my reputation in the Oil & Gas community, which is our main vertical. Even with the one and out's, I have them sign a work order upon completion. The fine print details their responsibility to pay me within a NET 30 time frame. I have never had an issue with getting paid when doing this. I am also able to take immediate credit card payments through my Intuit Go app on my iPhone.

SLA's: A Necessary Foundation

Contracts and SLA's are in place to define a relationship between business's and to protect each business's interests within the agreement. They define an MSP's responsibilities to their clients and what the client should reasonably expect from the MSP. Contracts and SLA's are not meant to be a pair of sticks by which the client and MSP fence with, but a foundation with which a solid business relationship is built.

The only time that you would not want to have a well-defined contract with well thought out service levels in place is when a client's relationship with your business is considered unimportant and you are not concerned with being paid, nor the aftermath of a potential fallout.

Have all of your contracts thoroughly reviewed by a professional business attorney and make sure that your client fully understands the content and context of each section. This will avoid any number of headaches in the future, trust me.

Maintaining a rigid service structure that fits the MSP's need to streamline operations over the widely varying needs of individual clients is fine if you are very large or very profitable and can afford to say no to prospective clients because they don't fit into your mold. Keeping an open mind about Break / Fix or one and outs, while maintaining a focus on moving the client upward by showing them the value your company brings to theirs will open up new avenues, new markets, and new satisfied clients that can and will refer you to even more business in the future.

Protect your investment.

Never undervalue your services, never undervalue your client relations, and make certain that you never sacrifice quality of service for some perceived value to a rigid delivery model. Protect your business's investment into your clients relationships by always insisting on having a signed agreement in place.

Brandon Phipps is the owner of Second Star Technologies in Bakersfield, CA. You can connect with his company on Twitter, Facebook, LinkedIn, and Google+.