The key components in a modern Managed Services business

You can’t be half-pregnant. The state of pregnancy is binary. You are pregnant – or you are not. I would like to say that the same is true with Managed Services businesses. You either have a Managed Services business model or you don’t. Unfortunately, in approximately forty percent of businesses that I work with, they see themselves as having a Managed Services business model when the reality is they have a break/fix business with one or two components of a true Managed Services business model. I don’t consider these businesses have actually made the transition and should not call themselves an MSP. In fact, most examples I see have a break/fix model with a block of hours sold to the client. This is still a reactive business model that rewards the IT Provider who creates an intrinsically poor network and it creates client frustration and annoyance.

In my opinion, there are five key attributes in a modern MSP.

First, hours no longer exist. All work to be performed must be performed under a Fixed Price Policy. Gone are the open-ended chargeable hours that reward slow work and gives clients heart palpitations from the resultant bill shock. In its place is a fixed price to perform fixed work. This is not always easy but the modern consumer expects to know how much they are going to pay for something BEFORE they buy it.

Second, all work is based on outcomes. If you make a promise to perform a certain job and you will charge a certain price for it, then you have effectively have a contract in place (be it verbal or written). If you don’t perform your part of the contract (complete the job) then it is unreasonable for you to charge for the work. It puts the emphasis on your technician to complete the work rather than just spend time on it. If that feels like too much pressure on one of your technicians in our modern world of ‘every player wins a prize’ then find some technicians with a better attitude.

Third, you need a very simple formulaic method of quoting an SLA to a client. I had a rule of thumb that said that ANY staff member should be able to quote an SLA to ANY client within ten minutes. I would recommend ten to fifteen key variables in your quoting tool which would allow for the key components to be entered which would deliver a consistent and quick price. If you need to talk to the client and go away and come back with a quote several days later, you have lost the opportunity. I would typically create a quote for a client while I was sitting in front of them and, in most cases, the client would be signed up before I left the meeting.

Next you need a money-back guarantee. This is a way of ensuring there is accountability by your organization and staff. If you fail to deliver on response times or if you miss a scheduled visit then you will give them a refund of a percentage of their monthly fee (I usually work on five percent). This shows unbelievable commitment to your clients (and scares the pants off your staff).

Last, a modern Managed Services business model needs to include compulsory proactive maintenance and consultancy. From a technical viewpoint, you are putting your reputation on the line so you need to ensure that the network is being maintained and running at its peak. From a relationship perspective, you need to sit down for a general IT discussion on a regular basis. I would recommend at least once a quarter (after 90 days, clients forget who you are). The beauty of the general IT discussion is that just having a meeting will generate sales leads every time. It is impossible to talk about IT without talking about some new products. These ongoing relationship talks are vital to the continuing rapport, you build them into the price of your offering but, more than likely, you will walk away from each one with additional sales. It doesn’t get much better!

There you have it – the five key elements of a modern SLA.

Tell me if you think I have lost the plot on these ideas or if I have left out some crucial elements at [email protected]

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