Questions to Ask a Managed Service Provider - Part 2

With more and more managed service providers (MSPs) entering the market, your choices are expanding. If you choose the wrong one, however, you might wind up with more challenges than benefits.

How do you know? According to Matt Cowall at Appia Communications, it’s often as simple as asking.

In part one of this post, we covered three of the top five questions to ask a managed service provider: How long has an MSP been in business? What kind of support does the MSP offer? And what kind of redundancy does the MSP offer?

Today we’ll cover the remaining two questions that Matt recommends you ask, and they’re arguably the two most important:

What quality of service does the MSP provide?
This is probably the most important question, of course. You’ll learn quite a bit about an MSP’s service quality when you check its references. Be sure to ask what happens when there are issues. Does the MSP respond quickly and take ownership of the problem?

Another key indicator is the MSP’s service level assurances. A service level agreement (SLA) is a document describing the minimum performance standards an MSP promises to meet. It should also clearly describe remedies — and even penalties — if the MSP ever fails to meet the minimum standards. An SLA is an essential part of a contract between you and an MSP.

Does the MSP have formal SLAs? Do the assurances cover what you’re buying? And do the assurances have ramifications? The willingness of an MSP to offer SLAs with significant penalties for service interruption is a sure sign that the MSP is a high-quality provider. No MSP can remain in business if it has strong SLAs and can’t deliver on its promises.

How willing is the MSP to meet your specific requirements?
Your company or organization is unique; it’s often that very uniqueness that has resulted in your success. Unless an MSP is willing and able to tailor its services to meet your specific requirements, you may find yourself bending your operations to suit the MSP — instead of the other way around.

You can tell a lot about an MSP’s flexibility during the procurement process. Do they ask a few questions and then send you a quote, or do they take the time to listen to your specific needs and develop a custom proposal? And since no MSP can meet every requirement, are they forthcoming about what they are able — and not able — to do, so you can make a fact-based determination of how well their offerings fit your needs?

Lastly, ask about a roadmap for their products or services. Your needs will evolve over time, sometimes quickly. Therefore, your MSP should have a plan that aligns with your future business needs.

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Can Retailers Respond to Changing Corporate Needs?

Joe Panettieri did a great job describing the IT management and business implications of the growing dispersion of today's workforce in his post "Managed Services: Safe at Home".

This trend is not only creating new challenges that are driving greater corporate interests in managed services, it is also attracting a broadening array of managed service providers (MSPs) to satisfy businesses' escalating needs.

The office supply retailers are increasingly nibbling around the edges of the IT services market. The most obvious example is Best Buy's Geek Squad which has primarily served the consumer needs of the residential market, but is also responding to the needs of the small office/home office (SOHO) market which Joe described in his post.

The latest example of this trend is the recent news that Staples is going to deliver a portfolio of IT services to small and mid-size businesses (SMBs). These services are going to center around the acquisition Staples made in late 2006 of Thrive Networks Inc., and the online storage services offered by EMC's subsidiary, Mozy Inc., formerly Berkeley Data Systems which was acquired in 2007.

Although Staples' new services are primarily aimed at SMBs, they could also appeal to large-scale enterprises trying to support remote workers working in branch offices or out of their homes. Both Thrive and EMC are already serving large companies grappling with these challenges.

So, should you consider out-tasking your IT support and management requirements to these retailers?

Your Selection Criteria
Staples' on-site and remote services will appeal to many companies who could get the best of both worlds -- economical field support and cost-effective managed storage services. You can also bet that Staples will continuously expand its portfolio to include managed security and desktop services, along with a wider array of on-site capabilities.

But selecting a retailer to support your IT needs will still depend on the complexity of your end-user requirements, and the geographic reach of the retailers' local personnel.

The Scalability Challenge
While EMC's Mozy service is location agnostic, the scalability of Staples' Thrive Networks staff is still unknown. Best Buy has been able to grow its Geek Squad to satisfy the bulk of its residential customers' needs. The key to success for Staples will be the retailer's ability to recruit and retain IT professionals to satisfy the on-site needs of SMBs anywhere, anytime.

If Staples, and other major retailers, succeed in delivering these on-site and managed services they will disrupt the highly fragmented IT services market in the same way they disrupted the office supply industry.

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Managed Services: Safe At Home

As more businesses allow employees to work from home, a new IT challenge -- and opportunity -- arises. It's impossible for employers to offer on-site, full-time tech support to all of their stay-at-home workers. But the rise of managed services -- including remote monitoring and pro-active administration -- can bring order to these highly distributed workplaces.

The trend toward telecommuting is undeniable. More than 40 percent of American and Canadian companies let their employees telework, according to WorldatWork, a global HR association. As energy prices continue to fluctuate and businesses increasingly focus on environmental issues, the march toward telecommuting will surely accelerate.

Home Networks Become Complex
As a small business owner myself, my home office includes a network with multiple nodes -- three PCs running a mix of Ubuntu Linux and Windows XP; and my trusted MacBook Pro running Max OS X.

Now, multiply that IT complexity across hundreds of home offices and you'll understand why many small, midsize and even large organizations struggle to keep their home-based employees online and productive.

That's where managed services enter the picture. Increasingly, managed service providers (MSPs) and VARs (value-added resellers) use remote monitoring and administration tools to troubleshoot small and mid-size business networks.

The New Executive Suite
The managed services trend is now spilling over into the home market, where entrepreneurs and executives now demand the same level of IT service and support that they experience within corporate offices.

Small business owners and midsize business executives need to rethink their IT outsourcing strategies. In fact, all IT projects and network administration decisions must now include the extended enterprise -- including home offices and mobile devices.

The old corporate network as we know it is dead. The clear line between your enterprise and your employees' homes are gone. Going forward you need an IT architecture that blankets all of your employees -- regardless of where they're working.

Make Your Move for 2009
As you negotiate IT service contracts for 2009, ask your IT consultants and integrators how they're addressing the growing trend toward stay-at-home workers.

And make sure your IT contracts for patch management, security, storage and other automated services cover those telecommuters.

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Small Community Banks, Big Managed Service Benefits

Community banks have attracted new customers by offering a truly personal banking experience that their larger rivals can't match, and by maintaining close ties to local communities.

However, all bank customers are demanding Business Technology driven services that many community banks simply can't provide with their current infrastructures. The lack of the latest technology can make migrating to new services prohibitively complex and expensive.

Community banks have depended on multiple providers for their voice and data networks. These banks found that they were paying substantially more for their network connections than larger institutions.

Moreover, having to deal with multiple providers can strain the smaller bank's modest IT staff. Implementing and operating a new converged voice/data/video IP network would overwhelm an IT team that usually handles simple tasks.

In addition, deploying a new IP network could negatively impact the community bank's operating budget. In fact, the total cost of ownership (TCO) for a typical bank's voice and data networks is second only to employee salaries and benefits.

Truly Demanding Operating Environment
Adding to these business challenges is the banking industry's strong emphasis on security and business continuity. Banks must be certain that their networks can pass their banking regulator's annual IT audit -- and deliver 24/7 services to customers in the event of a major disaster.

A strict regulatory environment and tight budgets make community bankers conservative when it comes to implementing technologies they consider unfamiliar. One solution that's proven, and likely to deliver lower operating costs, is the out-tasking of IT and communication network needs to a managed service provider.

A managed service solution can reduce a community bank's recurring voice and data expenses by 10 to 25 percent, with even greater reductions possible for larger banks.

Less Restrictions, More Freedom to Innovate
That said, an out-tasked IT and network infrastructure scenario isn’t purely about cost-reduction, it's also an enabler of customer service innovation. As an example, community banks are now deploying TelePresence applications that simplify the challenge of delivering full-service offerings at their distant branch locations.

A customer at an outlying branch can contact a bank officer at another branch and talk face to face without having to travel a great distance for the meeting. Plus, all required transactions can be completed locally.

Small community banks can now gain big Business Technology benefits, thanks to the creative use of managed services.

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Small Businesses: Your TelePresence Room Is Ready

Conventional wisdom says TelePresence -- the next-generation video conferencing technology -- is best positioned for enterprise customers with big IT budgets. But through affordable managed services, small businesses are poised to join the TelePresence party.

Fact is, TelePresence can benefit small businesses in many ways. It can allow entrepreneurs to meet virtually with business partners, customers, investors and even job candidates scattered across the globe -- without booking expensive business trips or depending on impersonal conference calls.

TelePresence creates a virtual environment where all participants feel as if they're seated in a single executive conference room. You can read each person's body language. You can maintain eye contact. And you can focus on deep discussions.


Only for Big Enterprises?
Now, for the challenge: The TelePresence industry is gaining momentum within large enterprises that want to improve virtual communications with customers, board members and other key influencers.

However, small business owners are not very familiar with TelePresence. And in many cases, small businesses couldn't afford the upscale conference room designs and back-end IT infrastructure that TelePresence requires.

A Better Option
Of course, entry-level TelePresence systems allow small businesses to get started with high-end video conferencing without breaking their budgets.

Still, there is another option that small businesses should consider: Managed TelePresence services, which are popping up in hotels, airport terminals and other places that involve business travel.

In a typical scenario, many upscale hotels will soon offer TelePresence conference rooms that you will be able to reserve for an hourly fee. Assuming the hotel chain has locations throughout the country and across the world, you'll be able to invite customers, partners and remote employees to participate in TelePresence sessions simply by telling them to drive to a local hotel.

The hotel, working in partnership with a service provider or major Telecom partner, will manage the entire TelePresence experience -- shielding the small business owner from any potential IT complexities.

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