Simplifying the Transition to a Managed Services Provider from Traditional Information Technology
MSP (Managed IT Services) v. Break/Fix Tech Support Services
Most Tech Support businesses operate in the traditional style of break/fix tech support and pre-paid tech support models. We’re going to look at the benefits and pitfalls of these models in comparison to a Managed Services Provider (MSP) and ways to move between models with minimal risk.
What’s wrong with the old way?
For clarity, break/fix tech support is the traditional structure of billing for payment in arrears of repair work, pre-paid refers to a very similar system but with payment in advance of work. Both models rely on the customer to request the break/fix tech support company’s services, usually in response to a technical failure.
These models have been in place for a long time because they have a lot of benefits. However, those benefits tend to be most effective in the short-term and decreasingly effective thereafter.
The benefits are nonetheless clear. break/fix tech support is the obvious starting point for a break/fix tech support business, taking orders as they are commissioned, building up a client base for jobs completed. Selling this kind of service is straightforward, as the customer simply receives an invoice for the amount of hours completed and the rate charged.
Even business clients and professional customers will often find it easier to pay in this fashion. The direct approach is attractive for obvious reasons, has little risk and set-up involved and is understandably the clear first step needing Information Technology (IT) and Telecom assistance.
The pitfalls are less obvious but will become apparent over time. There is a misalignment between the needs of the business and the tech support company. The business needs their systems working all the time, but instead must suffer downtime waiting for repairs. The tech support business needs a steady flow of work, but customers in this model are only calling for support when they absolutely need it; so if something breaks for months another tech support may be needed for a faster turnaround as revenues dry up. The business’s fixed costs, such as Information Technology (IT) staff, generally stay in place while outside tech support costs are sporadic.
This reactive arrangement which can be very stressful as your company waits by the phone for resolution of a problem. Even worse, the break/fix tech support business only sees your company when something goes wrong. This can lead to mistrust, even when there’s no fault in tech support services.
Breaking away from pre-paid or break/fix tech support can be difficult because the mind-set of hourly pay for clearly delineated work is hard to shake. However, it does provide a great foundation, especially in the early days of business technology for companies, on which it was a sustainable model.
Managed Services Provider to the rescue
We can define a Managed Services Provider as proactive, outsourced Information Technology (IT) support for a fixed fee. Rather than waiting for breakages and charging to fix them, this model is based on ongoing support. It is in the best interest of the Managed Services Provider to keep systems running 24/7 because they are not being paid every time something breaks down or goes wrong. Businesses also are able to finally have all systems running efficiently rather than having small tech support problems linger on for years.
Managed Services is therefore a great way to cut out downtime between jobs and build positive relationships. The company has a fixed monthly or annual cost instead of paying out when things go wrong, feeling more like insurance than emergency response. Our clients are able to unburden themselves of Information Technology (IT) support, having paid for peace of mind provided by the SeDanGroup. They can expect a constant level of support (depending on the terms of your Service Level Agreement) which keeps everything flowing smoothly and in short, is prevention rather than cure.
The benefits are clear for the company, too. Customers are kept for the long-term, paying monthly and enjoying dedicated support with fewer unexpected breakages. They are far less likely to move to other providers when SeDanGroup is already on-call. These pre-paid fees are easy to keep track of, allowing a company to forecast revenues based on a quick headcount of their clients and their respective packages. Reducing risk in this fashion is always desirable and makes planning easier, as your company no longer has to rely on chasing tech support problems day-to-day.
There are other extraneous benefits, too; notably the sales positioning that Managed Services offers. Customers already paying a trusted company like SeDanGroup for Information Technology (IT) support will look to us first for all additional Information Technology (IT) matters. New computers, network upgrades, offsite backup of data, software packages, strategic consulting and more are likely to be referred to our company. Warranties will often be managed alongside this kind of ongoing support and when manufacturer warranties expire, our company is ideally placed to provide new ones. Needless to say, Managed Services businesses tend to have more value at any given time.
The Cautions of Switching to a Managed Services Provider
When taking on a Managed Services model, a company must realize the risks. For small companies in particular, changing the company’s entire operating model can present big challenges and potential pitfalls. The key is in knowing what hazards await and how to manage expected risks.
The road to Managed Services starts with promoting a more robust service. Before making the leap, it’s wise to assess your business and the potential profits to get an idea of what to expect. You should know what your company can offer and what your costs will be before attempting to scale to Managed Services.
The first step is reducing costs. You can do this in various ways, such as using remote support software to minimize downtime from callouts. You may consider using tools to lock down the user’s systems to prevent installation of other software or tampering with settings. There will often be a first-time cost incurred to you as we spend time assessing the current systems and performing remedial maintenance to bring it up to standard. Reducing costs also means clearly defining what is offered in our services, as you can charged more for additional duties. You can also proactively book separately billed maintenance health-checks, or include them in higher-priced packages.
You will have dedicated staff for your ongoing tech support. This will likely involve having staff on-call, to promptly attend problems as they arise. You may also have to sacrifice legacy software or old operating structures to make this transition work. We ensure that your helpdesk system supports fixed-fee reporting according to your Service Level Agreement.
Make the most of the pro-active operation of Manages Services to monitor company systems for potential breakages and prevent them, while taking steps to improve overall system performance and software upkeep. We know about network faults before our customers does because of the right monitoring software, especially if we set error detection to automatically alert your company’s help-desk team.
There are tools on hand to help. Consider, especially during our first week of set-up with a new client, the value of server and systems documentation, disk clean-up and de-frag, remote support software, malware removal and maintenance utilities. We test everything installed to ensure it works correctly and works remotely when applicable. Be prepared to incur some time costs in training the customer’s Information Technology (IT) or admin staff to use new support tools and protocols for logging a problem. Demonstrations are invaluable.
Consider and analyse all these aspects of a Managed Services Provider before committing to the change. You must know that our workforce can handle all sorts of repairs, you must be sure that you can update your systems within budget, you must know where and how your company can grow and that your staff will be amicable to this change.
Your Move to a Managed Services Provider
When you decide to scale your business, start with educating yourself and your staff. Take on a few Managed Services contracts and see how we operate first hand, fine-tuning your service as we learn about your business processes and culture.
Remember that one size does not fit all; you do not have to abandon break/fix tech support entirely, instead can use it as a opportunity for your Managed Services Provider to assist with telecom including VoIP phones and internet (data) connection packages.
A company which has prepared itself for the risks of a new model will always be better off than a company which has not and stayed behind. With a handle on the kinds of service agreements SeDanGroup offers, how to market them and how to deliver a proactive support system instead of ‘putting out fires’, you can make the transition to Managed Services sooner than you think.