By Scott Grossman, Chief Financial Officer, Ensono
Enlisting a partner to fill in your expertise gaps can position your business to weather the coming economic storm unscathed. But sometimes, the danger is inside the house.
As we sit here staring down the barrel of a recession, the collective thoughts of corporate leadership are rightly focused on ways to preempt damage, minimize impact and ideally, maintain some level of up-and-to-the-right momentum.
In my last The Maven Report article, “The Great Realization: Differentiate... or else,” (Summer 2022), I posited that a strategy of differentiation is the key to countering the effects of a host of negative forces in the present moment, from Great Resignation-related attrition to stagnating growth, and how outsourcing IT infrastructure management to an experienced Managed Service Provider (MSP) can be a critical component of that strategy. Doing so frees you to laser-focus your people and resources on the activities at which your company excels, without sacrificing operational excellence. A recent Forrester Total Economic Impact™ (TEI) report supports this thesis, identifying a direct, positive-revenue impact to working with a highly communicative and collaborative partner, with 95 percent of IT executives surveyed agreeing that a strong MSP partner allowed them to take advantage of new growth opportunities, while improving efficiencies and cutting down on operational costs.1
But of course, not all partnerships—or agreements—are created equal. If you’re trapped in a bad MSP partnership, these massive benefits might be nowhere in sight. In the current economic climate, you want to be as certain as possible that any investment you make is going to deliver the return you’re counting on. When that investment is directed toward a services partner, applying some key insights and best practices can help you avoid a fit that’s less than ideal, or course correct a relationship that’s on the wrong path.
There are a few major signs your MSP relationship may not carry you toward the destination you’re targeting. As you evaluate potential partners, or reexamine a partnership you’re currently working with, here are some things to be on the lookout for:
#1) Impersonal service – Due to their size, large MSP providers can offer some impressive benefits, from an abundance of specialized services to reliably fast response times. But that same size can also lead to problems, especially if the MSP is so big that they start to feel impersonal. What exactly does that look like? Infrequent, poor, and non-personalized communication are indications of a too-distant partner. Experiencing the same problems over and over again, or not being addressed in a timely fashion, are other telltale signs of a disconnect between your expectations and your partner’s ability or willingness to meet them.
#2) Inflexible and/or unreasonable contract terms – What does it mean for an MSP contract to be unreasonable? For one thing, it might be overly long, which could be a sign that the MSP is making big promises that it can’t deliver. It could also be overly complicated, making it more difficult for your organization to claim the services to which you believe the contract entitles you.
Inflexibility is another red flag. Ideally, a good MSP will leave some flexibility in their contract so that as your organization’s needs change or expand you won’t need to renegotiate from scratch or incur punitive termination penalties.
#3) A limited partner ecosystem – A major benefit of outsourcing your organization’s IT to an MSP is the increased access to specialists and other technologies that you might not have been able to afford in house. Because MSPs typically operate on a larger scale, it makes sense for them to invest in special services and build partnerships with other service providers.
However, not all MSPs are the same. A limited partner ecosystem can be fine, depending on your needs, but discovering that your business could benefit from a particular service that your MSP can’t help with is often an unpleasant realization because it can hamper your ability to evolve and innovate on your own timetable.
#4) Communication challenges – Whether you’re using your MSP for day-to-day IT troubleshooting or larger IT projects, communication is key. While it’s always great when your MSP is proactively communicating with you, it’s more important that you can reach out to them whenever you want to discuss something—and that you’re able to do so via a variety of channels, all of which are easily accessible, and equally active and reliable. If a change is important enough, you should be able to pick up the phone and speak with a real person directly involved in your project. For smaller issues, an email or online portal message may suffice—but you should never be in doubt about whether that message will be received with a prompt reply.
Unfortunately, some MSPs make this difficult on purpose, and it’s no surprise that’s a bad sign. If you’re constantly running into gatekeepers when you’re trying to get in touch with your MSP, or if you’re simply not able to get in touch with them as often as you’d like, it can leave the door open to significant problems. The more personalized and high touch a partner’s service is, the better that service is likely to be.
#5) Lack of strong project management skills – A good MSP can put a lot on the table, from standard IT support to larger projects intended to revamp your organization’s capabilities. As we’ve already seen, it can be problematic if your MSP doesn’t have a solid network of partners or specialists on staff that you might need to work with. But even if they do, it won’t be worth much if your MSP lacks project management skills. How will you know if they are lacking in this area? For one thing, projects won’t be moving forward at a healthy pace, and might frequently get stalled. A lack of project updates is another common sign.
Taken individually, none of these necessarily constitutes a partnership disaster or cause for panic. As with personal relationships, clients and MSPs need some time to get familiar with each other’s styles and ways of communicating and collaborating. Addressing any concerns early on, as soon as they surface, can often right a ship that feels like it’s veering in the wrong direction. But if you’ve signed onto a partnership that ticks one too many of the above boxes, you could be facing a problem that requires more serious action.
Many of the aspects of toxic personal relationships are also present in a toxic business context: Consistently unmet needs, clear disrespect, a lack or loss of trust, and an inability or refusal to communicate. Finding yourself in a place like this with your service provider can be incredibly nerve-wracking, both logistically and financially. You’ve invested time, money and resources into something that is delivering sub-par returns, you’ve created stakeholder expectations that are doomed to be disappointed, and, in all likelihood, you’re contractually obligated to maintain the relationship for an intolerable length of time—possibly years. While these contracts can be tight, there are still a few options on the table for you.
Talk to your MSP – In the best of all possible worlds, having a serious discussion with your MSP about their performance problems can actually patch things up. For instance, there might be a simple communication error or misunderstanding that, once resolved, will leave both parties happy. If you’re set on getting out of the partnership, talking to your MSP is still worthwhile, as they might be willing to let you out of your contract. It’s not a guarantee, of course, but there can be a steep reputational price to keeping a dissatisfied client stuck in their contract — and that can be a serious problem in today’s saturated MSP marketplace.
Look into renegotiating – So you’re unhappy with your current MSP, and they won’t let you out of your contract. On top of that, they aren’t actively trying to take in your feedback and improve their performance. What exactly can you do? Remember that it’s a bad look for an MSP to have a long-term dissatisfied customer and that provides major leverage. Even if they don’t want to lose an income stream by letting you out of your contract, they may still be open to the idea of renegotiating, which can result in lower cost to you for a reduced set of services.
Dig into your contract – If these approaches are unsuccessful, you may need to seriously consider an early termination. Combing through your contract carefully can help unearth any potential breaches—typically, your MSP will need to have failed to produce a deliverable written into the terms of the agreement. If your MSP is in breach of contract, you can inform them of this fact and begin the process of leaving your contract, freeing you to reevaluate the benefits to your business of partnering with an MSP and potentially pursue a more fruitful relationship elsewhere.
Even if you don’t identify a way to exit your agreement free and clear, the price to terminate may be worth paying. The value of the time, talent and innovation you’ll lose waiting for a contract to run out could add up to far more than whatever dollar amount a separation would cost you. The point of contracting with an MSP is ultimately to help accelerate your growth and drive revenue. \\
1 “The Total Economic Impact™ of Ensono IT Infrastructure Management Services: Cost Savings and Business Benefits Enabled by Ensono IT Infrastructure Management Services,” a commissioned study conducted by Forrester Consulting on behalf of Ensono, August 2022.
