CXO Perspective: How to Benefit from a Managed Service Provider Partnership

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CXO Perspective: How to Benefit from a Managed Service Provider Partnership

In an earlier blog, CXO Perspective: How the IT Organization Can Deliver Clear Value, I discussed the ideal role of the IT organization and its core mission in driving the success of the business from my perspective as both COO and CFO at an organization. Now I will detail how the IT organization can focus on its core mission by employing a managed services provider model to deliver tasks that, in my opinion, may be context to that mission.

It is absolutely core for the IT organization to act as strategic technical advisors and apply technical expertise to the business directly; they are solution finders and implementers of those solutions: stakeholders in the business operations and stakeholders in the customer experience. It should be context for the IT organization to provide functions that can easily be outsourced, such as data center management, device monitoring, and legacy system support. These functions should be outsourced to a Managed Service Provider (MSP) that becomes a partner in your business’ success.

What to Expect from an MSP
It is the role of an MSP to assume the responsibility to deliver technology results for your organization – the MSP is obligated to deliver outcomes, not a process.

This is where some IT organizations have experienced challenges working with an outsourced provider. They become upset when the provider is not following their internal processes. But as the leader of an IT organization, you should understand that you are hiring an MSP to deliver “outcome-based” services, often following “best-practice” processes or “better-practice” at a price point lower than your internal costs. If you insist that the MSP follow your processes, exactly the way you did, it will likely result in the exact same costs, and ham-string the provider’s ability to achieve better or best results for you. And that’s not going to help you achieve your goals.

Instead, you should partner with an MSP to provide a series of technology outcomes so that you don’t have to worry about day-to-day IT tasks. You should review the MSP’s weekly, monthly or quarterly reports to ensure they are tracking with your expectations. Your IT organization and the business will benefit as the MSP organization completes tasks that are context or non-core to your mission – and you should realize cost savings as well.

For example, earlier in my career, after consulting with a large healthcare insurance provider (a payer organization) to outsource half its IT function, I was asked to become the interim CIO. In this role, I focused the remaining IT team on strategic objectives for the enterprise and passed along non-strategic tasks to our managed service provider partner. Then, we governed the provider. There’s a big difference between managing and governing the service provider. Governing means providing a set of “guard rails” for your expected outcomes and periodically reviewing those results with your partner. When things are tracking, you’re good. If they’re not tracking, you put corrective action in place.

Achieving Partnership with Your Provider
The only kind of managed services relationship that works is where it’s a true partnership. There must be enough flexibility and trust to enable both parties to redress something that wasn’t anticipated in the original MSP agreement. Where clients and service providers get it right is when they craft a contract that says, “We’re going to come back if one of the parties can demonstrate that what they agreed to at the beginning of contract didn’t happen; then it can be renegotiated.” And that’s where you get 15-20-year relationships that work.

At the healthcare insurance provider, the role of the in-house IT staff was to govern the service provider, review reports, and establish strategies. They met with the line of business (LOB) owners to scope new systems if they were required and hand off the implementation to our service provider. In this way, internal IT was the go-between between the business and the service provider. It was their job to translate what the business needed, communicate that to the service provider, make sure things were set in motion, and ensure those things were delivered.

This is a great example of how the internal IT team was able to elevate its focus and value to the business, sitting in on executive sessions, meeting with the business leaders, and then communicating with the service provider to accomplish the strategic or tactical systems required by the LOB’s. The service provider delivered the expected outcomes.

This is one of the main benefits of working with an MSP: The ability for a limited number of IT specialists to create blueprints for the future, and then have a service provider implement those plans. In many situations, you have access to best practices that you wouldn’t have internally. You also have access to costly investments that the service provider makes that your organization does not need to make, such as vendor and technology certifications.

Fostering Transparency and Guidance
Ultimately, selecting an MSP partner is about transparency and guidance on both sides of the table. It’s important for both the client and the service provider to establish a baseline at the beginning of a project or ongoing engagement. This is often why you go through a pilot project – to establish baselines that may not exist. If the baselines already exist, as the client, you should share that information with your service provider. This may seem counter-intuitive, but a best practice is to give the service provider your budget and say, “Here is what we spent in the past. Here are the volumes that we’ve done. Here are the service levels that we’ve been able to deliver to ourselves.” The more information you give the service provider beforehand, the better the service delivery model; you’ll get pricing that is something you can rely on, generally a lower cost structure, and you’ll get better outcomes.

At MTM Technologies, we often serve as the client’s advisor, walking them through this process. In the end, we say, “If you choose to go forward now with this work, you have all the information at your fingertips, and we can do it for you. And if you choose not to, we’re okay with that.” We guide any client that’s interested and hasn’t gone through the journey. And I can’t say this strongly enough, a good advisor works both for the client and for the service provider for mutual benefit.

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MTM Technologies, Inc. is a Cisco Gold Certified Partner, meeting all requirements for attaining the broadest range of expertise across multiple Cisco technologies. We have achieved Cisco advanced specializations in the following areas: enterprise networks architecture, security architecture, collaboration architecture, and data center architecture. MTM Technologies has integrated Cisco Hybrid IT, Cloud and Managed Services, and ensures high customer satisfaction in its end-to-end Cisco solution offerings. As a Cisco Gold Certified Partner, MTM Technologies has access to Cisco’s comprehensive sales, technical and lifecycle services training and support.

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