Creating strong managed service provider agreements is important to protect your business and ensure you get the right IT support. These agreements outline the services, responsibilities, pricing, and response times you can expect from your provider.
Without a clear agreement, misunderstandings and service gaps can happen.
In this blog, you’ll learn what to include in a managed service provider agreement—like SLAs, security terms, and support details—to avoid risks and keep your IT running smoothly.
What Is a Managed Service Provider Agreement?
As with any business proposal, we should always look for what is most beneficial for our business or what best suits our company, right? This case is no different. When considering proposals from managed service providers, you should look for those that add the most value to your business. What makes it valuable? That’s what we’ll look at next:
Provides the comfort level necessary to work with the solution provider through documentation of the deliverables and the SLA.
It clarifies which hardware, users, vendors, and services are included and which are not. It clearly mixes up the services the customer will get and what the relationship between the MSP and the client will look like.
Clearly outlines the roles and responsibilities of the client and the MSP.
Any managed services assessment template will correctly ensure that clients’ existing environmental representation demonstrates the MSP’s knowledge of their business.
Establishes environmental requirements necessary for service. Creates a baseline ecosystem that measures and displays the managed IT support value for nonprofits to enhance overall performance.
Why Your Business Needs an MSP Agreement
After evaluating prices and benefits, the following list will give you much more clarity when it comes to understanding the importance of managed IT services. This way, you will not only understand their value proposition but also why they are indispensable for the optimal functioning of your business.
Understanding what the MSP is able of providing along with the levels of their expertise will set the groundwork of what the MSA should involve. In order for the coverage to make sense, the following services must be available:
- Proactively manage the technology: It is best for this to happen through centralized security services. You should be able to find patch management, anti- spyware and malware management, email management, voice services, data backup administration, desktop/laptop optimization, spam management, documentation.
- Network administration: Networking with the network administrator in a centralized systems network, using a technology checklist with best practices and reviewing a service report.
- Dedicated Account Management: Rotating technicians are more harmful than good. You should make sure that your MSP offers a 100% dedicated team, including a technology account manager who has an in-depth knowledge of your business, processes and common IT challenges.
- Strategic planning/budgetary considerations: Strategic technology planning should be done looking ahead. You need a technology advisor and a dedicated CIO to provide you with a technology roadmap, as well as scheduling network review visits through your dedicated technology account manager.
- Support services: Support should never be a hand off or out of reach. Solid support also means internal client end-user support desk team — help desk support, on-site support, problem identification & resolution, knowledge base — incl client portal and mobility support
- Are services scalable: The contract should include a clause that notes that services are scalable if your organization expands or downsizes. This should not be rigid.
Services Provided
Are you clear about the services your MSP will provide? Make sure you know exactly what services are offered, such as network monitoring, cybersecurity, data backups, cloud support and technical support services. This way, you will know the scope of the work and be able to intervene when it comes to supervision.
Responsibilities and Availability
It is important to know the extent of your MSP’s responsibilities. For example: Does it offer 24/7 monitoring? Online or on-site support? Knowing the scope of the services will help you keep expectations clear.
Response and Resolution Times
Establish Service Level Agreements (SLAs) that specify response times to issues and target turnaround times to resolve high, medium, and low priority tickets.
System Requirements
Here you should include everything, hardware, software, devices or systems. This will help to avoid compatibility issues and also make it clear how far the MSP’s responsibility extends.
Reporting and Documentation
Outline the reporting frequency and format, such as performance metrics, incident reports, and service reviews. Having your paper work in order always keeps you up to date and on the right side of the law.
Pricing and Billing Terms
As in any commercial transaction, you must be clear about information on prices, payment conditions and additional charges for services that exceed the scope. This way you can be sure to make informed decisions and avoid surprises when the bill arrives at the end of the month.
Termination and Renewal Conditions
State clear contract renewal, cancellation, or early termination conditions. This gives you flexibility, and protects your business if service expectations aren’t met.
Extracting Value from Your MSP Agreement
When you review the managed service provider agreement, you should look beyond just services and understand that there lies a roadmap for your IT strategy. What does this mean? That you obtain valuable information to get the most out of this agreement. As with any contract, you should review it periodically to verify that your MSP is complying with the SLA requirements, response times and whether their intervention is active and proactive.
Take advantage of the services they include: cybersecurity, monitored reporting, and systems optimization to better your performance and security. Be sure to keep the lines of communication open with your managed service provider, ensuring that they are able to adapt their services to meet your changing business objectives.
This way you actively manage the relationship and ensure that your MSP is accountable — your business gets the most out of the partnership and the investment made.
Common Mistakes to Avoid in MSP Agreements
If you are the type of person who is extremely meticulous before signing anything (which you should always be), these are some of the most common mistakes made when signing MSP agreements. Avoiding them will help you maintain realistic expectations and a much healthier and more transparent relationship with your service provider.
For example, imagine that you ignore the response times, those that you agreed to when you signed or that you do not implement measurable SLAs. This can slow down problem resolution and the worst thing is that it is completely legal (if it was not agreed in the contract). Some agreements also do not have fully defined responsibilities regarding cybersecurity, which can leave your company vulnerable.
Stay away from vague phrasing that can be interpreted differently. Moreover, companies tend to avoid studying the termination clauses, which restricts their options for exiting the contract even in cases of service quality crumbling.
Taking the time to learn about these normal risks is going to safeguard your small business and enhance IT performance.
Best Practices for Reviewing an MSP Agreement
Your company has specific needs that no other has, so you should make sure you review the MSP agreement carefully to ensure that each point is geared towards solving those specific needs. At the very least, to begin with, make sure that the services, response times and security measures are well defined.
So make sure there is a clearly defined contract with performance metrics and penalties for SLAs that are unmet. Assess transparency around pricing, renewal terms and exit conditions. It’s also a good idea to involve your legal team to ensure compliance and data protection clauses are reviewed.
Review the agreement regularly as your business expands or your IT requirements evolve. By implementing these best practices, you can ensure that you receive the best value and the highest accountability from your managed IT services provider.
Conclusion
It’s simple, once you realize that IT services are perfectly defined, the MSA becomes a tool for measuring what your business receives in exchange for what it spends.
If the agreement shows that the MSP will fill the gaps in your business that you need, can provide the solutions at a price showing there can be a realized savings, and provides the evidence that the MSP will be a partner to your business’ success–then the value will evident.
It goes well beyond getting the cheapest price as there are no bragging rights if you are not leveraging your resources and seeing a benefit to your business.
Understanding what your company needs will be the guiding light as to whether the MSP is the right solution partner for your managed IT support services needs and you will be able to identify what is missing or any holes with a thorough review of the managed services agreement to ultimately see the real value.
Download our FREE Business Guide to Managed Services eBook for a comparison of IT management models and use the included checklist to assess your company’s current IT performance.
