Every MSP Says the Same Thing. Here’s How to Tell Them Apart.

What Is Give IT To Me Straight?

Shane Naugher: Welcome to Give IT To Me Straight, the podcast from Dazzee IT. Each week, we break down technology, cyber security, AI, and business IT into practical insights you can actually use. Now, here's your host, Shane Naugher.

Why Is Choosing the Right IT Provider So Hard?

Shane Naugher: Hey guys, and welcome back to another edition of Give IT To Me Straight, where we dive into common topics and questions that we get from our clients as well as prospects. Today we're going to be hitting on one of the questions I just got this week from a prospective client. And while it's not as technical in nature, there are some technical components that hopefully bring some value to you as you are in the buying process when it comes to an overall IT provider or partner. And that question is: how do you pick which provider, which MSP, or which partner is best suited for you? It's becoming more and more challenging in today's environment. Most of the technology providers or the MSPs are saying pretty much the same things. And so as a potential client, trying to sift through those discussions and really get to what's different and which one you should go with is a challenging process. So I get it. I've been in this industry, gosh, I'm showing my age here, going on 27 years at this point. I've seen the evolution and I've seen how most providers started, and I've kind of seen the evolution from what we call MSP 1.0 to an upgraded version of that, MSP 2.0 and beyond, to where we are today. And I will say, in all of the years that I've been in this industry, it is probably the most confusing time for clients or prospective clients to really understand and differentiate between providers. So today I hopefully will give you some information that can help you along that journey.

Which IT Service Model Is Right for Your Business?

Shane Naugher: In terms of the overall model, there are different models of service when it comes to technology partners or MSPs. We have a full listing on our website if you want to go look under the pricing page. We kind of dive into how it gets priced out and everything like that. But towards the bottom of it, it goes into detail on the different types of models when it comes to overall providers, their structure, and when you would use one over the other. So I think the first step in the overall process is you have to understand which model is best suited for your operations. You go back to the early days in the early 2000s when we were providing services, technology consulting, and implementation. A lot of that was project-based. And there are still some organizations out there today that go that route. There are others that look at it on a time and materials basis, meaning, hey, I'm going to pay you for the hours that you come out and do whatever I ask you to do, and only when I call you to do that. Again, it's right for certain clients, not right for others. It really comes down to how you operate, what size of organization you are, how many employees rely on technology, what industries you serve, and whether you are subject to compliance. All of those come into play. And then as you move up into the managed services space, there are still some variables that fit into that. So first of all, you have to understand what those models are and what your business is best suited for. And then once you have that outlined, you can move into, okay, let's at least get into the same grocery store, if you will, in terms of comparing the different providers. So when it comes to managed services, let's say you're in that boat where you feel like you need that ongoing engagement, whether that's an all-you-can-eat type approach with a flat fee, whether it's partial, or whether it's block hours. How do you get to a point where you know what's right for you?

What Pain Points Should Drive Your Search for an IT Partner?

Shane Naugher: The next step in the overall buying process, I think, has to come back to what is your biggest pain point. The number one item, when we look nationwide, there was a survey done by MSP Success Magazine about two years ago, and it surveyed what causes organizations to look for a new IT partner, which is valuable for organizations like ours to understand where that's coming from. The number one item that causes organizations to start looking for a new IT partner is that their existing partner, internal IT, or lack thereof, is providing really slow response. That was far and away the largest item in the overall survey, exponentially. I want to say it was like seven times the next competitor in that space. So the number one thing that we hear is, well, our partner that we have today, or our internal IT department, they're just really slow to get back to us. And that's relative, right? Because slow could mean hey, I expect my issue resolved in five minutes, or I expect it within the week. You have to look at, as an organization, what type of problems do you experience, who do they impact, how much time does it take, and what does that mean in terms of a dollar figure or revenue that it's costing you. Once you can get to that point, then you can say, how do we solve for this? So if your number one issue is response time, you need to structure your interview and questions for a potential partner around that.

How Has the IT Provider Market Changed Over the Years?

Shane Naugher: It's not surprising, because this industry has grown and changed over the years. When we first started in the industry 26, 27 years ago, there weren't a whole lot of technology partners or providers in the space. You had probably a handful in the market. Nowadays, you've got tons of people. Anybody that knows how to plug a computer in is saying, hey, we're a technology partner.

Shane Naugher: Hey, we're an MSP. You've got copier companies, CPAs, cable installers. They're all saying, "Hey, we're an MSP." And whether they are or they aren't really comes down to what are you looking for in terms of service. So if fast response time is critical to you, you need to identify that upfront. And there are going to be some key factors that help you in that overall process. We'll go into each of these in a little more detail here in just a minute.

Why Is Predictable IT Expense So Hard to Achieve?

Shane Naugher: The next most complained about item when it comes to switching providers is getting to a point where there was some predictability in terms of the overall expense. Going back to the original models that we talked about, if you're in a time and materials arrangement or even a block hours arrangement with your existing IT provider or partner, there's not a lot of predictability in terms of what you expect to pay on a monthly basis, because you're the one driving when they come out and engage or when things break. And in that model, not every provider is going to fall into this trap, but certainly some providers fall into the trap that when you have problems, it's more profitable for them, meaning they're billing you for more hours. So it's a little counterintuitive.

Shane Naugher: When I look at the time and materials or even the block hour setups, it really comes down to: are you a smaller organization that has minimal needs? Typically less than 10 employees is where I see that as a fit, with minimal needs in terms of technology and use. Most of what you're using is cloud-based and you've got end users on tablets or very simple technology. In that time and materials approach, it's based upon what breaks and what's causing you to stop, and your engagement with that provider becomes billable as they do more for you. If predictability of expense is a huge concern for you, that's a risk you take in those models.

Shane Naugher: If you want a more predictable expense, you probably want to go into one of the true managed services options, where you've got a set amount of items that are done consistently on a month-over-month basis and a set fee that you can budget for each month.

Shane Naugher: Now, the next piece is that projects are typically not going to be included in a managed service agreement, and there are variable ways to approach this. Some organizations do time and materials for projects, meaning however long it takes is what they bill for. Some do fixed fee projects, meaning they'll give you a bid upfront. But in either scenario, you have to look at how much change is going on inside your organization on an annual basis, because projects are driven by change. Whether you're changing out software, adding new locations, or adding new equipment and technologies, those changes drive that project expense. So even though you may have a fixed fee monthly managed service agreement, that's typically for support and maintaining what's there today. If you change that environment, there's additional cost. So getting to that predictability, there are some concerns there.

What Does Lack of Strategy Really Cost You?

Shane Naugher: The third item we hear about when it comes to what causes people to look for another provider is lack of strategy. Now, if you're an organization that doesn't use budgets, strategy is probably not important to you, so you don't need to have that in your buying criteria. You may want it as you mature and grow as an organization and rely on it more. So I want to step through those three items and highlight some ways to help you identify what's better suited for you in terms of the type of provider.

How Do You Spot an MSP That Actually Prevents Problems?

Shane Naugher: When it comes to slow response, that's probably the most prevalent issue in our industry. Most of the time it's driven by the type of MSP or technology partner that's there not being structured to reduce the amount of issues on an ongoing basis. A red warning flag around this: if they focus heavily on the number of people working in their help desk department, that's probably a good indicator that they don't have a lot of effort and people dedicated to preventing the issues. The more issues that come in, unless they just continue to add people to their help desk, which drives up cost and causes them to go sell more of those types of clients, it's a cyclical spiral that you never really get ahead of. That's probably the number one reason we see slow response time: no one is really dedicated to finding what's going to blow up, and putting a process and plan in place to reduce those issues.

Shane Naugher: Now, I will bet my reputation that every MSP you talk to comes in talking about being proactive and how they're going to solve the issues and make your environment quieter. In reality, most of them are saying that because they provide what's called remote management and monitoring software, or RMM software. Here's a big secret: you can go buy that software yourself. You don't need a managed service provider to get it, and everyone is using the same tools. So there really is no differentiation if that's what they're relying on when it comes to reducing issues.

Shane Naugher: When it comes to how you actually reduce issues, over the last 26, 27 years I've found that you have to have people dedicated just to that task, because when people wear too many hats, you cannot identify on a day-to-day basis whether you're successful.

Shane Naugher: Having an individual role that's tasked to finding problems before they cause your end users problems is the only way that you're going to get to a predictable reduction in the amount of issues, which then leads to a more predictable response time. That kind of gets to where, in terms of maturity of managed service providers or technology partners, those that have dedicated departments focused on individual areas of technology and more specifically on reducing risk and liability, you're going to get faster response times out of those organizations. And it needs to be very detailed. Again, we're not always the right fit at Dazzee IT for every potential client, but those that want that type of environment, we've got KPIs that we track on those departments that focus strictly on reducing risk and liability, quieting the environment, making sure compliance is in place. All of those have individual departments that are tracked and accountable to daily, which then reflect in a faster response on our service desk. It's all tied together, but most of the industry completely misses that. So you have to determine, if response time is one of your main complaints, you need to make sure that you're asking questions about what do you do to enable that? And if they don't have specific responses, that should be a warning flag for you.

How Should You Evaluate Pricing and What's Included in the Service?

Shane Naugher: When you go to how do you price this, if you're in that time and materials, or if you're in block hours, or even going to the project side, if there's no process around that, your expenses are going to be variable. You need to make sure that you understand what they're providing as part of the services. What constitutes a project? How do they build those projects? Are they including any projects? And if so, what does that come out to? How does it get you into a budget structure?

What Should a Real vCIO and Technology Strategy Look Like?

Shane Naugher: I know a lot of people, it kind of goes to the third one about strategy. Almost every provider that you talk to today talks about having a vCIO, or virtual CIO, as part of the services. And again, kind of going back to the proactive side, vCIO I think has lost meaning, not as much as proactive has in the last 10 years, but particularly in the last three to five years, vCIO has diminished in terms of what it truly means. Most of the time what I see in the industry when people say they have a vCIO function, someone's going to come out and give you this long stack of reports on patching and backups and tickets, and here are our scores, and it's really all about justifying what they are doing for you as opposed to real strategy.

Shane Naugher: If strategy is important to you, ask questions about what does that process look like. What do you guys bring up in those meetings? Is it just a report review where we go over what you've been doing? Do you give me a budget? Going back to that budget item, are you going to be able to give me a two-year, three-year budget of technology expenses and help us plan that out? And it's not just about what do they want you to purchase. It's about what does the organization need to move forward and how do they leverage technology more effectively.

How Should Your MSP Be Helping You Take Advantage of AI and Automation?

Shane Naugher: When it comes to strategy, in the last 12 to 24 months, one of the biggest things that I think is most important for every organization, regardless of size, regardless of industry, is how are you helping us take advantage of new technologies and what's the right technology for us to implement? With AI and automation, that is so impactful to organizations that if you don't have solid strategy around that, you're going to be behind the boat or missing the boat completely. Having that as a component of what they're doing, there needs to be more than just, hey, here are some AI tools, go use ChatGPT, or we'll sell you a Microsoft Copilot license. How does this translate into real ROI in terms of time saving, in terms of new functionality? There has to be specificity there. So if strategy is a huge component of it, you need to dig into what does that look like. Not only do they help you identify what those opportunities are, how do they help you implement those? Do they have a partner to work with? Do they have someone they can refer to you? Do they do it in house? Those are questions that you should be asking a provider.

What Else Should You Be Looking for When Shopping for IT Services?

Shane Naugher: Beyond that, when it comes to overall services, if I were in the market shopping for services today, going back to AI and automation, that's the first thing I'm going to look at because I'm biased, because I see the impact and the potential. But beyond that, data analytics. I'm a huge KPI person. That's how we've operated our business the last 10 plus years. Every department has a list of KPIs they're responsible for each day and each week. We report those in our monthly all-teams, we report those in our daily huddles and weekly Level 10 meetings. Having the ability to get to that data, you need a partner that can help you with it, if that's important to you. If KPIs just make your eyes cross and as an organization you don't use that, it's not important to you. But if it is, you've got to ask the provider, how do you provide that type of data, or help us get that type of data, to enable it within our organization.

Shane Naugher: Outside of that, when it comes to picking providers, once you've gone through that list, there needs to be specificity. I know everyone puts together, here's our managed services, and most of the time they're saying, here's the cybersecurity tool we use, and here's this application that we bundle in, or here's the firewall. It's all the same. When it comes to the tools that people use, it's a different flavor of the same drink. It's the same thing.

Shane Naugher: So if you're basing your decision around, hey, they say they include this antivirus or this backup tool, it doesn't really mean anything, because that provider should be responsible for those results regardless of what tool they use. What you really need to focus on is what works best for your organization in terms of structure, in terms of features, and what you find most important when it comes to technology and the tools. And certainly not the lowest price. Again, if you're a small organization that has very little technology needs, okay, maybe you go with the lowest price. But if you're in a compliance industry, a regulated industry, or any type of highly competitive industry that relies on technology, you have to go beyond "we're a proactive company" and "here are the tools that we use" and "here's what we're going to charge you and it's the lowest amount per month." You're going to end up with the same provider in another 12 to 18 months that's disappointing you and you having to go shop again.

Shane Naugher: Because one thing I have learned over the last 26 plus years is you cannot get a different result by shopping for a technology provider the same way you did the previous one that disappointed you. I've seen it time and time again. People go into that buying process asking the same questions they asked to hire the MSP or the partner that's already frustrating them, and they're having to look for another one again. So you have to change the question. You have to change your buying criteria.

Where Can You Find More Resources?

Shane Naugher: Hopefully this helps. We've got some resources on the website that walk through what those components are. It's under our pricing page. There's a calculator in there if you want to get ballpark pricing. We give that to you on our website as well. If we're a fit, that's great. If not, hopefully I've given you some information so that you can make a better educated decision when it comes to choosing the right partner for the outcome you're looking for. If we are a fit, I'd love to serve you. If not, I'd rather help you find the right one that is. And then at some point down the road, if things change, we can talk again.

Shane Naugher: But hopefully this is of value to you. We'll be doing these periodically in terms of questions we get from prospective clients, as opposed to the ones that are more technology focused. Thanks for tuning in and we'll see you on the next episode.