What is the Meaning of Co-Managed IT services?
The term Co-Manage means “to look after, or take responsibility for an activity with another person or business”.
So Co-Managed IT services can be defined as “An outsourcing model which allows a business to extend the capabilities of their Internal IT resources, with those of an external IT specialists or Managed Service Provider organization.”
Co-management differs from Full Outsourcing of IT services – with full-outsourcing, a Managed Service Provider takes responsibility for administration, support and maintenance of all IT systems, the business usually requests changes and support from the Managed Service Provider and relinquishes administrative control of the IT systems.
How can offering co-managed services help my MSP business?
Getting new leads is hard, so using a smaller sub-set of your services as a hook is a good way of getting introduced to a new prospect. As such, consider how you can design services that help you stand out from the crowd but also give you the opportunity to upsell once you have built trust and a relationship with the customer.
Firstly, lets consider why a business would want to consider outsourcing part of their IT services to a third party.
Why do Businesses consider Co-Managed IT services?
Even in a small business, IT can involve numerous systems, each requiring a unique skill set. Many businesses do not have the skills or expertise to adequately operate their IT systems, or perhaps have outgrown their internal IT team and are short of staff.
Co-management of IT allows a business to transfer some of the workload and responsibilities while still retaining overall control over their systems.
SMB – Co-managed IT as a first step
Very small/younger businesses (<20 users) may consider co-managed IT services as a first step into spending money with a third-party IT company.
In small businesses, IT is often a side responsibility of a founder, or someone who has a technical aptitude, but also has another non-IT role.
What triggers the move to co-managed IT services
- Repeated or impacting technical problems which cannot be resolved with skills in-house.
- A new system requires expertise they realize they don’t have.
- Growth, or workload levels which mean IT is not getting enough focus.
- A security issue or concern related to security.
Break/Fix arrangement or co-management?
A Break/Fix style arrangements is similar to an emergency plumber.
Plumber:
The toilet is blocked and doesn’t work : call the emergency plumber to fix the unpleasant problem.
IT Provider:
The PC with the finance software on it wont start : call the emergency IT provider to fix the unpleasant problem.
Break/Fix style arrangements are more common in small businesses that do not feel the need to invest in IT systems. The business owns responsibility for IT systems until something breaks, then they call the IT guy to come and help.
This could be classified as co-management, but unless there are contracted terms or enduring access granted to the IT service provider, then this is more of a “break/fix” arrangement and services are likely to be charged on a pure time and materials basis. In most cases, there is nobody responsible or care for IT until something stops working – it’s more of a “no management” than co-management system.
Medium Businesses – Extending the team
Many Medium sized businesses have a full time IT role on the payroll, this individual could have grown up with the business, or have been brought in at a point to run/manage/own IT. This role may also encompass management of business applications, which is a different skill set to Desktop/Infrastructure/Security/Voice functions.
It is difficult for this size business to fully-resource an internal team for everything, so it is common that one or more external providers will be used. Medium sized businesses have greater demands on the IT department and even a business with 20 users may have many IT projects and challenges.
Larger businesses with hundreds of employees and multiple branches may have a small IT team, but will still have gaps in skills and capacity.
The skills and approach of the individual in the IT leadership role can be a leading indicator of whether a co-management or full outsourcing model will be used. As businesses get larger, the model is likely to involve outsourcing to multiple providers while control is retained – co-management becomes common.
A more technical hands-on IT Manager may want to retain control and be able to make changes to systems. This situation might occur where a Systems engineer has transitioned into a management role and has a desire and interest to still be “on the tools” retaining control of the systems.
A more strategic IT Manager may want to retain primary control and knowledge, but outsource defined areas which are seen as non-strategic or requiring specialist skills.
With rapidly growing businesses, individuals can become swamped with technical support and fail to balance strategic projects and support workloads, in the absence of being able to build an internal team, a co-managed IT arrangement is a less threatening option than full outsourcing.
What triggers an opportunity for co-managed IT in Medium sized businesses?
- Desktop support workload
- Delay in service by overworked staff for common tasks – resulting in low satisfaction in users
- Strategic Projects causing a reduction in available staff for Business-as-usual IT tasks
- Overflow capacity for sickness or to cover longer term leave
- Lack of skills or problem solving
- End of life of infrastructure/service
- Change in leadership or management structure or strategy
- Exit of key staff (that may have been running everything internally) or staffing issues
- Mergers/Acquisition or divestment
What are the key values an MSP brings to customers
MSPs offer huge value to businesses, through operating at a larger scale across many customers. It’s important for MSPs to refresh themselves to the value they bring to customers. Remember these for your sales conversations.
Microsoft Licensing
Understanding Microsoft’s latest product rename, licensing structure, pricing or bundling tweaks is not easy. Imagine trying to navigate this yourself – do you think most non technical businesses will know whether they need Microsoft 365 E3 or Microsoft Office 365 E3, or Microsoft Business Premium? MSPs are able to consult and deliver the appropriate solution for the customer.
Support Desk and Support
Running Support 24×7 is tough, but not abnormal for even a mid sized MSP. Help desk services, proper systems for support case management and escalation processes are difficult to match unless you are an enterprise.
Infrastructure
MSPs have the infrastructure, software and know-how to advise and protect your on-premises and cloud infrastructure. Infrastructure Platforms owned by MSPs are typically a similar scale to Enterprise level infrastructure – gets you better data centers, higher fault tolerance and removal of every day worries.
Cloud Services
MSPs have to understand how cloud subscriptions work – all the bits and pieces and the obscure billing – most customers are just paying the bills and not knowing what its for. MSPs can provide value in choosing the right options, reducing costs and selecting the right infrastructure for reserved instances.
Software and Solutions
MSPs are immersed across many customers, experiencing different problems and also working with a broad spectrum of technologies. This means that they can be a great asset in finding solutions to problems.
MSP Considerations for Co-Management Arrangements
Most MSP’s will have a core set of offerings, which are hopefully structured and standardized. This makes it easier for the MSP to deliver a service which can be quantified and written down in a contract.
Co-managed IT services may not fit into the MSPs standard list of services but may suddenly appear out of nowhere with a new opportunity.
New business is hard to find, so it’s hard to turn down work, even if it doesn’t fit your standard service model. This can be particularly hard when this is a larger company or brand which makes the opportunity appear more appealing than it actually is!
A foot in the door, or the start of a difficult relationship?
Many MSPs keen to get a foot in the door with a larger company sign up to a co-management deal without fully considering the implications, or defining the agreement or the service offered.
Without clear definition of responsibilities in your agreement, co-managed IT can be particularly challenging and risky for Managed Service Providers.
You could gain full responsibility for the actions of the IT staff within your customer, yet have no control or power over how they work. PROCEED WITH CAUTION!
As a generalization, it is easier to convert a small business from co-managed service to a full outsourcing agreement than it will be for a larger organization with its own IT team. Change gets more difficult the larger the organization, even if you know it might be better for them, it doesn’t mean it’s likely to happen. Remember Newtons third law of Physics – if you are something small, it’s hard to change the direction of something very large.
Co-Management Offers
Co-management is standard to some MSPs and alien to others.
Define your co-management offers clearly ensuring that they are services you can deliver effectively independently of your other services – this will help you attract qualified businesses and also ensure that you are set up for success from the start.
These will likely be a sub-set of your fully managed services. When designing/defining, ask yourself the following questions.
– Can I describe this service clearly?
– Will this be easy for my team to deliver?
– What can I be responsible for?
– What does the customer need to do to make this successful?
– How is success measured?
– What resources/skills do we need?
– How much will it cost me to deliver this service?
Structured as independent building blocks, these can pave the way for up-sell opportunities and a deeper relationship with your customers.
If it doesn’t fit, be brave and walk away
If an opportunity appears for something you have never done before, doesn’t fit into your skillset and is not something you planned on offering, be brave and walk away.
For example – You are a Windows shop and someone wants you to maintain and support a set of RedHat servers. You don’t have the skills – this is not going to help you win more business with the customer – it’s more likely to waste your time, impact your other customers and leave you with a poor reputation. Refer this business to someone with the skills.
Up-Selling from Co-management
How do you upsell from co-management?
Trust is at the foundation of any long-term business relationship – with IT services this is no different, your customers are relying on you to give them good advice, keep them working and protect their businesses. In todays world, this is a great responsibility.
As the saying goes “Trust is earned, and rarely given”. A great service, combined with good account management places you in great standing to win new business when the opportunity arises.
The best way you can earn trust is by delivering on your promises.
For a businesses customer, each relationship costs time and effort, businesses are hence keen to do more with businesses they can trust and work with. Going out to find a new IT provider is difficult, time consuming, scary and prone to risk – nobody likes doing it, so your odds of success are dramatically improved.
Don’t just deliver great service, tell them about it! Make sure you can measure and show them how great your service has been, and importantly listen to their problems and take care of them.
At an account level, where possible, always try and go beyond your key contact. Meeting end users and understanding their experience of your service helps identify problems as well as opportunities. They often have a different perspective and can help support and strengthen your relationship.
Meet regularly, make sure they are aware of your other service offerings. If they don’t know what else you may offer, they may end up buying a competing service. If you are easy to deal with, then you’ve got a better chance of being considered when the next project arises.
Offering Desktop Support as co-managed IT services
Desktop support is a key area which is often a problem for internal IT departments, is not seen as strategic, but is where the IT team gets a bad name! Larger businesses may look to outsource level 1 or level 2 helpdesk services.
This can become challenging for both the MSP and the Customer.
To run the helpdesk efficiently, the MSP needs to have administrative access to systems. At which point multiple parties have responsibility for administration. Standards, processes and procedures should then be defined and followed. This alone is beyond challenging!
Using Atria
Atria allows you to take on the basic support of a customer very quickly, while ensuring your staff can manage/maintain/support them immediately.
The Basic Process:
- Connect
- On Premises – deploy Agent into Customers environment
- Cloud – Select Azure AD tenant for customer
- Import Users
- Support users through core User moves/adds/changes/password resets
Following this, you can then grant administrative access through Atria to the customer – allowing them to make changes themselves.
1. Offer Independently – Enable Self-Service for co-management
For a small price per user, you can provide Atria to a customer to help them to perform their own IT administration tasks. This could be offered without any Support services.
2. Offer as part of your Support service
How many of your competitors offer a self-service function to their customers? This is a unique way of differentiating your managed service. Particularly For larger accounts, this will be seen as a significant bonus. The fact that Atria has a web interface and talks in terms of users, means that with a small amount of training, your customers HR team can be handling onboarding and offboarding of users.
3. Upsell
Publishing your other services into Atria provides a great way for your customers to upsell themselves – using the Atria SDK, you can add these into Atria, making it easy for your customers to consume more of your service.
