3 Problems with Co-Managed IT and How to Avoid Them


November 8, 2021

Let’s identify and fix three common problems with Co-Managed IT services.

MSP services don’t always succeed as planned. It’s sad but true. Like any relationship, bad matches between clients and their MSPs are a two-way street. One company’s best-in-class MSP is another organization’s worst-in-class IT provider. On the other hand, a very mediocre MSP can serve a business that is way out of its weight class, but not without substantial risk to the client.

Mismatches are more complicated when your MSP shares IT management responsibilities with your in-house technical team.

What can go wrong? I will draw on over eighteen years of first-hand observations to present a quick review of three perennial Co-Managed IT/In-House IT problems and what you can do to avoid them.


Co-Managed IT Problem #1 – Strategic Misalignment

Strategic misalignment sets the stage for co-managed IT services to fail.

IT system architecture, design, and support are ongoing strategic priorities that require understanding and buy-in from the top.

The success of your mission and growth trajectory requires consensus (and enthusiasm) from a broad coalition of asset owners who should inspire the rest of the team to embrace the technology enablement process. Just say no to compartmentalization!

Is your in-house IT team onboard? Do you have an experienced IT Director you trust to call balls and strikes objectively? Do they have capable associates?

Get your prospective MSP and all IT stakeholders in the same room or Teams Meeting early in the qualification process.

Observe the reaction and rapport between your technical team members as they’re fielding questions about the business rationale behind the design of your IT stack.

You don’t need to be a vCIO or Senior Network Engineer to tell when someone is out of their comfort zone or threatened. Don’t ignore your intuition or first impressions from this encounter.

If your company is in disarray regarding strategy and tactics, proverbially speaking, your MSP could be an Oscar-winning actor but incapable of turning a terrible screenplay into a successful movie.

Learn More: The vCIO Superpower


Co-Managed IT Problem #2 – The Status Quo

The status quo and co-managed IT are bound to clash.

Some companies are slow to change the way they manage IT operations. And plenty of MSPs will gladly accommodate this requirement. The allure for a small MSP struggling to make payroll is irresistible. The same logic applies to large MSPs that want easy money and have contracts that protect them from the blowback.

The acronym for this time of IT provider is AFAB (anything for a buck). If this is what you want, clarify your desires upfront. Push back on overly confident MSPs that think they can change your mind. They will thank you later.

Over the years, I’ve made several friends with prospects who never became clients, but they enjoyed the openness and good cheer throughout the qualification process. And we’ve stayed in touch. As a result, Integris has received a flood of referrals for organizations that perfectly match our business model.

The following abridged examples, culled from honest conversations with prospects, demonstrate mindsets that are unlikely to change:

  • Law Firm: “We don’t trust the cloud and want to keep all our file shares onsite. If we decide to go with you, we require you to hire our dedicated engineer away from our current MSP. Our ISP services and phone system are a mess, but we can’t make changes because the owner’s brother-in-law is the telecom vendor.”
  • Manufacturing Company: “We insist on keeping our current ticketing system, even if it doesn’t seamlessly integrate with yours. This requirement is a non-negotiable because our IT team spent years trying to get it right.”
  • Property Management Firm: “We bought a premise-based file server. This way, we can see our IT guys working on it. Otherwise, we don’t know what we’re paying them for.”

These three examples reflect old-school thinking where the prospects think of MSP services as raw commodities, one step up from HVAC repair. None of the scenarios are scalable, and their comments reveal little or no interest in the strategic value of IT.

Are you evaluating IT providers with your five-year business plan in mind? What roles do regulation, compliance, and cybersecurity framework expertise play in your decision criteria? If you answered “no” to the first question and “very little” to the second question, an AFAB MSP will be a better fit.

Learn More: 5 Simple Truths About Managed IT


Co-Managed IT Problem #3 – Master Services Agreement (MSA) Scope Creep

Please read the fine print in your Master Services Agreement. And get very intentional about what IT to handle in-house and what IT to outsource.

For the relationship to be successful, your MSP and IT staff must stay in their respective lanes and avoid collisions. For example, the MSP handles the backend infrastructure, and the client manages the user help desk.

Many MSPs offer procurement services to ensure every endpoint (workstations, switches, ISP connections, Wireless Access Points, etc.) is compatible with your environment. This feature aims to promote standards that drive tighter security and higher quality of service.

If in-house IT ignores this guideline and purchases products and services independently, integration problems will ensue. As a result, support costs for the MSP will go up, and the client will pay higher monthly fees.

Many MSPs have client infrastructure standards that necessitate upgrades and projects throughout the relationship. The following stipulations are based on the technology lifecycle and quoted verbatim from a best-in-class MSA:

  • The client will ensure all equipment is under the current manufacturer warranty. Regardless of warranty status, equipment exhibiting chronic failure may require replacement at the client’s expense if it continues to cause significant business disruption.
  • Infrastructure equipment, including but not limited to servers, storage devices, network devices, and any business-critical systems, must be protected by battery backup units in good working order with sufficient battery capacity for proper shutdown in the event of power failure.
  • Software must be genuine, properly licensed, and vendor-supported.
  • All equipment with Microsoft Windows Operating Systems must be up to date. The client agrees to provide adequate maintenance windows and ensure client devices are online and available for updates following Service Provider’s standard Patch Management Policy.
  • Passwords must adhere to industry standards for length and complexity.
  • Remote access to all client systems and data must be via secured access methods, and the client must approve Multi-Factor Authentication (MFA, 2FA) for all covered IT systems.
  • All Windows devices must be running the latest Anti-Virus software and updates provided by Service Provider.
  • The client must authorize the MSP to encrypt and secure all wireless network traffic.
  • The client must allow the MSP to isolate guest wireless networks or place them on a separate network or VLAN.

Please keep these points in mind as you plan. The right MSP partner will be upfront about this and help you create an IT Roadmap and budget to guide your journey.

Learn More: Medical Tech IT Projects, Law Firm IT Projects, Pharma IT Projects, eCommerce IT Projects, Healthcare Data IT Projects, Mortgage Company IT Projects


What’s Next?

It’s imperative to understand potential problems before you commit to an MSP.

I hope these guidelines have increased your awareness and prompted some new to-do’s. Be on the lookout for future articles on this evergreen topic. I’ve only scratched the surface.

Jed is a Solution Advisor at Integris who has specialized in MSP solution development, sales, and marketing communications since 2003.

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