There are two big reasons IT teams pick the wrong IT MSP.
Integris has encountered these “usual suspects” thousands of times over the last 25 years, and we have new insights from a recent conversation with a 500-person financial services firm.
We’re not proposing any silver bullet solutions. However, we have a modest proposal to help in-house IT professionals and the C-Suite find trusted IT partners that complement rather than compete for IT budgets, staff responsibilities, and results.
With the prevalence of “anything for a buck” IT services, companies need openness and honesty from potential technology vendors to avoid getting stuck with risky and unreliable outsourced providers.
Reason #1 – The IT Budget is Too Low for the Business and the IT MSP.
It doesn’t take long for an experienced MSP account executive to tell if an IT budget is too low to match the scale of a business.
For instance, a 500-person bank with a 17-person in-house IT team and an IT MSP may spend $1.5M to $1.75M + per year, and still be under the average range for their industry. Especially if their network is experiencing problems and they’re looking for a new IT provider.
While the depository institution in this instance is close, they’re either not spending enough on the right resources or maintaining an efficient support model.
Where are we getting this spending data? Publicly available information on financial institutions provides insights into peer-level IT spending based on loan and deposit revenue, creating objective comparison models that don’t exist in other industries.
Negative Business Outcomes
Underspending yields several negative outcomes, including but not limited to:
- Loss of productivity
- End user frustration
- An inadequate or imbalanced support structure
- Diminished cyber resilience
- Higher compliance risk
- Recurring initiatives to reflexively replace outsourced IT providers
According to Brad Giddens of Integris FID, “Over the last 25 years, we’ve partnered with hundreds of in-house IT departments, and some are more operationally mature than others. Banks with lower operating maturity run into one major problem. When they add supplemental outsourced support, they exponentially increase IT spending without addressing the core issues.”
Brad continues, “The result is often a frustrated executive team. The bank’s IT spending is way above peer averages, but support is still less than average. The CIO or IT Director is equally frustrated because adding support was supposed to fix the issues. Still, nothing seems to improve.”
Learn More: Creating an IT Budget
Reason #2 – The Division of Labor is Misaligned Between In-House IT and the IT MSP.
Job roles of in-house IT and IT MSPs frequently overlap creating conflict, service issues, and waste.
Managing a full-time IT staff of 17-19 technicians and engineers takes a tremendous amount of work and energy. When the CFO or CIO attempts to supplement that team with an outside firm, the results are potentially polarizing – either a match made in heaven or a short-lived romance that would give The Bachelorette a run for its money.
The Worst-Case Scenario
Worst-case scenarios rule the day when a large in-house IT department isn’t following a strategic plan and they want an IT MSP to share responsibilities for filling the gaps, many of which are symptoms of operating without a strategic plan.
These plot points were obvious in the first ten minutes of our discussion with this financial institution.
The Red Flags of Misalignment
- Choosing an outsourced IT company to function as an extension of the internal team – using the same tools, methods, and processes – that so far, have been unsuccessful
- Growing an in-house IT department faster than employees can develop system integration skills and attain new certifications
- Buying cybersecurity tools and Professional Services Automation (PSA) solutions that no one operates at 100% efficacy
- Operating without standard documentation or visibility into problematic areas
- Promoting staff without a system to assess technical competency (which means B players fail upwards)
Do you have a process to assess IT effectiveness? You’ll need one before your in-house IT team can maximize its relationship with a third-party IT provider.
Learn More: How to Assess In-House IT Effectiveness
Partnering with the Right MSP
Partnering with the right IT MSP requires a pivot. If your goal as a CIO or IT Director is to be a steward of assets, you can’t continue with a routine that isn’t delivering results.
When IT departments fall into a pattern of rinsing and repeating, it becomes more difficult to bite the bullet and make tough decisions. The severity of this situation compounds itself when IT and the C-Suite don’t follow the same sheet of music.
I’ve been in the IT MSP business since 2003, and I’m baffled by the disconnect between the C-Suite and IT Departments. Executives at the top are usually technology generalists and IT teams are typically IT specialists facing rapid skill obsolescence the longer they remain at the same company, in the same IT department, year after year.
Ultimately, IT is kneecapped so instead of scaling your business, they’re scaling a buttered mountain.
Identify the Best Path Forward
Implementing an IT Operations Assessment (ITOA) is the first step to identifying the best path forward with a potential IT MSP.
The IT Operations Assessment gives the executive team and IT the power to adequately plan for your institution. It’s a hands-on review to help both parties understand what lies beneath the surface.
Most importantly, the IT MSP gains visibility into the prospect’s IT infrastructure yielding data-driven insights to help drive future business growth, improved end-user support, and overall efficiency.
The assessment typically takes 6-8 weeks and includes an in-depth analysis of the client’s infrastructure, staff, and IT spending. The deliverables for this objective third-party review include:
- Executive-level documentation to help generalists fully understand the business implications and impacts of their current network infrastructure.
- Forward-looking recommendations/strategies that align with the prospect’s overall business strategy.
- Identification of potential technology gaps with an actionable 12-month resolution plan.
- Comprehensive analysis of the organization’s cybersecurity posture.
- In-depth analysis of current IT support systems and processes and their impact on employee productivity and potential areas of frustration.
- A thorough review of current network infrastructure, capacity, hardware lifecycle, and overall efficiency as it relates to the overall business plan.
- Review of the prospect’s disaster recovery plan to ensure it aligns with recovery expectations in the event of a disaster.
- Comparative review of the prospect’s overall IT spending relative to peer-level financial institutions.
- Detailed written and prioritized recommendations tailored to C-Level executives.
- A full presentation to the prospect’s executive management team.
This comprehensive and granular IT environment inspection is also a great way to test the waters before committing to a long-term agreement with a potential IT MSP. A typical ITOA is between $10,000 to $40,000+.
Learn More: IT Assessments
Finding a Long-Term IT MSP Partnership
Finding a long-term IT MSP partner starts with developing relationships. The conversation that inspired this blog started did not. The dialogue began with an RFP request from a procurement department and very little or no interaction with asset owners in the enterprise. Both factors never auger well for the transmission of trust.
Unsurprisingly, we’re not big fans of RFP cattle calls. However, we’re life-long learners and natural fixers so we’re happy to allocate some qualification time to engage in select circumstances.
Luckily, we have a process to respond efficiently and make a good impression for future consideration. And we never miss an opportunity to diplomatically tell prospects what they need to hear rather than what they want to hear.
Taking a Strategic Approach
Making a good first impression and asking unique questions pays off. After suffering a revolving door of underperforming IT MSPs, many organizations will abandon an impersonal, templated approach to find new outsourced IT partners.
In my MSP career, I’ve seen several dozen companies return a few years later to pursue a more strategic, structured, personal approach. I’ve also seen their questions evolve in sophistication, a refreshing change from the ones on recycled RFPs, in rotation since the early 2000s.
Please schedule a free consultation to learn more about partnering with an operationally mature managed IT service provider.