The definitive guide to IT managed services€¦ · The Definitive Guide to IT Managed Services Edition 1 – November 2018 10 Compliance & security Whether you outsource, partner

The Definitive

Guide to IT Managed

ServicesEdition 1 – November 2018

www.acora.com

www.acora.com

The Definitive Guide to IT Managed Services Edition 1 – November 2018

Table of contents

Introduction ..................................................................................................3 Chapter 1 – What are IT Managed Services .........................................4Core components of IT managed services ........................................................5

Chapter 2 – Business Drivers of IT Managed Services .......................7Domestic and international growth .................................................................7Agility................................................................................................................8Talent deficit .....................................................................................................9Compliance & security ...................................................................................10Adopting new technologies ............................................................................11Mergers & acquisitions ...................................................................................11

Chapter 3 – Understanding the RoI of IT Managed Services .........12Managed IT Services – basic like for like cost comparison .............................12Managed IT Services – consequential savings ................................................13The value of an effective MSP – knowledge savings ......................................13 Chapter 4 – Getting ready to move to IT Managed Services .........14Build a business case ......................................................................................14 Driving transformation ...............................................................................14 Financial impact .........................................................................................14 Select the right provider .................................................................................15 Due diligence checklist ...............................................................................15Switching providers ........................................................................................16 An easier transition ....................................................................................16 Transfer of people & roles ..........................................................................16

Chapter 5 – Securing the Contract and Internal Readiness ...........17The contract – what to look for ......................................................................17 Reporting ....................................................................................................17 SLAs ............................................................................................................18 Preparing your business for change ...........................................................18

Chapter 6 – Transitioning from the Current State ............................19Timeline ..........................................................................................................19Dos & Don’ts ..................................................................................................20 Dos .............................................................................................................20 Don’ts .........................................................................................................20Surviving the first few weeks ..........................................................................20Getting the most from your contract .............................................................21Conclusion ......................................................................................................21

www.acora.com

The Definitive Guide to IT Managed Services Edition 1 – November 2018 3

IT managed services are an incredibly valuable, but often misunderstood, option for helping your organisation reach its strategic IT goals. When deployed correctly, you stand to make savings in terms of time, resources and money.

But to realise the maximum available benefits you need to comprehend the many different delivery models used by managed services providers – and how they fit your own operating models and processes. And you need to know how to sell the concepts to your senior decision makers – and the rest of your employees.

Managed services are not always an off-the-shelf offering. With flexible delivery models, service levels and coverage options you can build a package to suit your requirements. This guide will help you understand what to expect from an MSP, and outline your part in the equation, so you can be sure of getting the deal your business needs.

Introduction

www.acora.com


It is quite common for people to confuse IT managed services with outsourcing. Although the basic principles are similar, these two concepts are distinct and different.

Outsourcing. By its most simple definition, outsourcing refers to the purchasing of services or expertise from an outside company. An Outsourcer usually looks after a whole layer of IT – sometimes all of IT (from help desk, platform, storage, people, software, security and application management) and sometimes involves ownership and transfer of people and assets.

Managed Services. The term Managed Services increasingly reflects the growing demand for outcome-based models, such as SLAs, that have a business meaning delivered on a subscription basis. It is a more descriptive term for specific solutions that go beyond just cost savings to align with growing expectations. A managed service provider (MSP) works alongside the organisation’s existing IT team and becomes an extension of their company. They share their goals and work proactively to improve their IT environment, while leveraging technology to move the business forward. You could say that they are a form of Outsourced IT.

Chapter 1What are IT Managed Services

Takeaway There are three components of IT managed services:

1. End user support2. IT infrastructure support3. A combination of both

Your business may need to use a combination to balance support coverage and budget.

Don’t get too hung up with the terms managed services and outsourcing. Focus on the service you need rather than whether it’s labelled an outsourced solution or a managed service.

www.acora.com


When you work with an MSP, you are bringing in services that you cannot or do not want to provide internally in order to improve or increase IT capability.

In summary:• Outsource and Managed are often used interchangeably by providers• Don’t be afraid of the word “outsource”• Some MSPs also provide outsource solutions• Focus on the service you would like to be provided • An MSP is often more specialised• An effective MSP becomes part of your company

Core components of IT managed servicesWhat do managed services actually look like? Typically they can be broken down in to two core components: end user support and IT infrastructure management.

End user support This is the equivalent of outsourcing your first and second levels of support. Your employees can log issues with a remote helpdesk for further analysis and resolution. All of your end user devices are supported, with issues being escalated to in-house third line support if appropriate.

Core components of end-user support include:

1st line support Incident management Service request fulfilment

Problem resolution Third party escalation User device support

You are then able to customise the service received, choosing SLA response times, and hours of coverage to match your operations.

www.acora.com


IT infrastructure support The second option is to hand over support for the hardware and software that make up your infrastructure. Under this model the managed service provider takes over your third line support responsibilities.

Again, you choose the SLAs and coverage hours to suit. But you also gain access to expert-level assistance with change management and patch management to drive IT developments forwards. Proactive asset, security and capacity management and monitoring services ensure that you can keep the lights on too.

Core components of infrastructure management include:

Change management Asset management Capacity management

Patch management Supplier management Security management

88% of firms are using third-party providers for at least one component of their digital transformation. Accenture 1

1 Digital Transformation in the Age of the Customer – Accenture – https://www.accenture.com/_acnmedia/Accenture/Conversion-Assets/DotCom/Documents/Global/PDF/Digital_2/Accenture-Digital-Transformation-In-The-Age-Of-The-Customer-Infographic.pdf

www.acora.com


The business drivers for adopting IT managed services can vary from one business to the other. Outlined below are some of the strong drivers for consideration when building your business case.

Domestic and international growth A lack of customers is not the only barrier to growth. Sometimes your own internal operations create limitations that slow your capacity for expansion. A lack of IT staff to handle increased demands for support or resources for instance.

Faced with saturation in the domestic market and increasing pressure from international competitors, many mid-market firms are being forced to increase operations outside Britain’s borders. This means extended operating hours – often 7x24x365 – and significant investment to ensure sufficient technical resource is available to support users and maintain systems at all times.

Partnering with an MSP can remove these stumbling blocks. They must provide the additional resources required to continue to meet the terms of the contract. Which means that your staff are freed to focus on the strategic projects that will help you achieve your growth goals.

Chapter 2Business Drivers for IT Managed Services

Takeaway Managed services will help your business reach its strategic goals, by:

• Freeing resources to support business growth

• Increasing operational agility to meet the challenges of a constantly-changing marketplace

• Plugging skills gaps in your IT team

• Improving compliance and security safeguards

• Accessing new technologies without skills limitations

www.acora.com


AgilityDemands on IT resources are rarely constant. Consider the effect of the Christmas season on the retail industry for instance; demand on resources increases exponentially for a month or two before easing off again in the new year.

Under a traditional in-house infrastructure model you will need to ensure you have sufficient infrastructure and resources to cope with these peaks in demand. You could hire contractors to provide temporary cover – at significant additional cost. Or you could pass the problem to an MSP who can scale their workforce more efficiently than you can.

More than one-quarter (27%) of respondents say that their organisation is at a competitive disadvantage because it is not agile enough to anticipate fundamental marketplace shifts. Economist Intelligence Unit 2

2 Organisational agility: How business can survive and thrive in turbulent times – Economist Intelligence Unit – https://www.emc.com/collateral/leadership/organisational-agility- 230309.pdf

www.acora.com


Talent deficitBritish businesses face an unprecedented skills shortage. It is becoming harder to recruit for many in-demand IT skills and you may be struggling to hire the people you need to drive digital transformation or to properly secure systems against cybercriminals.

By working with an MSP, the problem of skills shortages is also delegated. Again, it is down to your infrastructure partner to hire the right people to keep your systems running. This means that should you wish to extend or enhance your operating platform, or to adopt new technologies, your MSP must source people with the relevant skills to assist.

According to 81 per cent of recruitment businesses, the UK workforce is unlikely to meet demand in cyber security over the next 12 months. Recruitment and Employment Federation 3

3 Demand for cyber security staff to surge next year – Recruitment and Employment Federation (REC) – https://www.rec.uk.com/news-and-policy/press-releases/demand-for-cyber-security-staff-to-surge-next-year-rec

www.acora.com


Compliance & securityWhether you outsource, partner with an MSP, or retain all IT functions in-house, your business will always retain ultimate responsibility for matters of compliance and security. But your partner can help provide advice, guidance and implement safeguards to assist – particularly if they are experienced in your industry vertical. A financial services organisation would greatly benefit from partnering with an MSP who is familiar with FSA compliance and regulations for instance.

The issue of compliance and security is of increasing importance to your business, particularly in light of the recent General Data Protection Regulation. Security is a now a strategic priority – but most organisations struggle to keep pace with the criminals. As well as providing the manpower you need to manage and maintain defences, an MSP also uses specialist tools to detect security risks and breaches, allowing you to contain potential issues before they escalate.

The highest IT budget priority will be security according to 53% of businesses in 2018. CBS Interactive 4

4 Infographic: 2018 IT budgets are up slightly; spending focus is on security, hardware, and cloud – CBS Interactive – https://www.zdnet.com/article/infographic-2018-it-budgets-are-up-slightly-spending-focus-is-on-security-hardware-and-cloud/

www.acora.com


Adopting new technologiesYour business may come to a point where it needs to invest in specialist service management tools and software to improve overall IT efficiency. Making such an investment is a big financial commitment – but a decent MSP will already have these tools at their disposal; in turn you can deploy them for your own service requirements, saving you money.

Furthermore, as your workforce cries out for more cloud-based technologies, you will be looking to modernise your infrastructure and your workplace. But how do you know which technologies to invest in? How much time and effort will it take in training and/or recruiting the staff to deliver them?

Your MSP will not only be able to advise you on where and what to invest in, but they will already have existing relationship with many of the key vendors. An MSP will be able to implement the solutions and manage the relationships quicker and more efficiently than you will.

Mergers & acquisitionsNo matter how much due diligence your team undertakes, the merger and acquisition process is always time and resource intensive. Immediately after the purchase completes, senior management will look to consolidate and bring costs under control.

Following M&A, IT capabilities may need to scale to support the new business model, with new teams, new offices and new service requirements all needing IT support. Existing delivery and support models may undergo rapid change so a managed service partner can play an essential role in supplementing an existing team, or providing a new IT function.

www.acora.com


Many first-time outsourcers enter into agreements expecting to realise significant cost savings. Managed services are not a magic bullet that reduce IT costs but there are savings to be had – if you look in the right places. It makes sense to look at the RoI in three ways

Managed Services – basic like for like cost comparison Firstly, document what your costs, service levels and hours of coverage are at the moment (current state) and secondly what you need performance and coverage to be in 18 months’ time (desired state) and how much that would cost you internally?

When considering internal costs, ensure you cover all the bases including:• People – salary/NI/travel/benefits/training & development• People – computer/mobile/desk• Equipment – systems and network platforms • Equipment – software and service platforms

Let’s say that the current costs equate to £100k pa supporting your existing employees to a current service level for a 9-5, 5 days a week model.

But your desired state costs include other variables like:• Recruitment to cover leavers• Recruitment to support a specific technology• Company growing at 2 employees a month• You need to invest in a service management platform

That changes your costs to, say, £200K (desired state).

Chapter 3Understanding the RoI of IT Managed Services

Takeaway Choosing managed services does not automatically guarantee notable cost savings – but the return on investment may be greater than it first seems because:

• They can deliver savings for your current state but will provide even more when looking at your desired state

• They provide a risk-free platform and remove the need for “lumpy” increases in your opex or capex

• They enable you to focus you and your team on core business challenges

• An effective MSP can help you transform your IT platform and routines

www.acora.com


If you are after a current state, like for like replacement, there should be some cost savings against the £100k per annum.

There will, however, be more savings to be made against your desired state costs of £200k as internal cost growth tends to be non-linear when compared to using an MSP.

Managed IT Services – consequential savings Equally relevant are the additional savings to be made through having a fixed term contract without any nasty surprises. You won’t need to invest in new service management software, platforms or reporting tools. No training, development or recruitment. In addition, Managed Services provide value in terms of:

Control – defined SLAs, monthly reports, KPIsFocus – your team can turn more attention to delivering business goals Security – reduces pressure on the business to keep up to dateFlexibility – to provide scale and agilityCost predictability – costs that will increase or decrease in line with your growth Risk management – security, systems, change to requirement – all included

The value of an effective MSP – knowledge savings Once in a relationship and through knowledge of your infrastructure they can assist your other IT challenges. An effective MSP can help you transform and scale your IT platform and has IT experts to assist in projects or with new technology, when needed. Think of it as an extension of your IT team.

However, RoI is not straightforward to calculate as the business environment doesn’t stay the same. The current state savings should facilitate the change to a managed services provider but it’s the desired state that delivers the major financial benefit. The strength of managed services is really in the management of variation or change or risk. They bring predictable costs that can flexibly change to meet your changing requirements, aligned to the ability to focus your team on the core business goals.

www.acora.com


Whether you are new to Managed Services and are looking for your first partner or you have come to the end of your existing contract and are looking to change providers, there are some simple steps you need to follow to ensure success.

Build a business caseYour business case for managed service adoption will focus on two key factors:

Driving transformation The most important factor of any business case is understanding how (if) managed services will help your organisation achieve its strategic goals. You must be able to answer the following questions:• How much time will our IT team gain by outsourcing low level

infrastructure tasks?• How much money will be released for other strategic projects?• How will outsourcing improve the experiences of our customers?• How will managed services help to boost productivity and output?• How will an MSP help your business take advantage of new technologies –

and what benefits will that access bring?

Financial impact The financial side of your business case is also a series of slightly shorter – but no less complex – questions:• How much will it cost to transfer a specific service or function?• How much will managed services save?• What will the overall savings be?• What effect will these costs and savings have on your profitability

now and over the longer term?

Chapter 4Getting ready to move to IT Managed Services

Takeaway There are hundreds of managed services providers, each with their own slightly different offering. Make sure that you define what you actually want from an MSP before you start searching for a partner.

If you’re moving providers, make sure you understand why that change has to be made. And if you’ve outgrown your existing partner, don’t forget to include further growth when building your business case.

www.acora.com


Select the right provider Because you are almost completely reliant on your IT infrastructure for operations, the choice of managed services partner is critical. Pick the wrong provider you risk placing your plans (and operations) in jeopardy.

So what should you be looking for in your ideal partner?

Due diligence checklist Your due diligence checklist – from a technical standpoint – should include:• Services offered. Does the MSP actually support the function you need?• Experience. A glossy brochure is one thing, but you need proof that

the MSP can fulfil their promises. Ask to speak directly to one of their existing customers.

• Pedigree. How long has the prospective MSP been in business? What is their heritage? How long have they been in the cloud/managed services game?

• Cultural fit. Ensure that your service provider shares your vision• SLAs. Does the MSP share your priorities? Can they respond to issues

and provide resolutions in the timeframes you specify?• Technologies. If your business hopes to take advantage of the latest

technologies, you need a partner who has experience – and uses them in-house.

• Cost. Does the contract quote fit your budget?• Future proofing. Make sure your MSP can cater for your

future transformational requirements.

Nearly 90% of executives surveyed by the Economist Intelligence Unit believe that organisational agility is critical for business success. Economist intelligence unit 5

5 Organisational agility: How business can survive and thrive in turbulent times – Economist Intelligence Unit – https://www.emc.com/collateral/leadership/organisational-agility- 230309.pdf

www.acora.com


Switching providersBefore trying to identify a new MSP you must first understand why you are changing provider. Has your existing MSP really underperformed, or were your expectations unrealistic? Have you made the mistake of confusing outsourcing and managed services (see section 1)? A good MSP will ask why you are moving provider to ensure you are compatible with their offering.

If you can’t answer the question, you are probably not ready to begin the migration process because you won’t be able to properly define what success looks like, or how you realistically expect to benefit from the relationship.

Another common reason for changing MSP is that you simply outgrow them. Often your needs exceed their capacity, experience and ability to scale in line with your demands. When this happens the MSP will struggle to meet their SLA obligations, or to provide the same quality of support you are used to. There is also a distinct possibility that your IT systems develop to include technologies that are not supported by your MSP. In these cases you have no choice but to seek a new partner.

An easier transition For businesses already using managed services, the transition should be smoother – but there are no guarantees. The scope of work will have a significant impact on the handover between MSPs - are you adding to, or changing the terms of your service for instance?

Before the transition begins you must be crystal clear on the division of roles and responsibilities. What will the MSP do, and what must you do to make the transition a success?

Remember, this is not an outsourcing project, so the MSP will not be doing everything for you. Your team will have to be involved on some level to complete the transition.

Transfer of people & roles One other factor to consider is what will happen to any on-site employees supplied by your existing MSP. Where the employee is dedicated to your account there may be a Transfer Undertaking Protection of Employment (TUPE) issue. Your business may be liable for making redundancy payments to that person if their role is not transferred to the new MSP. You must include the financial implications of any TUPE payments in your considerations.

www.acora.com


Contract negotiations can be like pulling teeth as both parties try to get the best deal possible. Back-and-forth discussions are undoubtedly important – just don’t let them drag on too long or you immediately begin eating into potential savings.

Once you have identified a potential MSP partner, you need to get specific.

The contract – what to look for Every MSP contract is slightly different, but an effective one that delivers what you need should address all of the following issues.

Reporting Unless you experience a major infrastructure failure, the majority of the MSP’s work will be conducted behind the scenes. But “out of sight, out of mind” will not satisfy your stakeholders.

Your MSP must provide activity reports to show how they have been performing against agreed SLAs (see below). You should also request regular reports that help you calculate the value of the service received. Suggestions include:• Calls logged, tickets closed and on-hold.• Performance against SLAs – response and fix times.• Performance of the managed infrastructure.• Other activities completed (software updated, security fixes applied etc).• Capacity utilisation to provide early warning of resource issues that will

require additional funding or upgrades.

You should also encourage your MSP to submit strategic recommendations on a regular basis.

Chapter 5Securing the Contract and Internal Readiness

Takeaway When it comes to drawing up a contract make sure you consider the following essential factors:

• Reporting on service delivery

• SLAs that meet your operational priorities

And don’t forget to prepare your business for the cultural and operational changes that outsourcing services cause.

www.acora.com


SLAsAn MSP will generally offer a standard service level; a four-hour window to fix general support issues for instance. But these SLAs are open to negotiation according to your operating requirements and strategic importance of the system in question.

The specifics of the SLA will vary between organisations. It is not uncommon to have a 15-minute response to incoming calls for support, and a 4-hour fix time for instance. Obviously, the quicker you require response/resolution, the more expensive the contract becomes – especially if you want on-site support included.

Before approaching an MSP you should seriously consider the service you are handing over to your MSP, its importance to your operations, and the maximum time you can tolerate an outage for. You are then prepared to negotiate the specific terms of your SLAs.

Other things to discuss when negotiating your contract include your contract period (I, 2, or 3 years), a termination clause, penalties for poor performance and service credits for failing to comply with SLAs.

Preparing your business for changeWorking with an MSP will require a cultural change in the way users view and consume IT. This is a key message to communicate to the business before transition. You (and your employees) must accept two key facts:1. Initial response times will be slower than when the service was managed

in house.2. Staff may have to play an increased role in troubleshooting and resolving

issues as most support will be provided remotely.

For the end user, these changes will be seen as a negative – despite the fact that the MSP will resolve issues just as quickly as before. It is down to your organisation to explain the reason for the change – to save money and prepare for the future. You will also be responsible for enacting the cultural change required to make the outsourcing a success.

The earlier you can address the cultural issues, the sooner you can begin the technical process of transition. Again, delineating responsibilities between you and your MSP will be crucial, ensuring that everyone know what is happening, who is responsible, and the correct order of events required to complete the move.

www.acora.com


In an ideal world the transition to managed services would be so seamless that no one notices any difference. But the reality may be slightly different – particularly as you need to shape end-user expectations to accept forthcoming changes. Make sure you find an MSP with a robust transition process.

Timeline The actual timeframe for completing a managed services transition will depend on several factors including:• The service itself• The complexity of the service• The volumes of data• Any internal constraints (resource availability, business priorities etc)

In practice, this looks like:1. Contract terms agreed and work begins.2. Assessment of current provisions, and resources required to

complete the transition.3. Small-scale roll-out of managed service to provide proof of concept

to your stakeholders (if possible).4. Staggered roll-out to the rest of the organisation.5. Initial assessment of performance and testing against SLAs.6. Enhance and improve operations using agreed benchmarks to ensure

that the service meets your needs.

You should then schedule weekly/monthly check-ups to verify that standards are being upheld and address shortfalls as quickly as possible.

Chapter 6Transitioning from the Current State

Takeaway The transition to managed services is a crucial process. To simplify you should:

• Agree a workable timeline – and attach financial penalties for non-delivery where appropriate

• Again, ensure your employees are aware of how things are going to change, and manage their perceptions accordingly

• Meet your obligations – a successful contract requires input from both parties

• Keep stakeholders informed about progress of the transition

• Act on advice from your MSP – they are working on your behalf to improve operations

www.acora.com


Dos & Don’tsHow can you get make the transition as smooth as possible? Here’s some dos and don’ts to bear in mind. Dos• Remember that your MSP will not be doing everything – your team

will also play an important role in the transition.• Know your responsibilities and ensure they are met – otherwise the

migration will fail.• Get your end users onboard – things are going to change, and there

will be a bedding-in period during which quality of service may be affected temporarily.

• Keep track of SLAs and milestones to ensure your MSP is meeting their obligations.

Don’ts• Don’t assume your MSP will do everything – that’s not how the agreement

works, and your project will suffer.• Don’t just expect your end users to “suck it up” – they need to understand

why the transition is taking place, what is involved, and how things will change in future.

• Don’t miss project milestones – it is your infrastructure and operations that will suffer, not the MSP’s.

Surviving the first few weeksThe first few weeks of any new system (internal or managed) will involve disruption of operations and expectations. Obviously planning and testing in advance should help to minimise disruption, but there is always potential for something to go wrong.

Ensure that you maintain close contact with your account manager at the MSP; they are your champion, flagging and prioritising issues for resolution. This relationship will help you navigate the first few weeks as smoothly as possible.

When something does go wrong, make sure that inquests into failure are saved until after the transition has completed. You do not have the luxury of assigning blame in the middle of the project – these issues can (and will) wait.

Finally, keep internal stakeholders and end users updated as to migration progress. You need their buy-in for the long-term success of your outsourcing agreement, and regular updates will help secure it.

www.acora.com


Getting the most from your contractGiven that most MSP contracts run for three years, it is essential that you identify what you want now and into the future.

You need to ensure you are receiving the service you paid for. Don’t ignore the regular reports provided by your MSP as these will show areas of underperformance. Instead, use them to facilitate discussions on how performance will be improved over the next week/month.

To simplify communications about service provision, appoint a single person to liaise with your MSP’s account manager. This will help to ensure that issues are managed more effectively.

Ultimately, you will get out what you put in when it comes to managed services contracts – but you need to put the effort in early to ensure you maximise those returns.

ConclusionChoosing to go down the managed services route is a strategic business decision and one that should not be taken lightly. Make sure you do your research first and understand the benefit and risks.

This ebook is designed to help you with your decision making process. Follow the key points below and you will be well on your way to ensuring a successful long-term partnership with your new MSP.

5 key pointersDon’t forget that managed services are not simply about saving money.

Choose carefully – do you need a managed service or a fully outsourced service?

Calculating RoI is difficult – but it’s the only way to ensure you will receive value for money.

Use the due diligence checklist (page 15) to assist with the MSP selection process.

Ensure you understand the division of tasks and workloads between you and your MSP.

12345

0844 264 2222 [email protected]

© Copyright 2018 Acora. All logos and trademarks of third parties used by Acora are registered trademarks of the relevant third parties and are used by Acora under license from such trademark holders. All titles, content, publisher names, trademarks, artwork, and associated imagery are trademarks and/or copyright material of their respective owners. All rights reserved.

Head OfficeAcoraAcora House Albert Drive Burgess Hill West Sussex RH15 9TN

West MidlandsAcoraPegasus House1 Cranbrook WayShirleySolihullB90 4GT

If you would like to find out more about how partnering with Acora can help transform your business, you can contact us via phone, email or through our website. Our team will be happy to help.

The Definitive Guide to IT Managed Services Edition 1 – November 2018

About Acora Acora is a specialist provider of managed services to the mid-market. More than 200 clients trust us to take responsibility for part, or all, of their business IT.

Our flexible, high value managed services cater for your end user or infrastructure management requirements. They enable you to run an efficient and innovative IT operation that scales and flexes quickly, without investing in the capital or headcount that such an operation would normally require.

We will deliver within budget, security and compliance parameters, so you can focus on your business goals.