Managed Service Providers, Where Quality Decreases and Prices Don’t

Published on July 18, 2018

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Traditional Managed Service Providers (MSP’s) can at best be described as vampiric, sustaining themselves off the lifeblood of their clients, why and how can this be normal and can this repetitive theatrical performance avoided.

Lets break down the MSP performance.

Most people know the adage: “We offer 3 kinds of service: good, cheap and fast; but you can only have two”.

Act One: Cost

Services are outsourced to MSP’s is usually a fixed unit price, monthly service that is intended by the consumer to provide a quality service, budget stability and all at a cost effective rate. This is balanced against the need to provide staff, support, training, coverage of having a task or service maintained internally by the organisation.

Key business outcome: be cheaper than doing it ourselves and be static in costs.

Act Two: Fast

Service level agreements (SLA’s) define how fast services are expected to be provided, what is provided and even penalties if they are not met.

Key business outcome: set a business acceptable standard that the service provider will achieve while providing the service.

Act Three: Good

The service may also be defined as part of the SLA to specify what the minimum requirements expected for the services being provided.

Key business outcome: define the service expected and its outcomes.

Finale: The Downward Spiral

Traditional managed services must always end in this spiral and I have yet to know any MSP which does not have this as a result of its own profit targets. How can it be more profitable if revenue pricing is fixed for a term, it has to reduce costs and quality as a result.

With price fixed, and SLA’s setting the time frames and the service itself there is only one inevitable outcome for the service; decreasing quality without affecting key measurement metrics if possible and MSP’s do this in several ways:

  • Use cheaper resources to do skilled work – save costs
  • Action the minimum necessary to meet requirements – save quality
  • Action the minimum possible to achieve resolution – save time

The result: Ever decreasing quality to the absolute minimum acceptable

Encore: The Solution

Services provided as part of a packaged consulting solution, where skilled and specialist consultants are engaged on a regular basis to ensure input to short term, long term and strategic goals and their setting not just the base defined service an MSP provides.

The Managed Consulting Service model has elements of MSP as it can provide a service or fixed outcome but the real star of the performance is the Consulting focus rather than a simple outsourced service. Where MSP’s often allude to consulting as an up sell of their service the use of decreasing cost resources results in limited capability to leverage any insight a skilled consultant would bring.

Great Engineers Are Seldom Good Consultants

Consultant is not just a title on a business card: Engineers DO, but Consultants DO and also THINK, RECOMMEND, DISSCUSS, ENGAGE, SUGGEST as if they were part of your business. Consultants see things from within your business’s viewpoint. Either can complete tasks required to support a service or deliver a project task but which is really going to support you and your business goals?

Key business outcome: Outcome focused consultative specialist support.

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