Community IT Innovators Nonprofit Technology Topics

Talking To Your MSP Managed Service Provider

February 02, 2024 Community IT Innovators Season 5 Episode 5
Community IT Innovators Nonprofit Technology Topics
Talking To Your MSP Managed Service Provider
Show Notes Transcript

How to Communicate to Create a Great Relationship

Community IT gets this type of question a lot from nonprofits in our community: My MSP doesn’t talk to me about what they are doing and why their rates have gone up. How can I talk to them to understand what they are doing, when I don’t have a technical background?

Johan Hammerstrom, our CEO, addresses communication issues, consolidation and private equity acquisitions in the MSP sector, ways to approach your existing MSP outsourced IT provider, and issues to consider when you are searching for your first MSP or a new MSP. Community IT has also created the “Nonprofit Guide to Vetting a Managed IT Service Provider” free download to help you make informed decisions on your outsourced IT vendor.

Learn how to build a good relationship with your MSP, and when to look for a new partner.

Full transcript:

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Thanks for listening.

Carolyn Woodard: Welcome to Community IT Innovators podcast. My name is Carolyn Woodard. I’m the Outreach Director for Community IT. And I’m here today with Johan Hammerstrom, our CEO. 

We’ve had a question come in a couple of times recently that I wanted to get your opinion and tips on. 

How Do You Talk to Your MSP When Things Maybe Aren’t Going so Well? 

Some kind of communication breakdown has happened, maybe the prices have gone up, or you’re not getting the customer service that you were expecting, or there’s something else about your relationship that’s not going well. As an MSP, how would you like our clients to talk to us and make sure that we’re communicating well?

Johan Hammerstrom: I think you’ve hit the nail in the head. Communication is the key. It’s really important to have an open line of communication with the MSP that you’re working with. And if you have any sense that things aren’t going well, I strongly encourage you to reach out to your MSP as soon as possible to communicate that to them. 

If you’re working with an MSP that’s going to be a good fit for you long-term, they will respond to that outreach. And if you’re working with an MSP that is not going to take that to heart and respond to it, it’s better to find that out earlier in the process. It’s good to raise concerns as soon as you have them. If you’re working with a quality MSP, they’re going to be so happy that you did. 

I don’t like hearing critical feedback from our Community IT customers, because it means we’ve dropped the ball, but I much prefer that to NOT hearing the critical feedback. So I always welcome feedback from every one of our customers if they have concerns or issues with the service that we’re providing.

Carolyn Woodard: Do you have advice for someone who’s tried reaching out and maybe isn’t getting a good answer or maybe isn’t talking to the right person at their MSP?

Johan Hammerstrom: I think generally speaking, your relationship with the MSP should involve a primary point of contact. On the customer side there should be a point of contact who is responsible for managing the MSP and managing the relationship, the vendor management. 

On the MSP side, there should also be a primary point of contact. At Community IT, that primary point of contact is a role we call the IT business manager. They’re responsible for overseeing all of the technical service delivery that we provide to a particular organization. Other MSPs may call that a VCIO role or a customer success specialist, customer care specialist, but generally it’s someone with a technical background who is involved in overseeing the delivery of technical services from the MSP to the customer.

So that’s the person to start with, but sometimes that relationship is the relationship that’s the problem. Then you really want to escalate to the either the account management team or the customer service department. The MSP should have a team that’s non-technical, that’s concerned with customer service. Your best contact may be the person who manages or oversees the contract, and maybe someone that you hear from when the contract is up for renewal. Hopefully that person introduced themselves to you when the relationship began. But if you’ve been working with the MSP for many, many years, it’s possible that you haven’t reached out to that person. If you don’t know who to contact, and if it’s just not clear from invoices or from the MSP’s website, I would ask your primary point of contact. “Hey, I’d like to talk to someone in customer service about, you know, some concerns we’ve been having.”

Carolyn Woodard: Well, and you also probably have a contact at billing, right?

Johan Hammerstrom: Yes. Exactly. Don’t be shy. Reach out to whoever you can. And at some point, you should be talking with a customer service person.

Carolyn Woodard: And this probably is something that, of course, for Community IT, this happens in contracting or when we’re first working with a client, and we have a whole onboarding process where there’s a get-to-know-you meeting where everybody is in the same meeting. But I think not knowing the best contact probably comes up if you’re coming into a position at an organization and they already have an MSP, so maybe you weren’t part of that initial meeting. 

Do you have advice on how to introduce yourself, or go back and look at the contract or talk to somebody at the MSP, or when you’re renewing, just to make sure that you’re on track with everything that’s going on?

Johan Hammerstrom: Yeah, that’s a great question. We have a defined process. We call it our primary contact transition process. If our primary contact at the customer transitions and we have a new primary contact, we proactively schedule a meeting with our account management team to do those very things. Introduce ourselves, review the contract and how it works, and go over how to get support and who the key players are. 

If you’re new to an organization and you’re in the position of being the primary contact for the MSP, you should request that meeting. Just say, “Hey, I’d like to speak with someone on your account management team to better understand the contract and the account. And I’d love to get an introduction to the company.”

Carolyn Woodard: There’s a tension, right? Because of course it’s the MSP’s job to know the technology and you may not be a highly technical person, but you’re the person that’s the contact for the MSP for that relationship. And I know we talk a lot about this, but it shouldn’t be a black box. We firmly believe you shouldn’t have an MSP that’s just telling you, “Don’t worry about this. We’re taking care of everything. Just pay the bill, basically.” 

Do you have any tips on having that conversation if you’re not a technical person, trying to get enough understanding out of the MSP for what you need to know about what your organization, what your half of the bargain is as well, the things that you need to be doing to work well with that MSP?

Johan Hammerstrom: At the end of the day, the job of every MSP is to make sure that the technology that’s being managed is meeting the customer’s business needs. If the technology and the service around the technology isn’t meeting the business needs of the organization, then something’s not working right. And it’s the customer’s job to articulate those business needs. 

The worst thing an MSP can do is make assumptions about what the business needs are. And the second worst thing that an MSP can do is not care what the business needs are. Then they’re just throwing technology at the organization without really thinking about whether or not it’s meeting the business needs. 

Hopefully you’re working with an MSP that isn’t making assumptions and does care. But if things aren’t working right, it’s likely that they don’t have an accurate understanding of what the business needs of the organization are. If you’re new to the position, maybe the business needs have changed. You may be new because of changes that are taking place at the organization.

If you’re new to the position, maybe if you’re in a leadership role in the organization that is making changes to how the organization functions, it’s really important to communicate that to your MSP so that they understand any shifts that are occurring in the business needs of the organization. 

I think oftentimes when the relationship breaks down, it’s because things are changing on one side or the other, either the technology’s changing and it’s not being effectively communicated to the customer, or the customer’s business needs are changing and that’s not being effectively communicated to the managed services provider. That usually lies at the heart of a lot of conflicts and a lot of lapses in service. So that’s a critical thing to communicate.

Carolyn Woodard: The last question, I know there’s a lot of consolidation of MSPs. There are MSPs being purchased by other MSPs that are getting larger. What is a good thing to do if you find out that your MSP has been sold?

Johan Hammerstrom: Most consolidation right now in the MSP industry is being driven by private equity. There’s a ton of money in the private equity space and it’s looking for a return on investment. It’s looking for [profit], and it’s not finding it in the stock market and it’s not finding it in other traditional investments. And so private equity is out there looking for places to maximize return on investment. And for a decade now private equity has viewed the MSP space as a lucrative source for return on investment. 

So what private equity will do is it’ll come in and find a pretty large MSP that’s successful and it will invest in it to grow and that MSP will go out and acquire smaller MSPs and bring them under the umbrella of the larger MSP.

Most MSPs have at most one year contract terms with their customers. And so they need to make sure that they don’t lose all their customers right away. Usually they’ll leave the existing MSP largely in place. You’ll see the same support staff that you’ve always seen, you’ll have the same small business owner, overseeing that division of this larger MSP. And at first things will feel kind of the same. 

Then they start to turn the screws, because the goal is to maximize profit. So they’re going to start raising the rates, the quality of service potentially could go down. They’re going to start replacing the smaller service delivery team with a larger more generic service delivery team from the larger MSP. That works for a lot of organizations. It’s not necessarily a bad thing. But they will continue to raise the rates because at the end of the day, their goal is not to keep all of the customers. The goal is to maximize the profit that they’re getting from the customers who stay.

We’ve seen this over and over again (from incoming clients unhappy with their previous MSP) where it’s pretty much the same playbook. The first year is fine. Nothing’s really going to change. And then starting in the second year, the rates start to go up and quality of service starts to go down. And at the end of the day, the private equity doesn’t really care about keeping customers. They care about making money. That’s their goal. They’ll start to lose customers and they’ve got the whole system optimized to know exactly how many customers can they lose to maximize the profit that they’re getting.

If your MSP has been acquired by a larger MSP, find out who’s acquiring them. Not every MSP gets acquired by a private equity backed platform rollup MSP. But those that do, they aren’t going to tell you what their strategy is or they’ll make it seem like it’s not that big a deal, but I would start to look for those warning signs (higher rates and new staff).

And as soon as you start to see those changes, really think about what can you honestly tolerate as an organization and is it worth going through the trouble of finding a new managed services provider? 

I would be especially wary of upselling. A lot of more aggressive upselling posture tries to get you to buy more services than you really need. 

And I would also be concerned about lock-in. So this is not as much of an issue now as it used to be, but in the MSP space, it’s possible that you’re getting locked in. 

One of the worst examples we’ve seen of this is if you’re purchasing your file sharing solution from your MSP, so you’re not storing files in a Dropbox account that you own or in a SharePoint account that’s tied to your main Microsoft account. You’re storing your files in a solution that’s being provided by your MSP and you’re paying for that on the invoice that you’re getting from the MSP. That is a dangerous situation to be in because either they’re locking you into working with them if you want to continue to have access to your files, or they are going to charge you a lot more (to get access to your files) if you leave and go with a different MSP.

So that’s just one example, but if there’s any technology lock-in at all with your MSP and you have any concerns, that’s something I would focus on. And if you’re using a file sharing solution that’s being provided by your MSP, I would let them know that you’re interested in having one that you own. No customer should be locked into anything that an MSP does. I guess, is there a diplomatic answer to that question?

Carolyn Woodard: I feel like this is a good point to jump in and say that we do have a free download on our site with the 12 questions to ask an MSP when you’re going through a vetting process if you want to change MSPs for any reason – because they’ve been acquired and the rates are going up, because the communication is challenging and there’s just no way to salvage the partnership. For any host of other reasons that you might want to change – when the pain point of staying with your current MSP has gotten to a point where the pain of changing MSPs seems like a lesser evil. We do have this download with 12 questions to ask ranging from like who answers the phone to how they’re going to partner with you on strategic planning and kind of what service they have around helping you with being strategic about the IT that you need, that meet your business needs as you were saying.

So I think we’ll leave it there. Thank you so much for your time today, Johan. I really appreciate these tips on dealing with MSP from the other side of the fence.

Johan Hammerstrom: It was my pleasure. Thank you, Carolyn.

Carolyn Woodard: Thank you.