MSP Does NOT mean “Hand Over the Keys”–Part II

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Before I get started, let me wish everyone a very happy, healthy and safe 2016.  Now is the time to come up with your New Year’s resolutions.  Last month I ranted that MSP does not mean “Hand over the Keys” so consider this:  resolve to “repair” any Managed Services Provider (MSP) relationships that may need improvement OR start planning NOW for one you may be entering into later in the year.  If you think you can’t get fired by setting up an MSP that fails, think again.  I’ve seen it happen many times and worse yet it can take years to fix while tremendous credibility and trust is lost for your entire organization. 

Here are several reasons why MSP relationships fail:

  • Lack of Trust – HBR
  • Lack to two-way information sharing – NAPM
  • Ineffective mechanism for conflict management – Gartner
  • Lack of flexibility in SLA; not supportive of partnering philosophy – Booz & Company
  • Lack of mutual benefit – HBR
  • Lack of clear, shared goals – Gartner
  • Poor up front planning – HBR
  • Lack of top management support – EVERYONE

These are just a few of many, many reasons all of which can be remedied or avoided altogether.  If you are in a relationship today that is failing take action now (as your New Year resolution) to fix it.  The longer these issues linger, the worse they get.

If working with an MSP is on your agenda for 2016, immediately start planning.  Here are three big questions you need to consider:

  • How you are going to implement the MSP solution within your organization?
  • How will you ensure that the MSP is accepted within your organization and the solution is ADOPTED? Remember zero ADOPTION equals zero ROI
  • How will you manage the relationship?

You may be sitting there thinking – is that all?  If you are – get out now before you are the next casualty.  If you realize that doing this right from the start is critical then please read on. 

Implementation

Start with the plan.  Implementation is a project in and of itself so formal planning is important.  Identify the tasks (use the MSP – they have done this many times before and should have at least the start of a plan), determine the resources needed (make sure the MSP provides resources as well) and nail down the appropriate timeframes.   If you have not done so already, put your mutual service level agreements in place with the MSP and get everyone to agree to them.  Don’t forget about communication – it will be critical during this phase so make this a planned priority.  It will pay huge dividends.  Execute to the plan and keep all your key stakeholders engaged and involved.

Acceptance and ADOPTION

Using a Managed Service Provider will be a major change for any organization, therefore it must be treated as such.  Yes, I’m going to talk about change management (please don’t roll your eyes) but only because it is necessary and it works.  Getting all your key stakeholders on board and engaged from the start – from  making the decision, to selecting the MSP to playing an active role in the implementation is critical.  If you have been through one of The Mpower Group’s Universities then you already understand the importance of managing the change and you have a framework and set of tools at your disposal – USE THEM.  If not, call us (we’d be happy to help 😀 ).

Managing the Relationship

This is where the rubber meets the road.  Take a look at the failure list above and use it as guide to deal with those challenges up front.    Remember the mutual SLAs that were developed earlier in the process – use them to guide and measure the relationship from Day One.   Many people think that SLAs are only used when you do not have trust in a relationship but the exact opposite is true.  Mutual SLAs allow each party to articulate what is important to them and creates mutual understanding.  A good MSP will not only appreciate this but will insist on it.

Here are a few tips to successfully manage an MSP relationship.

Define Roles and Responsibilities – This sounds simple but it’s not.  There should be three primary roles established – 1) Relationship manager (from the client side), 2) MSP relationship manager and 3) Oversight committee (executives from both the client and MSP) to resolve significant issues only and provide guidance when needed.  The two relationship managers should be the primary points of contact and should have both the competency AND authority to make daily decisions.   Use a RACI chart to decide which decisions can be made by each party and the enforce it.  Don’t allow either party to do an end-around the process – that will lead to chaos and even disaster.

Utilize Relationship Principles – These are rules under which the relationship will be governed. They should be developed together by both parties and should include implications of each principle, the rationale behind it and the penalty for violating the principle.  These can be extremely valuable and are not used often enough.

Define an Issue / Conflict Resolution process – What happens when an issue cannot be resolved by the relationship managers?  Where does it go?  Who is on the hook to resolve it?  We know that issues will arise so determine up front how they will be handled.  This will accelerate the decision making process significantly.

Manage to Outcomes – Not Activities from Day One – Managing an MSP is NOT like managing an employee.  If you plan to manage activities then don’t bother hiring an MSP, that is their job.  The relationship manager from the client side needs to manage outcomes not activities.  Make sure that person has the competency AND resources to do so.  Very often the relationship manager is the person who ran the function internally – that may not be right person under an MSP. 

Hold Executive Accountable – Define the role of the executive and hold them to it.  The key role is to support the relationship manager NOT manage the process.  If you allow the other party to do an end-around the system you will have a real mess on your hands.  Also, LISTEN.  If your relationship manager is raising red flags, pay attention to them.  Remember, where there is smoke there is fire – catch the fire at the beginning to avoid a disaster.

A well-managed MSP relationship can add significant value to both sides and it is in both parties best interest to create a strong relationship.  Just remember that hiring an MSP does not mean “Hand Over the Keys”. 

Join in the conversation and let us know what you think. 

 

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Anne Kohler
Anne has been leading consulting and financial management organizations for over 25 years. She has extensive expertise in Strategic Sourcing, change management, contracting & contract management (both the buy side and sell side) organizational design and supply chain management. Anne has a passion for collaborating and educating her clients while helping them to uncover hidden value in their organizations. In addition, Anne has been named by Supply & Demand Chain Executive as a “Top 100 Provider Pro to Know” every year since 2007 and a 2013 Top Female Supply Chain executive.
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