How to Better Measure your Managed Service Provider

Custom KPIs Go Beyond SLAs to Capture Additional Value

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Binding you as an enterprise customer to a managed service provider (MSP) is a comprehensive legal document that contains terms, definitions, coverage, protocols, procedures and more, including at its heart, a service level agreement (SLA).

Detailing key measurements that enable contract enforcement, SLAs are designed to ensure that customers get what they expect, especially in terms of service availability, and that service providers understand their responsibilities. But while SLAs are vital to a healthy managed service strategy, they don’t ensure that you are capturing all the value you can from this relationship.

SLA and KPIs

Businesses hire MSPs for many reasons. The top one, according to a list generated from a survey last year of 400+ U.S. enterprises, is reducing security risk. Then there’s keeping up with technology, optimizing operations,

assisting with cloud technology, helping a business focus on its core, reducing cap ex, acquiring skills, freeing up staff to work on key projects and consolidating multiple SLAs.

If you are working with an MSP, some of those reasons may look familiar. But you’ll notice that your SLA does not cover them all. Risk measurement, for instance, can be a matter of its own. Some of the other reasons are associated with tasks that may be in the scope of work but not part of the SLA itself.

The point is that an SLA does not measure everything of value. To help determine whether your MSP relationship is on track or not, consider building out a few customized, key performance indicators (KPIs). While usually associated with an organization’s internal operations, KPIs in this case can also help you see whether you are realizing your original goals in working with an MSP.

New Tech, Core Mission, IT skills

If you moved to an MSP to help keep up with technology, for instance, how would you measure this? You could benchmark the age of equipment and versions pre-provider vs. post provider. If it’s emerging tech you’re assessing, an MSP acting as a consultant should help you reduce your open-ended strategic questions. Is that number going down?

Maybe one of your goals was to let team members tackle some important projects. This is a common aspiration, but much less commonly realized. Try some benchmarking KPIs. How many projects did they accomplish before you partnered with an MSP vs. after partnering? Or how many staff have you redirected since the MSP arrived?

Did you turn to an MSP because of a skills shortage? Lack of IT skills is a pervasive challenge, and working with an MSP can help. How many open job requisitions did you have before beginning to work with the MSP? Are those reqs still open, or is the number going down?

When creating custom KPIs, make sure that what you are measuring provides a full view of the value you are receiving. When done right, these additional metrics can help you stay on track with the reasons you decided to work with an MSP in the first place.

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