A major initiative over the past several years is for IT companies to lock in “Managed Services” contracts with companies for 1-5 year terms. (Go to any of the various IT providers in your area and you’ll see the “Gold” plan, the “Platinum Service Plan”, the “A” plan, and whatever clever term the marketing department came up with that particular week).
Why IT companies want to lock companies into a long term contract:
- Stability: Steady income provides stability to their business and makes budgeting easier with a steady flow of cash.
- Increased Valuation: An arsenal of contracts makes an IT provider worth more money and is easier to sell to a prospective buyer.
- Profitability: Moving companies to a cookie-cutter platform allows for some economies of scale to work for them to improve profit margins (Same anti-virus, email solutions, back-up, etc).
- Staffing: With predictable contracts, staffing is aligned to best-practice metrics of profitability which leads to some output of customer service/experience (good or bad).
What happens when you get stuck?
Service levels decrease, your environment is “down” for over a day or two, and yet you have 19 more months left with this struggling company?
Traditional Managed Services contracts are really great for the IT provider but are they great for the client when things get bumpy or bad?
Your business productivity is too important to suffer down time on a regular basis or deal with a non-responsive company or pushy sales people. It’s important to choose wisely before locking into any long-term contracts and make sure to have an “out” clause that doesn’t penalize too severely.
You deserve great service, great uptime, technology that adds fuel to your business and productivity, and to work with people that you actually like. Your partners should truly be partners and have a laser focus on making your business or organization better.
We elected to give clients the option to have the benefits of Managed Services without the contract. If we don’t deliver and address the bumps that can and will happen, we should be fired.
Most companies simply want their “stuff” to work and know they have a great partner that will not only keep the lights on but also help innovate with them for the future.