A BUSINESSPERSON’S GUIDE TO | IT SERVICE PROVIDERS WWW.YJTSOLUTIONS.COM

A BUSINESSPERSON’S GUIDE TO IT SERVICE PROVIDERS Making the Right Decision for Today and Tomorrow

WWW.YJTSOLUTIONS.COM The Purpose of This Guide

As your uses more and increasing varied technology—including desktop PCs, laptops, tablets, smartphones, servers, storage, network infrastructure, on-premise applications, cloud applications, and more—the way you manage all that technology becomes more critical. That’s because:

• You need IT to run smoothly. The more dependent your people – and your customers -- become on technology, the more important it becomes to keep that technology up and running 24x7x365. Technology downtime kills and disappoints customers. No can afford much of either.

• You need to minimize IT costs. Technology is only benefcial insofar as its benefts exceed its costs. Also, have limited operational budgets, so every dollar that can be saved on IT can either be allocated elsewhere or go to the bottom line.

• You need to optimize the benefts IT delivers. IT success isn’t just about keeping the lights on and driving costs down. It’s about achieving a level of excellence that gets incorporated into an ’s culture and then refected in that organization’s growth. That excellence includes continuous technological for competitive advantage, applications that are snappy and mobile instead of sluggish and non- portable, tech support that really resolves people’s tech problems instead of just putting temporary band-aids on them, help desks that really “help,” etc.

Managing technology, in other words, is much like managing people, , supply chains or anything else. If you do it effectively, effciently, and excellently, your business wins. If you don’t, your business loses.

An exponentially increasing number of businesses are engaging with IT service providers to help them achieve their technology-related objectives—which typically include greater cost- effciency, higher service levels and the ability for internal IT teams to focus on innovation rather than routine maintenance and support.

However, choosing the right IT service provider isn’t easy, and many businesses make a mistake the frst time they choose an outsourced IT partner. There is a dizzying choice of potential partners—all of whom make similar claims and use similar language to market their services. But the reality is that their business models and their capabilities vary considerably.

Before reaching out to any potential service providers, frst make sure you have chosen the right service engagement model out of the many that are available today.

This guide will help you better understand your choices in terms of categories of service providers so that you can then fnd the particular partner that best meets your company’s needs today—and hopefully for the long term.

2 A BUSINESSPERSON’S GUIDE TO | IT SERVICE PROVIDERS 1: Clarifying Your Needs

Before shopping for an IT service provider, it’s a good idea to clarify the needs of your business. Every business has diferent needs— but, generally speaking, your requirements will likely ft into one or more of the following categories:

Help desk/User support

In today’s high-pressure, round-the-clock business environment, many businesses are fnding that maintaining an internal help desk is a losing battle. Employees are working remotely, at all hours, from all kinds of devices, from varying locations, and with varying types of connections. Businesses are also recognizing the high cost of having unproductive employees due to a technology problem, which often is completely unrelated to whether or not the data center is “up.” The demand for a true 24x7 help desk, coupled with the increasingly wider scope that help desks must cover, has made outsourcing IT help desk/user support increasingly popular, since few businesses can afford to staff a three-shift internal help desk with all the subject-matter expertise, coupled with the software, tools, and rigorous processes necessary to solve the many different tech problems people commonly encounter.

Factors to consider when looking for help desk/user support:

• Are you comfortable with a service provider that operates its help desk offshore? Or partially offshore? • How important is it that your service provider will be on site when needed? • What kind of response times do you expect for helpdesk calls? • What is their First Call Resolution Percentage? i.e. Do you expect the majority of issues to be resolved by the person answering the phone, or is it acceptable for a ticket-entry person to collect information and then hand off to a technologist for further investigation? • Is desktop (patches, upgrades, etc.) and virus protection/management included in their service? • Do you want your employees to be able to call the help desk with any technical problem, or will the scope be limited? How will the out-of-scope problems get handled? • Do you want your employees to be able to call the help desk at any time? From anywhere, including their homes and remote sites? • How is pricing structured? By ticket, by device or by person? What is out of scope? • What kind of reporting and insights are provided from the data collected over time from the help desk? • Will you meet with your provider in person to review this information and to plan an appropriate roadmap for improvement?

It’s also important to note that your needs are almost certain to expand over time. Most businesses don’t go “all in” when they frst start with an IT partner because they want to make sure they can get good service at a good price before making a big commitment. On the other hand, if you have a good initial experience with a partner, you will probably want to expand your engagement with them instead of having to shop for another service provider to meet your other needs.

Consequently, in evaluating potential partners, it’s a good idea to consider all of the needs you’re likely to have over the next 3-5 years—rather than focusing too narrowly on just what you’re looking for today.

3 A BUSINESSPERSON’S GUIDE TO | IT SERVICE PROVIDERS Infrastructure monitoring and management

These services focus on ensuring the health of your servers, storage and networking equipment. Your partner should monitor this equipment on a 24x7 basis and take immediate corrective action if a problem occurs. Ideally, your partner will be able to head off problems and prevent downtime by watching trends and anomalies that indicate trouble is brewing.

You may also want a partner that can make suggestions about how you need to upgrade or evolve your infrastructure as your business grows.

Factors to consider when looking for infrastructure monitoring and management help include:

• Will the service provider complement internal IT staff or take full responsibility for the health of your IT infrastructure? • If the latter, what is the technical depth of their engineers? Does the service provider have key man dependency of their own in certain technologies? • What tools are used for monitoring? What are examples of what can / cannot be monitored? • What kind of response times will you expect in the event of an outage? • Will you need someone to come on-site if necessary? • What kind of reporting do you want to receive so you can maintain visibility into the health of your IT environment? • Will your provider review these reports with you in person to design appropriate continuous improvement plans?

Fixed-term IT projects

Businesses often need outside help with specifc fxed-term projects. These can include infrastructure transformations such as cloud migrations, moving to virtual servers, deployment of new applications and databases, security overhauls, offce moves, etc.

Factors to consider in choosing a partner to assist with fxed-term IT projects include:

Is your service provider competent in the areas in which you need help? Can you speak with multiple references for similar projects? What is their track record for successful project completions? How will the service provider charge for the work? Fixed fee or time-based? How will changes in specs or scope be addressed? Do you want to make any prospective partner responsible for the ongoing operation of the deliverable after the initial project is completed, and if so, what is their track record of supporting similar environments?

4 A BUSINESSPERSON’S GUIDE TO | IT SERVICE PROVIDERS 2: The Service Provider Landscape

One of the great things about our is that one company’s challenges become another company’s opportunities. That’s why so many IT service providers offer businesses the ability to offoad their technology headaches.

As noted above, however, IT service providers have very different business models and very different capabilities, so you have to carefully consider a variety of factors in selecting an IT management partner.

First and foremost, it’s important to choose a service provider whose business model best aligns with your objectives.Generally speaking, these IT service provider business models can be classifed into six categories:

Staff augmentation Under this model you are provided with additional staff on a temporary (but usually full-time) basis from a company that maintains an ongoing inventory of trained, qualifed IT professionals.

Pros Cons • Spares you the time and effort of recruiting and hiring the IT • Can be the most expensive model - You pay a premium on talent you need personnel costs and still have costs of management, tools, • Eliminates HR issues such as on-boarding, benefts software, and process development administration, and termination • Limited coverage of skillsets – Similar to hiring internally, you • If you’re not satisfed with an individual’s work, you can simply have to pick the most important skillsets for general coverage. ask for someone else Usually not able to fund resources across all requirements. • Works well for specifc, focused, and one-time IT projects • Still need to provide management oversight and Service Desk management and tools. • Single shift only – or premium charges for staff on nights and weekends • Knowledge leaves with each individual • Does not address risk of dependency on a single person

Managed hosting Under this model your IT infrastructure is hosted at a service provider’s facility and the service provider offers management of that infrastructure as a -add.

Pros Cons • Management costs can be reduced in the short term due to the • Incomplete solution when looking for outsourced IT help. hosting provider’s economies of scale Limited management and support scope (for example, • Better physical security and operating environment for IT does not typically include end-user support or end-to-end equipment troubleshooting) • Rapid access to failover equipment in case of a hardware failure • Focus is on upselling additional rack space • Usually provides high-quality infrastructure at a total cost of • Can result in vendor lock-insince it is diffcult to re-locate IT lower than building an on-premise data center equipment to another provider solution • Can add unpredicted costs by requiring you to use their service provider staff for any and all tasks (“nickel and diming”)

5 A BUSINESSPERSON’S GUIDE TO | IT SERVICE PROVIDERS Consulting/SI frms with managed services offerings Under this model a frm primarily focused on technology-based business innovation provides you with IT management services as part of a broader engagement.

Pros Cons • Steady stream of forward-looking ideas for potentially high- • Managed services are not their primary focus as a business impact IT projects model, so offerings are generally not highly resourced • Often strong competency for project work, ranging from • Usually your frst call /contact is with a dispatch service versus infrastructure implementations with specifc vendors’ products an actual engineer to specialized industry niches • Top engineering talent is usually allocated to new project work, • Well-qualifed to support specifc technologies related to focus not support areas • May not offer true three-shift 24x7 coverage • May subcontract/offshore end-user support without transparency, especially on nights and weekends

Local value-added resellers (VARs) with managed services offerings Under this model, a frm primarily focused on of technology solutions from selected vendors (HP, Microsoft, Citrix, etc.) provides you with IT management services as part of a broader engagement.

Pros Cons • Strong competency with selected vendors’ technology • Despite marketing material, managed services is not their products primary business model. Profts come from infrastructure • Onsite technical assistance may be available when necessary project work and hardware or cloud sales (typically tied to a • May offer end-user support in addition to IT infrastructure limited number of vendors). As such, managedservices is not management their key focus and offerings may be under-resourced. • Tend to be relationship-focused • Not vendor-neutral; tend to have weaker competency in products other than those of their selected partners • Often require/request signifcant hardware upgrade projects before beginning Managed Services contracts • Rarely have a true 24x7 support model

6 A BUSINESSPERSON’S GUIDE TO | IT SERVICE PROVIDERS National/global managed services provider (MSP) Under this model, your IT management needs are addressed by a largecompany providing services across a broad geographic footprint, often using off-shore employees for day-to-day delivery.

Pros Cons • Strong technical competencies for common, widely used • Offshoring is widely used in this model;end-user experience, technologies especially for frst level call support, is often not high quality • On-site support in multiple cities around the world can be • Outsourcing engagementfollows their methodology and covers available (depending on contract negotiated) only general technologies; will likely not becustomized to • Less vulnerable to “key man” dependency risks yourenvironment or cover specifc and unique technologies in • Three-shift 24x7 operations detail • Often least expensive option for base offering • Deep technical expertise is departmentalized (networking, • Able to onboard global enterprise customers with a sound systems, etc.) —making it more diffcult to solve cross- methodology across multiple support centers disciplinary issues • Consistent exposure to other offerings by this organization; • Minimal local day-to-day relationships; engineers doing work Steady stream of forward-looking ideas for potentially high- are dispatched from centralized call centers, often in remote impact IT projects countries • Limited fexibility; changesin scope or specs can require signifcant approval processes • Additional fees (often extensive) are assessed for anything out of prescribed scope; Actual costs are almost always higher than originally anticipated costs

Local managed services provider (MSP) Under this model, your IT management services are addressed by a specialized company that focuses exclusively on your local or regional market.

Pros Cons • Focus on managed services as core business, resulting in all • Signifcant variation between different providers’ service levels resources (personnel, fnancial, investment in tools/technology) and process maturity focused on Managed Services, not other practice areas • Little or no on-site support for geographically remote facilities • End-user experience is usually much higher in this model • Diffcult to use this model for global enterprise • Potential for long-term, high-accountability business • Smaller or less mature providers may be vulnerable to “key relationship at both senior level and day-to-day delivery level man” dependency risks • End-to-end IT management from a single source, ranging from • Some providers have limited 24x7 support or use offshore call help desk calls to IT strategic planning centers • Usually have strong technical competencies • On-site assistance usually available

There are obviously many other factors that distinguish service providers from each other within each of these categories, but narrowing in on the right category before you begin your search for your specifc IT partner will save you lots of unnecessary time and headaches.

7 A BUSINESSPERSON’S GUIDE TO | IT SERVICE PROVIDERS 3: Following the

Another way to understand the difference between these six types of service providers is to consider how they make their money. Every organization’s behavior is ultimately driven by their primary fnancial goals. If those goals align with yours, the relationship is more likely to be a positive one. If those goalsdon’t align with yours, then you may be better off looking elsewhere.

In other words, as former FBI Assistant Director Mark Felt (operating at the time as the famously secretive source “Deep Throat”) advised reporters Woodward and Bernstein during their investigation of the Watergate scandal: “Follow the money.”

Here, then, is an overview of the primary fnancial goals that drive each type of service provider.

SERVICE PROVIDER PRIMARY FINANCIAL DRIVER

Staff augmentation Maximize # of placements and billable hours for each person placed

Managed hosting Maximize billings for rack space in their hosting facility

Consulting/SI frms Grow high-margin project billings

Local VARs Increase sales of affliate vendor partners’ hardware and associated implementation projects

National/global MSPs Build long-term relationships with global enterprise customers at senior level; Sell other offerings into this retained customer base; Increasemargins by leveraging large, centralized, and usually off- shored call centers for Service Desk

Local MSPs Build long-term relationships with locally-based customers at all levels in the organization, including Service Desk engineer/end- user; Increase margins by addressing root causes of Service Desk and NOC incidents and reducing resulting engineering time per customer

These fnancial goals by type of service provider are highly simplifed and surely there are exceptions within each category. The reality is, however, that vendors will look for opportunities to sell prospective customers their highest-margin solutions. Consequently, it is critical for a prospective customer to frst become crystal clear on the problem they need to solve.

Simply put, if you are in need of signifcant long-term data center storage but have your own IT support personnel, then reaching out to Managed Hosting frms for Managed Services is appropriate. If you are a global enterprise with offces in 20 countries and 20,000 employees, and you want to outsource your IT, then a global MSP is appropriate. If you are a mid-sized frm with 1,500 employees primarily concentrated in one city and want to provide high-touch service levels to your employees, then a local MSP is appropriate.

8 A BUSINESSPERSON’S GUIDE TO | IT SERVICE PROVIDERS 4: Your service provider scorecard

Once you’ve selected the right category of service provider for your business, the next step is obviously to evaluate competing providers within that category. Here are some key characteristics to consider when making such an evaluation:

• Deep, broad technical skills. You’ll need your service provider to be able to support all the technologies in your environment—including servers, storage, networks, desktops, mobile devices, software, operating systems and security. You should also investigate their competency in any technologies that you’re not using now but may adopt in the future. Ask to conduct technical interviews with their personnel. • Redundant staffng. A service provider with one Mac guru or one network specialist is as vulnerable to “key man” loss as you are, so make sure that your partner’s staff has enough redundancy to meet your needs even if one of their top people leaves. • True 24x7x365 support. Some service providers claim to offer 24x7 support but really just have an overnight answering service. Most have someone “on call” whom you are waking up when you have a problem, or they use an off-shore answering service. Make sure you can get a call back from a qualifed technologistno matter when you have an issue. Do this even if you don’t think you need round-the-clock support today—because you will eventually need it. • Well-designed, well-documented work processes. A mature service provider will be able to show you how they escalate issues, assign responsibilities, etc. A service provider that can’t do this is probably fying by the seat of its pants—which does not beneft you. • Customer relationship advocates. To ensure that you get the individualized treatment you deserve—and to ensure that your service provider really understands your business—you should be assigned a dedicated account manager. This individual should serve as your “go- to” person if problems arise with the quality of the service you receive. • Friendly, easy-to-understand service desk staff. Language diffculties and cultural barriers can be extremely frustrating for users when they have technical problems, so make sure your service provider is not offshoring technical support or hiring technicians with poor communications skills. • A positive work culture. A service provider with a non-collaborative and uninspiring culture will not be able to meet your needs over the long haul. That’s why it’s a good idea to visit any prospective partner’s facility and get a feel for the work culture. Look for a place where people are motivated, where teamwork is encouraged, and where upper management invests in ongoing staff development. • Advanced technology. While you may not personally be familiar with the specifc technologies service providers use to perform remote monitoring and administration tasks, you should ask questions about those tools anyway. The answers will help you get a picture of how committed any prospective partner is to technical excellence. • Predictable, comprehensible pricing. The last thing you want from a service provider is a hard-to-understand invoice with charges that are diffcult to predict and to understand, so make sure any prospective partner offers a fxed-cost structure that doesn’t expose you to higher monthly expenses once you actually begin working together. • Broad scope. Similar to the above point, make sure that you are clear on what is in and out of scope. Will the service provider help your employee with connecting a home printer? A new IPad or IPhone? How will they handle problems with proprietary software applications? Ask your employees for unusual examples of technical problems they have had, and go through your punch list one by one with your service provider – before you sign the contract. • On-site availability. Service providers obviously want to perform most tasks remotely to keep their costs down as well as to minimize interruptions to their customer’s daily workload, but when push comes to shove, it’s essential that a skilled technologist can show up at your site on short notice. • References, references. A mature service provider with a strong record of service should be able to provide multiple references. Talk to these references about their experiences. And don’t just ask about their positive experiences. Ask about their negative ones, too! No service provider is perfect. But the best ones take responsibility for problems when they occur—and demonstrate commitment to continuous improvement.

You will want to add other items to your checklist as well. But these items provide a good starting point for evaluating service providers in order to fnd one that can walk the walk, rather than just talking the talk.

9 A BUSINESSPERSON’S GUIDE TO | IT SERVICE PROVIDERS 5: Get started now

One of the best things any businessperson can do when it comes to looking for outside help with IT is to get started now. The right service provider partner can be a major asset for the business and for an internal IT leader’s career. By starting the evaluation process sooner than later, you can make your decision more carefully and without haste.

In fact, it’s not a bad idea to start evaluating service providers now even if you don’t think you need outside IT help quite yet. Because eventually you will!Technology keeps growing and getting more complex—and unless you’re in the IT business yourself, it’s probably outside your company’s core competency. The smart decision is therefore to partner with a service provider who can relieve you of technology management burdens so you can focus on what you do best.

Of course, we at YJT would be happy to talk to you about all of this personally. As Chicagoland’s top local MSP, we are committed to helping businesses like yours get maximum value from your investments in information technology—while minimizing the distractions and headaches that IT all too often generates. And we deliver on that commitment every day – and night. Just ask our clients.

10 A BUSINESSPERSON’S GUIDE TO | IT SERVICE PROVIDERS