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A History of Managed IT Services

Many businesses have struggled to solve problems with their IT systems. Managed Services aims to provide an efficient solution for reliably managing computer and data systems at a low cost by combining proactive and reactive methodologies. The following is an overview of Managed IT Services’ history and evolution.

The Early Years

In the beginning, businesses relied upon reactive “break-fix” solutions to fix IT issues. Under the break-fix model, companies would have to wait for a technician to arrive to repair a problem on-site. There were minimal preventive or proactive measures. Eventually, companies created internal IT teams that could develop maintenance procedures and perform periodic reviews.

The Emergence of Managed Services

Soon after, hardware and software vendors started adding problem detection capabilities to their systems. Network Management Protocol, developed in the 1990s, was one of the first tools to help identify PC issues. The first modern-day automated systems emerged toward the turn of the century. However, only conglomerates could utilize these new services, which were expensive and complicated to manage.

Managed Services Become Widespread

Circa 2005, Managed Services started to become more mainstream. Increased service providers and more affordable rates enabled small and mid-sized businesses to take advantage of the movement. Today’s businesses don’t have to rely on break-fix methods and can’t afford to either. Most companies depend on reliable IT systems that function with minimal downtime. IT maintenance needs to be proactive for optimal productivity and performance.

Service Level Agreement (SLA)

A Service Level Agreement (SLA) outlines the service provider and customer’s terms and conditions. This agreement is essential to business owners contracting with an MSP provider.

The Purpose of Service Level Agreements

The SLA states the expectations of both parties and seeks to eliminate the opportunity for misinterpretation of contract details.

The typical SLA will include the following.

Definitions of service standards
Metrics for measuring service standards
List of reporting methods
Outline of the dispute resolution process
Penalties for contract breaches
Procedure for changing the service agreements

An MSP’s capabilities evolve with time, just as a business owner’s service requirements can change. As a result, the provider must include a clause that outlines a procedure for changing the SLA.

What to Look For in an SLA

Business owners should
look for the following in the Service Level Agreement with their MSP.

Indemnification Clause

This clause protects customers from any contract breaches. If the provider cannot fulfill the agreed-upon terms, they will have to pay for the customer’s litigation expenses. Many MSPs don’t include an indemnification clause by default. Business owners are advised to re-draft a version that contains this protective provision.

Service level Verification

BA service provider’s statistics are typically available online. Customers should check how often the MSP is fulfilling the terms of their SLAs. When the provider can’t meet the SLA conditions, there should be reports of consumers receiving service credits or other compensation.

Availability of service

This part of the SLA defines the availability requirements. Many e-commerce businesses require 99.9% service availability. However, even this high level of service can result in up to five minutes of downtime per month. SLAs should be reviewed and updated periodically, or when business needs change. Carefully planning and understanding this agreement is essential to avoid disputes.

What is ITSM?

IT Service Management (ITSM) is a general term that describes a company’s strategic approach to adopting information technology. MSPs use IT services to perform essential processes and optimize procedures for clients. ITSM includes all the practices involved in creating, delivering, and effectively managing every aspect of a business’s technology service operations.

The Benefits of ITSM

Nearly every business can benefit from implementing ITSM practices. IT-specific applications are essential for standardizing processes and establishing cost-effective delivery structures. Below are some of the advantages of integrating IT Service Management.

Reduced expenses – IT services help define roles and responsibilities that increase productivity and reduce costs. In the long-term, companies gain a better understanding of their organizational needs.
Improved customer service – Another benefit is the ability to adjust processes based on a history of best practices.
Limited mistakes – Implementing IT Service Management will decrease the number of incidents as well as their impact on business operations.

ITSM helps MSPs deliver predictable cost and performance models. Various IT functions will require a variety of different tools to control service performance capabilities and enable communication. IT Service Management works with the help of specific software and processes that can orchestrate these tasks.

Common ITSM Frameworks

ITSM processes require frameworks to strategize tasks. The framework ensures that the right processes, technology, and staff are in place to help an organization achieve its goals. These frameworks outline strategies and designs for handling specific service operations. The IT processes within these frameworks enable continual service improvements to manage change, projects, assets, knowledge, and performance issues. Following is a description of the most commonly-used ITSM frameworks.

Information Technology Infrastructure Library (ITIL)

The most widely-used type of ITSM framework is ITIL v3. This framework aligns the best IT practices with a company’s long-term needs and vision. The five parts include Design, Operation, Strategy, Transition, and Continual Service Improvement.

Microsoft Operations Framework (MOF)

MOF is a series of guidelines that instruct IT professionals on how to develop and maintain efficient services.

Six Sigma

This framework focuses on achieving high objectives through the use of precisely analyzed data. Six Sigma is often used to improve services and reduce the number of product defects.

Control Objectives for Information and Related Technologies (COBIT)

COBIT is an ideal framework for developing, administering, monitoring, and enhancing IT management practices.

Price Models for Managed IT Services

The price of Managed IT Services packages depends on many variables. Some factors include the size of a company, desired level of automation, and required services. However, the five pricing models that most Managed Service Providers use can provide a starting point for obtaining rate estimates.

Flat rate – Most price models have a flat monthly, quarterly, or yearly fee.
By user – This pricing model requires a flat fee for each user connected to the service.
By device – A flat rate is charged for each device connected to a service.
Hourly – Pay a fixed hourly rate.
À La Carte – Companies pick and choose the services they need. Each service is paid for separately.

Many MSPs use a combination of pricing models to serve a client’s needs best. For example, a business owner may decide it’s more economical to pay a flat rate for 24/7 security surveillance and an hourly rate for help desk services.