Server@Work Blog

Does Your IT Company Hide Behind a Wall of Service Contracts?

stack_of_papers.jpgService contracts are good. Well . . . sometimes. They are supposed to protect both the buyer and the seller. The buyer gets a list of the services they are getting and how they will be provided. The seller gets to set pricing and spell out what they are supposed to deliver.  In the IT world, we use managed service contracts to document the IT services we will deliver, how we will deliver them, what the cost will be, and for how long.  Unfortunately, some IT managed service providers use the how long as a trap.

In information technology, things change quickly. That's quite an obvious statement. So in an industry where things are SUPPOSED to change frequently, why do many IT providers insist upon locking their customers into long term contracts? Well, it obviously protects the IT company; but what benefit does it have to the customer? What if the IT company isn't able to keep up with changes over the course of the contract? What if they lose valuable staff and the new people aren't able to deliver technology management the same way? What if your business needs change or you grow quicker than the IT company can handle?

There are lots of reasons for businesses to avoid being locked into a long IT managed services contract. If for no other reason, you want the IT partner to stay sharp and not get lulled into a false sense of sticky security.

Things to look for when shopping IT service and computer support companies.

  1. How long are their service contracts? Anything longer than a year should raise some alarms. There is a cost to on-boarding clients to both the client and to the IT company. But good on-boarding generally lasts a couple weeks and by month two things really settle down and you should start seeing gained efficiency from your new computer support. With on-boarding costs behind you, a contract longer than a year only benefits the IT provider.
  2. What are the early termination provisions? While it may be rash to make a change after a single bad service encounter, a series of bad encounters or chronic service neglect should be grounds for an early termination. But, the language in many service contracts make it hard to leave. Insist that your managed IT service contract have early termination options that make sense for both you and the IT provider -- such as 30 to 45 days written notice for the IT provider but a no penalty option to leave for the client.
  3. What services and support do you get? What is covered and not covered by your managed services agreement should be spelled out in your service contract. Pay particular attention to what will incur additional fees. Some IT providers leave a gray area for additional billing so those nice managed monthly fees promised during the sales presentation don't match up to the higher monthly invoices you get after using support, call-outs, and consulting.

IT Managed Services Benefits

When it comes time to renew your managed computer support or if you are unhappy with your current provider, be sure to take a hard look at your contract. Contract terms should protect your company and the IT services provider.

A good managed technology provider will help your business by:

  • Keeping employees on task and productive by solving IT problems;
  • Ensuring company computers and assets are being properly updated and secured;
  • Helping align business technology with business goals;
  • Providing a trusted resource to assist your business with technology questions and roadmaps; and,
  • Adding technology value to your business so you can be more profitable.
Topics: Managed IT Business Support Business 2 Business Technology Management