Five questions for your MSP

14.11.2005
Managed service providers sell IT-enabled services, which large businesses are increasingly buying piecemeal rather than charging their own IT organizations to acquire, install and run departmental applications in-house. In many cases, individual lines of business or functions such as marketing or human resources departments are contracting and paying for the services, bypassing internal IT organizations in the process.

But experts say the most successful arrangements with MSPs are those designed and negotiated when business and IT managers work together. "This is because most services are not provided in a vacuum. Data from an MSP still must be fed to the customer and vice versa. IT is still involved," says Mike Slavin, a partner at TPI Inc., an IT sourcing consultancy in The Woodlands, Texas.

Here are five questions you should ask to help your business users effectively negotiate the best MSP contracts -- and keep IT in the loop.

1. Who owns the license?

The MSP almost always owns the license to software used to provide a service. In fact, the MSP typically owns virtually all hardware, software, support and maintenance involved in delivering services such as sales contact management or benefits administration, according to Slavin.

"An MSP's value proposition is an end business result," as opposed to delivering services using specific tools, he says. And that's just as well, he adds, since buyers of MSP services -- typically business managers rather than IT managers -- don't care about the "IT plumbing," as long as they are regularly getting the reports, sales leads or other services for which they've contracted.