It’s very common in the IT space to resell the services of others. We won’t go into all the reasons why, but in general, reselling helps broaden and complement existing services, provides a revenue opportunity, and has a strategic benefit. Although we are focusing on the process of selecting a managed services partner in this article, many of the concepts apply to working with any partner.
Many resellers select a managed services partner based on “gut feel” or because they are enamored with features of the service, or the price they will pay. But like a marriage, there are more aspects to the relationship than the initial spark that will decide whether or not it’s successful in the long run.
Choosing the right managed services partner involves a lot of work up front. It’s an investment of time, and time is money, so it’s essential to have an effective selection process. There is also the cost of getting started with your new partner: potentially hard costs such as investing in new equipment, and definitely the softer costs for people to configure systems and get trained.
If you’re going to spend this much time, effort and money to enter a long-term relationship with a managed services partner, you want to increase your odds that the partnership will work; the risks are particularly high if your hosting partner can’t deliver. If they can’t meet Service Level Agreements (SLAs), hit Quality of Service (QoS) targets, or provide adequate support, you’re putting your customers and your business at risk.
Managed Services Partner Checklist
It doesn’t matter what type of managed services partner you’re looking for, the process should start with a thoughtful review of the requirements, and more to the point – what your customers need and what they will consider buying from you. It’s also important to think about the solution in terms of future growth as the needs of your clients evolve. Here are six critical areas to carefully consider.
There are certain aspects of a managed services partner that should be viewed as table-stakes. Security, availability performance and redundancy, are all great examples. If you are going to market with a partner that will be responsible for your client system uptime and data security, you better carefully screen what they do and how they do it. This might include other factors such as having the ability to scale environments up and down. Or, meet unique performance, reliability, or regulatory demands of specific industries such as finance, healthcare or ecommerce. Also, review the partner’s systems that will impact you and make sure they’re easy to work with. These behind the scenes capabilities can be just as important as what you will actually sell.
Once you establish that the managed services partner has the solutions you need, the economics naturally must work. After you mark up the cost of their services to your customers, are you still competitive in the marketplace? Is the profit margin worth your while? It’s important to note that at times the strategic value a partner offers to drive other parts of your business may be your primary motivation. For instance, you may want to resell infrastructure or cloud services only to make it more difficult for vendors with those services to wedge into your accounts. In this example, you also add more value and choice for your clients.
Sales and Marketing:
The partner you choose should have a vested interest in helping you sell and should do everything possible to help make that process easier. A strong web presence and some collateral are usually good starts. As well, they should make themselves available for joint sales calls or meetings with your best prospects. In scenarios when the stakes are higher, you and your managed services partner may want to develop co-marketing initiatives together. It all depends on the volume of business involved, but ask the potential partner what types of activities they can and will engage in to help you succeed.
A strong cultural alignment is necessary for most business relationships, and being able to work well with a managed services partner is an especially important success factor. Do they treat their customers the same way you treat yours? Do they share common values? Are they responsive? Do they communicate well? Do your people seem to get along with theirs? These are all important questions because it doesn’t get any easier once the relationship moves from courtship to day-to-day operations.
Here’s a good example – if you’re a 30 person business built around high-touch service and support, choosing a cloud partner such as Amazon, Google, or Microsoft may not be your best bet. When problems arise, you will simply not get the level of support your clients expect from you. These are all excellent services, but their models are self-serve. In this case, you may be better off working with a smaller managed services partner if their way of doing business is more like yours.
References and Audits:
Be sure to perform your due diligence concerning the potential partner’s performance records. Discuss their average system uptime history, past security breaches, performance metrics and so on. Also look at any certifications they hold that your customers may value such as HIPAA, FISMA/SOX, and PCI-DSS. You should also get references from resellers similar to you that will share what their experience has been like so far.
How your managed services partner helps you and your clients after deployment is critical. It’s your brand and reputation that are on the line. Therefore your selection process should include a deep-dive of the partner’s support mechanisms, particularly as they relate to any common problems that may affect the services you a reselling. These are areas you should explore when you check references. Have a look at their documentation as well as their training processes and hiring practices.
The Bottom Line
When choosing a managed services partner, the amount of time and energy you put into the process will depend on the scope, nature, and projected volumes of business you anticipate doing together. If the relationship is sizable and important to your business, obviously you want to increase your odds of doing it right the first time. The six areas to consider listed above may be all you need. At the very least they should provide a good starting point.
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