Getting a new MSA?

by | Apr 11, 2019 | Outsourcing

The homework you need to do before you outsource your IT (or sign a new agreement).

As a consultant, I get to meet a range of customers who often think they have a unique problem. Then I explain to them that actually it is quite a common problem and that a bit of homework before you started could have saved a lot of heartache.

Outsourced IT arrangements are one of these areas. Lots of organisations have them. Some have had them for a long time and are refreshing them or going to new providers. Some are well written and align closely with organisational requirements. Some have had great lawyers involved so they are legally watertight.

But very few, are well founded in the actual operational management of service. What do I mean by that? Well many of them have great ideas about service descriptions, SLAs, OLAs, performance metrics, costing models, abatement regimes, shared risk arrangements, etc. But the organisation does not yet have the data, and the mechanisms to be able to readily measure these things.

It seems like an obvious one, but many organisations outsource IT because they have not been having a great experience with it and they figure that an outsourced provider can fix it. And often they can. Just as often, if you don’t have the metrics and data properly understood before you start, you end up paying a lot more than you should. This could be because your benchmark data isn’t quite right, your asset data is incomplete, your processes are a bit different to theirs and so there is some additional work required. Or your legal definitions don’t quite line up with the ability of your reporting tools to provide data. And quite often those little gaps in information fall in the favour of the outsourced provider.  When you multiply those little gaps by a large number of assets or a large number of tickets, you pretty quickly find differences between bills and budgets that have a lot of zeros on the end.

So how do you prevent this? You do your homework up front. Yes, you get good advisors to help with the procurement process and good lawyers to negotiate the contract. You also get a good strategic technical advisor to work with you to do a detailed systems and process review before you start. This means aligning your processes, users, and assets and making sure that your data is suitable and the way you want to operate in future is properly captured into the MSA before you enter it. This doesn’t take long, but for a short piece of homework it can save you millions in MSA charges.

If you use ServiceNow and are about to embark on new IT outsourcing, or re-negotiating, and want to discuss how entrago can help you get your house in order before you start, please contact us.

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