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Choosing a Managed Service Provider (Podcast)

In this podcast, Dave Hodgdon CEO of PCG sits down with John Maher to talk about how to choose a managed service provider. Dave goes over essential questions business owners should ask when trying to choose an MSP, and then, they look at what sets PCG apart from the competition.

Portsmouth Computer Group · Choosing a Managed Service Provider

John Maher: Hi, I’m John Maher. I’m here today with Dave Hodgdon CEO of PCG, a managed service and IT provider with headquarters in Portsmouth, New Hampshire. Today, we’re talking about choosing a managed service provider. Welcome Dave.

Dave Hodgdon: Good morning. How are you doing today?

John: Good, thanks. So Dave, there’s a lot of different options and levels of a managed service provider or MSP, and there’s a lot of different vendors and I go to their websites and they all kind of look like they do the same things. How can you differentiate between one MSP and another?

How To Differentiate Between MSPs

Dave: Excellent question. I think it’s hard because a lot of times when I’m looking for a particular product and I go do research, John, I kind of feel the same thing. I feel they’re all going to tell you, it’s our people, it’s our culture. There’s a lot that they can offer, but I think you need to start somewhere different. I think you, as the organization needs to first start clearly defining what you’re expecting, what your goals are and your budget and why you’re thinking of outsourcing MSP and then kind of come up with some key questions so when you interview these people, you can get a feel for where they’re at. And then from there, we’ll get some additional advice what you can do next.

What Does Your Business Need From an MSP?

John: Okay. So where would I start in terms of trying to figure out, first of all, what I need from an MSP?

Dave: Well, I think as I said earlier, you need to define internally whether or not you’ve got an existing one. Are you having internal IT you’re thinking of replacing? Are you in a mix of either or that you’re growing and you realize I’ve been a break-fix client and I need to do something? You’ve never had an MSP.

Use the Pain Points From Your Old MSP to Help You Find a Better One

Dave: If you’ve had an MSP before, I think it’s a lot easier. You understood what you liked, what you didn’t like. And then take that information and when you go to the next vendors… The three or four pain points, “Your response time was terrible. You guys didn’t know what you’re doing on security. You had horrible documentation?” I think you can take what you’ve learned from your previous MSP in the interview and hit those high-level items and see how they respond.

Get Your Leadership Team Involved in the MSP Selection Process

Dave: And engage more than just one person in your leadership team when you’re doing this. So when you feel you have a good conversation, engage your team to talk and interview that group because it’s a big decision. This is a marriage and changing IT vendors is a pain and you want to make sure you’re choosing the right one for the long run. Not only is it going to provide value, it’s a partnership. It’s fair. They’re saying what they’re doing and it’s a give and take on both sides.

Questions to Ask MSP Vendors

John: Okay. And so when you’re looking into a new MSP vendor, what are some of the questions that you should be asking them in order to really gather the information and learn more about them and what they’re capable of doing? And if they can fix those pain points or those problems that you just mentioned?

Dave: Good question. I probably have around 10 to 15, but I would first start with these few.

How Long Has the MSP Been in Business?

Dave: How long they’ve been in business? Are they reputable? Have they been around for a while? How long they’ve actually been a managed IT provider versus break-fix client? We’ve been around since 96. There’s been a lot of bumps and bruises from the start of the internet to email, from Novell moving to Microsoft, security to the cloud. We’re able to adapt and it also shows that we’re in business for a reason. So definitely, how long you’ve been in business.

How Many People Are on the MSP’s Technical Team?

Dave: How many employees are on your technical team? There’s a lot of MSP’s that have two or three people, and the owner is one of them. They could be running ragged around. So knowing the breadth of the technical team and the skill sets they can bring to you is a big one.

What Certifications Does the MSP Have?

Dave: What certifications do you have? Because you need to invest in your people because if you’re offering IT, you just don’t want someone that’s always being self-taught. You want to make sure that you have someone reputable helping you out.

Do You Offer 24/7 Help Desk Support?

Dave: I would ask them if they’ve got true 24/7 help desk support. A lot of companies give you support, but you have to wait to the next day. You might need to wait two, three, four, or five hours or to the next day to get a response. Today’s world, as we know John we’re working, we’re working hard. And if I can’t work, I’m losing money to the owner of the business. I need productivity. So the 24/7 is key.

How Many Clients Does the MSP Have?

Dave: I’d ask them how many clients are actually managing. And there’s usually a ratio. If they’re managing a hundred clients and they have five employees something’s not right. The math kind of shows how much… We kind of measure ourselves, and when we know growing, we know we need to add a person on. So about every 10 clients we manage, we add a new body. So as you grow, you kind of need to add a body to go with it because you don’t want to burn out your employees.

What Are the Employee Retention Rates at Your MSP?

Dave: Which brings me to the churn rate of the employees. Are these employees just coming and going? Or is there some stickiness at that company? I’d ask them about what the churn rate, the average tenure of an employee is a big one.

How Do You Document Support Desk Concerns?

Dave: How do you document? A lot of people don’t truly have a documentation system. And then over time, John that’s probably one of the most important ones. You can’t do IT without documentation, so ask how they do the help desk?

Can Your MSP Help With Vendor Support?

Dave: How can you support us with the vendors and liaisons? You need to document the heck out of every network and it needs to be secure. It needs to be updated. It needs to be worked on by both the company and your MSP. Because the company has knowledge, we give them access to the system because they might have internal IT. So documentation I feel is king.

What Is the MSP’s Response Time to Mitigate Client Issues?

Dave: Ask about the actual response time to mitigate client issues. Depending on the level of requests, if I put a ticket in, is that 15 minutes? Is it two hours? So depending on the ticket type, we have a budget John, we’re doing a password reset, 10 minutes. If someone’s taking an hour to do a password reset, something’s not right.

What Is the MSP’s Client Retention Rate?

Dave: Ask what the client retention percentage is. That’s a big question, right there. Are the clients just churning going through them to get the quick buck? Or are they staying long-term with the client? We are extremely proud of our client retention. I still have people from day one here that are still with me. So that’s exciting news that your clients stick with you for a long time.

What Value Can the MSP Bring to Your Business?

Dave: And I asked them what are of the primary values they can bring to your business? I know we have good people. I know we have good culture. That’s not really why you make the decision on the MSP. So I think you really need to work hard on those questions.

MSP Contract Options

John: In terms of signing a contract with you, what type of engagement should I expect to have to do when you’re engaging with a client? Is it a month to month kind of a plan, or is it a yearly plan or how do you handle that?

Dave: It depends on what the client wants. We do offer a month to month. We offer yearly. We offer three years. There’s values as you go longer in the tenure, the ability to save some money that I’m able to lock in that price. IT’s always changing so if you just go month to month, it is what it is. If you go for a year, at least we’re locking in, we’re doing engagement. If you go three years, I’m going to lock you in at the better price because IT gets more expensive. The overhead, things are changing. But we want to be flexible with each client. We don’t want to lock them in… It’s very difficult sometimes John, if someone has had an MSP, they’re under contract, they’re unhappy. They can’t break out of it. That is not what we want. And if they felt that before I’m going to go month to month and when they’re happy, they want to lock in longer, which gets you better rates.

Ideal Response Time With MSPs

John: If I have a problem with something, whether it’s an issue with one of my computers or my network is down or something like that and I want to know that there’s an easy way to get in touch with my MSP and that they’re going to quickly respond and fix that issue. What kind of response time can I expect?

Dave: I feel that’s probably one of the top things PCG does. Each one of our clients gets a dedicated phone number. They have the ability to dial in to a live person here at PCG and the ability to help them. Depending on the severity of that request, John, if you were to call me, “Hey Dave, I can’t print.” And we’ll just ask the question, “Well, is that something you can wait an hour or two? Is that something where you need an immediate response?” If you’re doing payroll, you need it right away of course we have to jump and make things happen, but not all requests are emergencies. So it’s important that not only the client and PCG that we want to respond as needed, but all requests can’t be emergencies.

Why MSPs Need to Provide 24/7 Support

Dave: We found a way around that was to offer our 24/7, which we started offering last year to take that away. So the 24/7 now allows instant access with under one minute to start addressing your issue, John.

John: So no matter what the issue is, you start addressing it right away?

Dave: Right there. And again, since COVID we spoke about that before, but there’s many people that work off hours. If you get locked out of your network, for whatever reason, you got to do a password reset, you work on our project, you can’t work at night. So it doesn’t matter what time, 24/7 instant chat access to our support team.

MSPs Need an Onboarding Blueprint

John: All right. And what are some of the differentiators that you see that PCG has as an MSP versus other companies?

Dave: Good question. I think one of the most important places to start with is the onboarding of a client. That is one of the most difficult projects to do, one of the most time consuming. And we have a blueprint to success. I’d be asking them, “What is your blueprint success of onboarding? How does it work?” We have a very detailed project and a diagram that they can easily follow John from start to finish, from how we do it, from the date it happens, from dealing with the other vendor, from training the staff how to use the services. And then at the end of the first 30, 60 days, we had that first key critical review. How did we do? Here’s where we’re at. And here’s some of the open issues we did. And our onboarding has just been executing better and better. We’ve really been working hard because it’s like the first date John, if it doesn’t go right, you’re not going to get the second date. The onboarding is critical and we’ve worked very hard toward having that be a true differentiator for us.

8-to-5 Vs 24/7 Help Desk Support

John: What else is it that you think differentiates you from other MSP’s?

Dave: I think our 24/7 help desk, most MSP’s are eight by five. We spoke about that briefly before, but having that true 24/7 with instant response via chat to help with your problem, that’s a vital one to have.

IT Strategy

Dave: Another big one for us recently has been what we call as the IT strategy. Kind of think of that as the high level… Most small organizations don’t have a CIO or VCIO, we take that process and bring it to the table from when we first onboard a client, John, after we onboard then at that point we’re asking the client… It’s not just about us providing IT. We need their input. We call that the business insights. What are your goals? What are your issues? What are you trying to do? And our job is to take what we know about IT and bring it together to help give them a roadmap, a budget, and a real plan one, three and five years out from when we get started.

We have that two times a year with them. So we’re constantly updating the project. Last year we had a lot of clients put things on hold because of COVID. So we put that particular plan and we waited until a year, but now we have the remote workforce, “Hey, let’s focus that funds we had for this project because I have no one in the office. I don’t need wireless there but I’m having a problem with all my people working from home, without company owned machines. Let’s take the money we budgeted for that project and let’s get people notebooks for home.”

John: Right. And it’s important to do that planning, like you said looking even three, five years out at what are going to be some of the expenditures? What are we going to have to spend money on? Is it new computers? Is it a new network? Is a new phone system? All things like that. Are we going to go to the cloud instead of having an internal server? All of those things are important to be thinking about constantly rather than to only be looking at, okay what’s the latest problem that we have to fix. This is a problem. All right, we fix it. There’s a problem. We have to fix it. That’s just responding to whatever the issues are and not really looking ahead at what the plan is for your IT for years out ahead.

Proactive Tech Support

Dave:  John, I’d like you to advocate, be our speaker. That’s exactly what it is that we don’t want to ad hoc. And I think clients start to appreciate, “Oh, it’s really just not fixing this stuff. You guys are being proactive and really looking.” Because right now we know once we complete their audit this is probably one of the bigger discussions. The cloud is huge. So their servers are four years old, we know we have two years more out of it. Now’s the time to have that discussion. Let’s find out what the vendors are. Do they offer a cloud service? Is there a reason we might go to the cloud? Let’s start getting the cost now, look at my ROI because two years isn’t far from now. Let’s start thinking about it. Let’s get a budget and we get that fork in the road. Do we want to stay on premise or go to the cloud?

So, having those conversations is vital and having that roadmap and budget and having that business conversation, being a seat at the table, just on IT expenses, John, is what we’re looking for with our companies. We are looking for companies that are operationally mature and want IT to help. They don’t see IT as an expense.

MSPs That Help With Azure and Security

John: All right. Well, that’s really great information, Dave, any final thoughts?

Dave: I just said that our security practice, our Azure, John are two other differentiators. So I mean, Azure is tough. It’s complex that we feel that moving your servers to the cloud. So we have some great Azure experts in house. It was tough when you first start this a few years ago, you learn a lot. It’s not like having the physical server and just going off the cloud. It’s a totally different way of thinking about it. And the reason we liked the Azure practice, you pay for what you consume. More and more people are working remotely so the Azure practice is big. And our security practice, there’s very few MSP’s that have… We started doing this in 2016 in the early stages. We’ve learned a lot, we’ve got some great partners and we have the ability now we’re running risk assessments. Depending on your industry, John, whether you’re medical, legal, financial, manufacturing, we have the ability and tools and services to help you comply and help your business be secure.

Contact PCG for Managed IT Services

John: All right. Great information, Dave. Thanks again for speaking with me today.

Dave:  Our pleasure.

John: And for more information, visit the PCG website at pcgit.com or call (603) 431-4121.