In parts one and two of our series, we discussed keys to unlocking the potential of a managed service. In this blog we discuss the importance of defining service level agreements (SLAs) and key performance indicators (KPIs) within the defined and agreed upon scope.
Adjusting to the managed service model
In the 1990’s and 2000’s, a number of new consulting models emerged in the technology industry. One that has proven to be lucrative, but has not always delivered quality, is staff augmentation. In this model, firms are essentially used as a billing office for individual consultants who need a Master Service Agreement number to work under.
We’ve seen this model create several problems for our clients. The biggest is that an undue reliance is built on individuals who become indispensable for their subject matter expertise.
The managed services model solves the risk of relying on any one individual person completing a job. When you contract a managed service provider, you get a whole team backing the task at hand and the team can be reorganized or reassigned as needed to ensure the project always runs smoothly.
However, running a successful managed service is not just a matter of having a team approach. Ensuring success requires clearly defined and attainable metrics.
Measures of success
SLAs and KPIs are metrics used to determine how successful a managed service engagement is. Together, they define success and provide guidelines for making adjustments where needed.
SLAs are the how. They are the sandbox within our original sandbox (scope). The first sandbox defined the limits of what will be managed. SLAs determine how the individual processes and projects within that sandbox will be managed. They serve as a way of ensuring the processes and projects are well-defined and adds an element of accountability if anything goes awry.
Conditions of Satisfaction
KPIs are conditions of satisfaction that demonstrate how effective the vendor is at achieving the key business objectives of the managed service. KPIs should also be easy to quantify – this makes the impact of the managed service simpler to assess.
Setting up the managed service and defining scope is only the beginning in the managed service process. Assessing your managed services successfully with KPIs and SLAs is a crucial component for success.
You don’t want a company who simply meets the minimum bar of execution. You want an MSP that helps you innovate and do more of what matters to you and your business.
Look for the last installment of this 4-part series, where we’ll discuss the importance of setting up an exit-plan and creating opportunities for innovation.
See you next week.