Common mistakes that managed services providers make and how to avoid them

In the sysadmin world, understaffed and overworked teams are, unfortunately, more common than we’d like them to be. It’s not unusual to find a small IT team supporting hundreds or even thousands of users across the entire organization. The complexities of managing remote environments and supporting ever-growing grand plans for digital transformation can be overwhelming for in-house teams, especially without adequate resources, bandwidth, or expertise. To keep up, many companies turn to managed services providers for help.

What is a managed services provider (MSP)?

A managed services provider specializes in managing all or parts of a customer’s IT infrastructure, networks, applications, and security on an ongoing, proactive basis. Instead of wholesale outsourcing or the break-fix service model, where you pay for every problem fixed, customers of managed IT services pay only for what they need/use.

Hiring a third-party provider to manage IT services allows businesses to lighten the workload of IT teams, leverage the benefits of new technology without (hardware, software, infrastructure, additional headcounts), and gain access to technical expertise that they lack or are not able to hire for. Examples of managed IT services include:

  • Network and infrastructure management
  • Security (including remote monitoring and management)
  • Technical support
  • Application management
  • Backup and disaster recovery
  • Print services
  • Cloud migration and cloud infrastructure management
  • IT consultancy and professional services
  • Business intelligence and data analytics

What are the different types of MSPs?

Managed IT services providers may offer fully managed or co-managed solutions, where they work with in-house IT teams to manage a company’s IT infrastructure and strategy. And they may focus on one technology (pure-play MSPs) or include third-party services and solutions from other providers (hybrid MSPs). Some common types of MSPs include:

Managed Security Service Providers (MSSPs)

MSSPs specialize in providing their customers with end-to-end managed IT security services. This ranges from vulnerability scanning and managing corporate firewalls to 24/7 network monitoring and management. The move to hybrid and remote workforces has led to increased security risks. Working with an MSSP can help companies to reinforce and enhance their security infrastructure against cyber threats.   

Specialty MSPs

Some managed IT services providers specialize in a certain technology platform (Microsoft Azure), hardware service (VoIP), or industry (healthcare). Focusing on a niche segment and building expertise in that area can differentiate an MSP from the competition, giving it an edge over others.

Cloud MSPs

The market for cloud managed IT services is steadily growing thanks to the increasingly widespread adoption of cloud technologies and strategies. This market is projected to reach $102 billion in 2025, according to Gartner. Cloud MSPs can help businesses transition to a cloud environment, facilitating critical activities like data migration, establishing access management policies, managing network security, and backup and disaster recovery.

Six common mistakes that MSPs make and how to avoid them

Whether you’re a customer or a provider of managed IT services, it’s important to know the common pitfalls that MSPs may experience. Calling out and addressing these mistakes — many of which are preventable — could help cultivate better industry practices, raise service standards, and achieve better results in the longer term.   

1. Miscommunicating

Throwing in a bunch of technical jargon or getting too deep into the weeds when presenting service offerings to customers may feel impressive but it’s seldom a good idea. What customers really want to know is how managed IT services and solutions can meet their needs and goals.

Solution: Tailor the conversation to each customer and their level of understanding and encourage questions. Be clear about deliverables and be upfront about any risks and limitations involved, so that they can make informed decisions.

2. Overpromising

In a competitive market, there’s a lot of pressure to close deals and hit sales targets. This can sometimes result in service providers overselling beyond their actual capacity to deliver. Inflating expectations and failing to deliver can lead to reputational damage and even lawsuits.

Solution: Focus on the quality and value offered to customers. Highlight your strengths and specializations but be realistic about what can be done in relation to customer requirements, timelines, and resources.

3. Offering too much or too little flexibility

When it comes to service options, more isn’t always better. Offering too many different service packages or bundles can be confusing to customers. This lack of focus can also make it hard for managed services providers to maintain consistent service levels. On the other hand, having only one option with no room for adjustments would reduce the pool of potential customers.

Solution: Streamline purchase options and scope them around areas of specializations with clear deliverables. Ideally, service packages should be aligned with what customers generally need. A curated list of add-on services can be offered for some degree of flexibility.

4. Marketing (or the lack of)

It’s not enough to rely solely on salespeople without a corresponding marketing strategy or overarching plan in place. Even if marketing is utilized, it’s not always consistent and there may be a disconnect between the marketing message and the core business value offered.

Solution: Work with your marketing team to develop a marketing plan that drives specific business outcomes. Create meaningful, useful, and credible content for target audiences. Prioritize topics that can help in their work and are relatable even to a non-technical audience, like cybersecurity or how to create BYOD policies for companies.

5. Not working with the right partners

Managed IT services providers often work with partners, packaging their own native solutions with other types of third-party offerings like cloud infrastructure-as-a-service (IaaS). Working with the wrong partners not only impacts overall performance but can also affect brand reputation.

Solution: Choose partners who complement your business model, share similar values, and who are just as committed to delivering quality work and high service standards. Scope the partnership clearly, streamlining workflows for greater efficiency and seamless collaboration.

6. Growing too fast

While growth and expansion are common indicators of success, scaling too quickly can be counterproductive. Managed services providers that grow at a rate beyond their capacity to handle may end up with understaffed and overworked teams, poor performance, and customer fallout.

Solution: It’s better to aim for sustainable, quality growth rather than quick wins. Take time to hire people with the right skills and experience for the business. Focus on delivering consistent and reliable results over time and cultivating strong, long-lasting customer relationships.

What makes a good MSP?

The best MSPs are the ones that not only meet compliance and regulatory standards but add real, tangible value to the organizations they serve. Going beyond a transactional client-vendor relationship to develop meaningful partnerships with customers, a good managed services provider actively provides the resources and opportunities for innovation and long-term growth. Here’s a list of qualities to nurture and build on.

  • A proactive, customer-centric approach
  • Strong track records and/or referrals
  • Fast response times
  • Areas of specializations
  • Services that are scalable
  • Reliable, reputable partners
  • Clear and transparent communication
  • Provider accountability (which should be reflected in the service level agreement)

Having the right tools also makes a difference. This was a lesson that HEROIC, a Utah-based MSSP, quickly learned when they overcame the sudden disruptions of a global pandemic by using SmartDeploy to set up hundreds of new computers for a healthcare client. To learn about more real-world applications across a wide range of different industries, check out the rest of our case studies.