#itoutsourcing

What are managed services?

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As the world around us changes, so do the terms we use to describe things that have been around for decades.  This phenomenon is very noticeable in the political arena with the advent of changing terms to be “politically correct”.  I’m not going anywhere near political topics in this blog, but you get the point.

Terms are also changed in the business world, often by someone in marketing trying to put a new spin on an otherwise old subject.  One prominent example today is the cloud.  Cloud can mean a lot of different things to different people, but the basic definition is moving computer systems or software applications outside of your office or home into an offsite datacenter or datacenters.  Anyone using iCloud to store their photos or music is using the cloud.  However, cloud hosting is nothing new.  Software and systems have been housed offsite in datacenters for years.  In the 1980’s and 1990’s this type of service was often referred to as ‘offsite hosting’, ‘colocation’ or simply ‘hosted services’. 

Like cloud, managed services have been around for decades with different names.  Today, an entire industry has been built around managed services.  The companies who provide managed services are called Managed Service Providers or MSP’s.  Managed Service Provider is most often used in the technology industry.  Gartner* defines Managed Service Provider as the following:


A managed service provider (MSP) delivers services, such as network, application, infrastructure and security, via ongoing and regular support and active administration on customers’ premises, in their MSP’s data center (hosting), or in a third-party data center. MSPs may deliver their own native services in conjunction with other providers’ services (for example, a security MSP providing sys admin on top of a third-party cloud IaaS). Pure-play MSPs focus on one vendor or technology, usually their own core offerings. Many MSPs include services from other types of providers. The term MSP traditionally was applied to infrastructure or device-centric types of services but has expanded to include any continuous, regular management, maintenance and support.


As usual in our field, the definition includes an overabundance of techno babble.  In a more generic sense, the definition of managed services is using a third-party company to provide a business process or service traditionally performed within the company using company employees and resources.

Managed service companies make money by charging monthly fees for the services they provide with the intent of providing a stable and predictable cost that can be budgeted for by the customer.  This is the “continuous, regular management, maintenance and support” in the Gartner definition.  In most cases, the monthly cost of managed services is far less and at a higher quality than attempting to hire and operate internally.

Before managed services, outsourcing, fractional services, and consulting were common synonyms used to define the service.  In my opinion, over time, primarily due to a small percentage of poor-quality providers, outsourcing and consulting were cast in a negative light with lower quality results and higher costs.  The industry needed to distance from the negativity and managed service provider was born.

However, managed services come with its own challenges.  It can be very nebulous and generic to many in the business world. 

At its core, managed services are about taking a business process or portion of a business process and hiring an external firm to provide those services and do so with higher quality, typically at a lower cost when compared to hiring a team of employees to do it internally.

Although Managed Services and Managed Service Provider are often attributable to the technology industry, the concept applies to the entire professional services industry.  Each of these services can be aligned to a business process needed by any company running a business.  The amount of ongoing need for a service is dictated by the type and size of the business itself.  Although many have not embraced using the managed services moniker for their services, the concepts are the same.  Some common groups of managed service providers include:

  1. Accounting

  2. Legal

  3. Marketing

  4. Advertising

  5. Human Resources (HR)

  6. Information Technology (IT)

Each group can have many specialty services within them.  Customers may have the option to choose the type and amount of managed service they need for their business.  Using the example above:

  1. Accounting

    1. CFO services

    2. CPA services

    3. Bookkeeping

    4. Month end close and reporting

    5. Accounts payable

    6. Accounts receivable

  2. Legal

    1. Contract creation

    2. Intellectual property

    3. Employee disputes

  3. Marketing

    1. Collateral creation

    2. Logo design

    3. Website design

    4. Writing copy

  4. Advertising

    1. Ad creation

    2. Ad purchasing

  5. Human Resources (HR)

    1. New hire processes

    2. Termination processes

    3. Payroll services

  6. Information Technology (IT)

    1. Helpdesk services

    2. Network management

    3. Systems and services management

    4. Security

    5. Cloud management

The customer has the choice to choose what service and amount is right for their business.  As a company that has provided technology services for the past 20 years, we have seen the ‘preferred’ terminology for what we do change from consulting to outsourcing to managed services.

At Fluid, our Managed Service Provider offering means we take over the day-to-day and ongoing technology needs of our clients, including managing their other vendors (often a pain point).  It is an all-inclusive plan purposely designed to alleviate the risk, stress, and pressure related to managing technology. 

From our clients perspective, our MSP plans simply means someone else is handling all their technology needs and they can focus on running their business.  Our clients also know we will proactively keep them secure and provide advisory services to help ensure technology is being used to maximize productivity and align to their company business objectives.  In reality, we strive to help the company use technology to grow and make more money.

Whether its unlimited helpdesk support with excellent service and response time or complicated migrations of systems to the cloud, we have a relationship built on trust that allows our clients to lean on us while they run the business.  We manage their technology operations top to bottom as if we were an employee.

Our most important metric we measure in relationship to our clients is client satisfaction.  If our clients aren’t 100% satisfied in the service we provide, regardless of the type of task, we are letting them down.

Managed Services can be a very powerful tool when understood and used properly to enhance any company’s business.  If you want to learn more about Fluid’s managed service offering give us a ring or click here!

 

* Source: Gartner IT Glossary https://www.gartner.com/it-glossary/msp-management-service-provider

How 20 Minutes Can Save Your Business: 4 of 4

In my previous post, I promised 4 topics that if considered may make you re-think outsourcing IT.  We started with the specialized knowledge required to keep IT running smoothly for a business today.  No one (or two) person will have it all.  If you missed it, check it out here.  Next we covered the strategic role IT should play in your organization.  Here's #2.  In my third post, I covered reducing risk.  Sometimes we don't consider how much key-person risk we have in our businesses.  This post will help you consider that. Today, I'm going to focus on cost.

Reason #4 - Cost is King: Why Managed Services are MORE Affordable

For small businesses, costs are a critical measurement. The cost to maintain an internal employee’s technical acumen can be monumental. Salary, workers compensation, benefits, and payroll taxes are not cheap. Small companies do not have access to healthcare discounts that large enterprises can harness. Adding regular and expensive training for an IT staffer is a significant increase to those costs. Every course sponsored by your company makes an employee more valuable on the open market. Every course neglected creates risk for your business.

If you are making investments in hardware to maintain an on-premise environment, what happens in the event of an economic downturn? There is no better example than that of the ever-changing Oil and Gas industry. I have seen large infrastructure investments made during a growth period, followed immediately by a downturn. Many found themselves paying for hardware they can no longer utilize effectively.

All things considered, outsourcing IT is less expensive than the cost to maintain a full-time employee. If your industry is facing a downturn, a managed services agreement allows you to scale down. When you experience growth you can easily scale up. You gain access to a team of experts instead of relying on the expertise of one person or a small team. A recent Gartner study cited that 80% of small business would “realize significant savings from outsourcing e-mail management alone.” Imagine the savings in outsourcing other technology components.

Bottom line: If you own or operate a small business you should be evaluating IT outsourcing. A 20 minute conversation might just change your life.

 

How 20 Minutes Can Save Your Business: 2 of 4

In my previous post, I promised 4 topics that if considered may make you re-think outsourcing IT.  We started with the specialized knowledge required to keep IT running smoothly for a business today.  No one (or two) person will have it all.  If you missed it, check it out here. Today, I'm going to focus on the strategic support you get from the right IT partner.  IT should be a business enabler, not a cost center.  The right partner will provide that support.

Reason #2 - From Password Resets to Profit (Setting an IT Strategy)

If you currently have a full-time IT employee or team, how often do they approach executives to get input on how to better support the business using technology? Based upon experience, my guess would be not very often. Smaller IT shops typically do not have the time to keep all of their systems up to date (not to mention password resets, break/fix, email issues), much less consider how to make the technology profitable. The most valuable function an IT organization can provide is not just keeping the lights on, it is enabling the business to grow.

Outsourcing your IT to a managed service provider gives you access to consultants that will work to align technology with your business strategy. Some even provide virtual CIO services, such as planning a technology roadmap, developing an IT budget, and analyzing and reworking business processes.

How are you mitigating the risks associated with maintaining an IT environment? See our next installment on Reducing Risk.

 

How 20 Minutes Can Save Your Business (And Your Sanity)

You are busy, I get it. There is not enough time in the day for you to finish the tasks on your plate, much less extra time to evaluate new technology options. Whether you are part of a small internal IT team or your company has added IT maintenance to your ever-growing list of responsibilities, Fluid has you covered.  There are 4 key reasons to consider outsourcing IT that you may not have thought of in the past.  I'll cover these reasons in a 4-part series.  So if you have 20 minutes, read on and we might be able to change your IT life!

Reason #1 - Specialized Knowledge

I recently participated in a meeting with a potential managed services client whose IT staff consisted of two full time IT employees who both left the company unexpectedly. The reasons they exited are common in small business, though are not often considered in decisions regarding outsourcing. For one employee, the responsibilities were just too overwhelming and they could not handle the workload; the other believed that they did not have a vertical career path. Unfortunately, most small companies cannot afford IT employees with the depth and breadth of knowledge required to adequately run an entire IT environment. Many of the good ones don’t stick around because they are offered more money for their skills by larger companies. The damages left in the wake of their departure were systems and hardware that had not been updated in years, creating significant risk for this business and few options to resolve the issues quickly.

With the decision to outsource, you leverage the collective knowledge of a much larger IT organization. You receive the benefit of much broader coverage, access to expertise and skills you would not have otherwise, and reassurance knowing that critical systems will be maintained consistently.

Are you getting the strategic guidance that you need to grow your business? Check out the next installment on General Business Consulting.

 

Security Breaches: The Kiss of Death for Small Business

For romantics, a kiss signifies love, affection, or respect. Unless you receive the kiss of death, which signifies that your days are numbered. For small business, a cyber-security breach is the dreaded kiss of death. security metrics 2.0Here are some stats that’ll start your heart from recent studies from Property Casualty 360 and Small Business Trends:

- 62% of cyber-attacks are focused on small to medium businesses - Only 14% of these businesses rating their ability to mitigate an attack as highly effective - Average cost of a breach for a small business, including damage or theft of assets and disruption of normal operations is slightly over $1.8M - 60% of small companies will go out of business within six months after an attack

While it may be surprising that 60% of SMBs attacked will be out of business, once you understand the typical cost of a successful attack, it’s far less surprising.

So do small business owners just give up in the face of these threats? Nah, that’s not the way entrepreneurs roll. Most small businesses can outsource the mitigation of this risk for less than $1K per month, offloading both the risk and the time that it takes to manage a security solution. For a small business, this can be the difference between life or death, much like an insurance policy.

In the world today, it’s no longer a matter of IF your company will be hit by a cyber-attack, it is a matter of WHEN. The question that you should ask yourself is, “Do I have almost 2 million dollars to handle it retroactively, or does it make more sense to spend $1,000 per month to proactively protect my livelihood and my customers?”

For a frank discussion on cyber-security and ways to mitigate these risk, reach out to Fluid. We can help.

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IT Security Framework for Accounting Firms

The AICPA released two sets of criteria for public comment this week (Sept 2016) regarding cyber security. Both focus on different elements, but the common theme is the AICPA trying to develop a common framework for audit firms to evaluate the cyber security of their clients (risks and compliance). While this will prove to be very helpful, it got us thinking at Fluid: Do CPA firms themselves have a framework for their own security? Are CPA firms adequately protected from data breaches of their client’s financial information? Are accounting firms prepared to react to and recover from a malicious threat that may cause data loss or temporarily impact the productivity of the team?

Data security is a pressing issue for CPA firms given the rising level of attacks and the sensitive financial data accountants work with. A few data points –

  • Over ½ a billion personal records were stolen in 2015
  • Phishing campaigns targeting employees rose 55% in 2015
  • Ransomware increased by 35% in 2015 (362K reported cases)
  • 1 in 220 emails sent contain malware (431M new malware variants found)

While developing your own cyber security framework may seem daunting given the rapidly shifting threats, the task at hand can be greatly simplified if you break it down into the components parts (and work with professionals). At Fluid, we support our clients in 4 primary areas that each firm must address to have a comprehensive security plan.

1) Compliance Management:Fluid Security Framework

Does your firm understand all levels of compliance required given the data your firm interacts with? This can range from data retention compliance standards to data-center configuration standards. Often great compliance management starts with proper documentation, but rely on staff training and monthly monitoring to ensure/validate compliance.

2) Perimeter Management:

Think of your IT perimeter like the physical perimeter of a secure building. Are all entries and exits secured and guarded? Firewalls, cloud services, and email are major vulnerability points that should be managed and monitored for security purposes. BYOD and the proliferation of mobile devices has extended this perimeter, but these additional problem have solutions if they are approached systematically.

3) Vulnerability Monitoring and Threat Response:

You may know your weaknesses today, but that will change tomorrow; you need to monitor for attacks and have an active response if any attacks are detected. Much of this can be automated, but some expert oversight can make sure you don’t have any unintended gaps.

4) Cloud Backup and Disaster Recovery:

Even the best-run IT Departments may run into an occasional problem, ranging from accidental data loss to a malicious breach. We’ve found from our experience with clients that having a robust, offsite backup in a secure cloud environment can minimize the impact of most problems and greatly improve recovery times.

 

Whether you know it or not, your firm has ongoing IT activities in each of these 4 areas, which require ongoing focus and continual improvement – security is never ‘one and done’.

If you want to review your security practices, give us a call. We can help.