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Blog posted by: Charlotte Morison, Senior Consultant, Pitcher Partners Consulting Pty Ltd, 30 January 2017.

The use of managed service providers is relatively common across all sorts of organizations. Unfortunately, what’s also common is ineffective relationships and ways of working between businesses and their provider.

Most organizations work with a managed service provider in one way or another, either in a service desk, procurement or security capacity. Increasingly, it’s not just something for big businesses; many small firms now outsource functions because they don’t have internal capabilities or expertise.

A firm might want to outsource certain elements of its IT or need some assistance with processes but, essentially, they are usually unhappy with their current situation. Often, a company’s current vendor has the potential to offer everything they need, but they just aren’t being managed in the right way.

Partner not supplier

When a business engages a managed service provider, it’s absolutely essential to develop a contract to ensure both sides are sufficiently protected. But it’s equally critical that this contract doesn’t become the yardstick for the relationship. The contract isn’t there to be pulled out and analysed every time something goes wrong. Providers and businesses need to develop a partnership, and that can’t be created through a contract alone.

Organizations need to spend time with their provider. They must involve them in discussions and give them access to as much information as possible, without violating any commercial, data or security issues. It’s important to involve providers in business developments – the positive and the negative – and to get their input on strategic decisions. With this level of insight, all parties can better understand the bigger picture and contribute to shared, long-term goals.

In many businesses, supplier/customer relationships boil down to: ‘they provide a service and give us a report each month.’ But what a lot firms don’t realize is that by having an ‘us vs them’ attitude, they are missing out on potential value and innovation.

Whoever the partner, they need to understand the demands, business cycles and priorities of the organization they are working with to provide the best possible service. Essentially, providers want to do a good job but they aren’t always engaged by their client in a way that allows for that.

Providers and customers should develop their relationship in the same way as they would a configuration asset management plan: how do we use the services? What do they do? What relationships exist and what do we want to get out of this?

Only when the provider has that level of information and is engaged in that way can everyone work together effectively.

Creating the right relationship

When establishing a relationship with a managed service provider, there are some key steps that will help set the partnership off on the right footing and ensure that, long-term, it remains a genuine partnership:

1. Owning the information
   The customer owns the information and if using a provider’s tool, organizations should write into the contract that company-specific information, such as incidents and configuration management information, belongs to them and not the provider. The data and information about the customer’s environment and its performance should be readily available, not something that the customer needs to request, but something they have the ability to access themselves. This allows senior stakeholders to see how IT is performing and make strategic decisions based on proper insight.
2. Speaking the same language 
   Having a ‘common language’ between provider and business, such as ITIL®, will help. By both sides having a working understanding of ITIL and being able to speak in best practice, it’s much easier to gain clarity and set expectations.
3. Insist on best practice in the tender
   Many companies might think an IT provider having a genuine, working knowledge of ITIL would be a given, but it’s not always the case and frequently the client’s business has the better understanding. For that reason, it’s essential that a demonstrated capability of relevant best practice processes – such as ITIL – feature in any tender requirements.
4. Considering your risk profile
   Organizations should consider their risk profile and select a vendor that has clients with similar ones. For instance, in Australia, financial services firms need to inform authorities if there are changes to their risk status within the business. Therefore, choose a vendor that understands the consequences of actions and the regulatory impact.

By considering these elements, businesses have the foundations for a genuine partnership that, with the right access, ongoing conversations and collaboration, can make a huge difference to the success of their organization. But agreeing together on the definition of ‘success’ must be one of the first steps.

See our ITIL section for more information about IT service management.

Read Charlotte's previous blog post for AXELOS, The modern service desk.