Brad Kendall

running a
in the cloud
for less than $40 a month
MANAGED SERVICES PRACTICE

contents:
Introduction
Who it is document intended for 3 3 4 4 4 5 5 6 6 6 8 8 8 8 9 9 10 10 11 11 11 12 13 14 14 16 16 17 17 17 18 19 19 19

What is managed services?

Current trends in managed service Who should become an MSP?

MSP Business Model

Benets to the managed services model

Planning your operations

Find the appropriate tools and services Design your help desk

Documents and templates you will need

Managed services contract Help desk escalation procedure Letter of agency Vendor management database Welcome letter or video

Migrating to managed services

When to drop a client Pricing your managed services offerings: Keeping customers on your managed services contracts Two tips to keep your clients

Three pillars to managed services success

Network Monitoring Help Desk Vendor Management

Tools of the Trade

Network Management Software Help desk / PSA Software Phone Systems Remote Support Software Survey Services

Conclusion
Contacting Me Further Reading

"When The PC Was Launched, People Knew It Was Important." Bill Gates

-Introduction
This document describes how to start a managed services practice on a shoe string budget utilizing cloud technologies and a little bit of out of the box thinking. My goal for this guide is to teach you about managed services, how it can benet both your business and your personal life and how to do it for less $40 / month. The tools and methods I provide in this document will help you get your managed services practice off the ground.

Who it is document intended for

I have written this guide for: People interested in managed services. Existing IT providers who are considering switching to managed services but do not want to make a large cash or time investment. MSP's who may want to save some money or change the way they run their business.

What is managed services?

According to Wikipedia, Managed Services is the practice of transferring day-to-day related management responsibility as a strategic method for improved effective and efcient operations. The person or organization that owns or has direct oversight of the organization or system being managed is referred to as the client or customer. The person or organization that accepts and provides the managed service is regarded as the Managed Service Provider.

Who should become an MSP?

If you are an IT provider looking to:

increase revenue automate / delegate / outsource work want consistent and predictable revenue offer better value to your clients eliminate invoice haggling

becoming a managed services provider may be the right move for you and your business.

If you are just starting or considering starting an IT rm in the future, the MSP model may be a good t for your new business.

MSP Business Model

As a managed services provider your business model will be to assume responsibility of your clients network for a dened set of services for a xed monthly fee. This creates an environment ripe for efcient use of automation and remote tools. By monitoring your clients networks and providing remote support, you are able to efciently deliver IT services to your clients for a xed fee.

Benets to the managed services model

The benets to the managed services model are as follows: Predictable revenue growth: Because you are no longer trading time for money, you can predict how your revenue grows. Taking on additional clients does not necessarily require additional staff. Using automation and efcient processes, you easily predict your businesses growth. Consistent revenue stream: With managed services, you agree to a prepaid sum of money delivered every month at the same time. If your client does not experience a single issue on their network, you still get paid as you should. Eliminate Invoice haggling: Because you agree with your client on the monthly contract fee before hand, you will never have to haggle with your client about the cost of the invoice. Do more with less: With automation and efcient processes talked about in this document, you can support more clients, which means more money for your business. Sell more projects: With the managed services model, the relationship with your client switches. You will become a trusted provider instead of the computer guy. This tends to lead to more projects and auxiliary work like server installations, network infrastructure jobs and even partnership opportunities!

support ticket process

Support ticket received. Ticket is created. The problem is identified. The problem is documented in the help desk / PSA software. The problem is qualified if it can be resolved through tier 1 support. If the issue can be resolved: Close the ticket, update the resolution in the help desk / PSA software. Contact the client to ensure the issue has been resolved to their satisfaction. If the issue cannot be resolved Trouble ticket is forwarded to tier 2 tech with a description of what solutions have already been tried or discussed. The problem is qualified if it can be resolved through tier 2 support. If the issue can be resolved: Close the trouble ticket, update the resolution in the help desk / PSA software. Contact the client to ensure the issue has been resolved to their satisfaction. If the issue cannot be resolved Issue is forwarded to 3rd party vendor and worked to completion between tier 2 support and 3rd party vendor.

Planning your operations

Find the appropriate tools and services
This is the trickiest part. A lot of the industry standard tools (Kaseya, N-Able) are costly and require a large upfront investment. This scares a lot of the smaller providers and that is not what this guide is about.

Design your help desk

A help desk is an essential part of a managed services practice. It needs to be consistent and easy to use for your clients. You should have a help desk phone number or extension, a call queue, a support ticketing system with a web interface and or email interface. This is essential to reduce your time on the phone or answering emails and making sure work gets done. Do not let your clients call you on your cell phone or personal email address. Create a process for handling support tickets: Like I mentioned previously, you should have a consistent, polished support escalation procedure. Since this guide is geared towards small MSPs, I highly doubt you will have the standard three tiered help desk. At my company, we have a two tiered help-desk with the third tier being 3rd party vendor support. Try building on the example on the left of this page. It is important to stick to this process and have a trouble ticket for every problem, even if you are just a one man MSP firm. The reasons for this are that your clients will be able to see all issues that you have worked or are working on, it increases client communication and reduces the overall time your techs techs spend on the phone or emailing clients. On top of all this, you will start to grow a very valuable database of problem resolutions. This comes in handy in the future.
6

Help desk escalation procedure

Documents and templates you will need

If you decide to convert your existing practice or start a new managed services practice, you will need the following documents and templates.

Managed services contract

You will need a solid managed services contract complete with a Service Level Agreement. This document lays out your entire service offering to your clients. You will want to make sure this contract outlines all of the following: Termination Policy Fees and Payment Schedule Excluded services Coverage or Scope Service Calls where no problem is found Emergency after hours fees Covered equipment and software

Help desk escalation procedure

As mentioned previously, your help desk escalation procedure should be written down and it is a good idea to include it in your managed services contract. It is just as important that your clients as well as your technicians follow this procedure.

Letter of agency
A letter of agency is a document authorizing you to act on your clients behalf with 3rd party vendors. Traditionally used for telecommunications providers, this is now an essential tool for managed services providers.

Vendor management database

The vendor management database is a place to keep all of your clients vendors contact information and any notes about dealing with them. Every vendor has different policies and different ways of communicating with you. All this information should be kept in one place (preferably your help desk / PSA software) to access when a support ticket requires 3rd party vendor support.

Welcome letter or video

A welcome letter or video is a great way of teaching your clients your way of operating. This should walk them through your help desk escalation procedures, how to create a trouble ticket and any other pertinent information.

You can find templates for all these documents on my website http://www.bradkendall.ca in the downloads section.

There Is Nothing Wrong With Change, If It Is In The Right Direction - Winston Churchill

Migrating To Managed Services

Migrating your business to managed services requires a complete change of thinking of both you as the owner, your employees and your clients. The core to managed services is consistency. Every request needs to be handled the same way every time.This allows for automation and outsourcing which is where the cost savings come in for you. Should you drop all your existing clients that do not want to switch to managed services? NO!Managed services is not a perfect t for all your clients.Why should you toss away revenue? Revenue is revenue.You can use some of your managed services tools to reduce the costs of providing services to these customers like providing remote support instead of driving onsite and billing them hourly. This can actually be quite protable. In my business, break/x service accounts for roughly 25% of my revenue.

When to drop a client

You may need to drop or re a client to keep your managed services practice running efciently. When a client of mine falls into one of the three categories below too frequently, this is when I say goodbye.

Not paying on time Not pleasant to deal with Time better spent with a different client

10

Pricing your managed services offerings:

There are many ways you can price your managed services contract. In my experience, you need to offer unlimited onsite support to entice the client and demonstrate your condence in your services. It is very rare that you will actually need to go onsite if you have some good network monitoring software and remote support software. Another handy trick to reduce onsite visits is to require the client to have a spare computer onsite that is ready to go incase of a hardware failure. As for pricing, I usually like to charge $350 / month for servers, $80 / month for workstations and about $15 / month for printers. I then usually add or subtract a bit of money from that depending how annoying or low maintenance a customer is.

Keeping customers on your managed services contracts

Here are some reasons that clients may drop or switch managed services providers: Pricing Try providing a simple fee schedule for your services. I know it is tempting to create complex pricing structures, but these will frustrate potential and existing clients Build a relationship Managed Services is all relationships. You need to form a solid professional relationship with your clients so there is more in the game than just IT Services. You want to achieve the role of trusted provider.

Two tips to keep your clients

Send out a customer survey every so often. Keep track of what your clients think of you and your services. Try your best to resolve any trouble found and use the positive feedback in your marketing and sales strategies. You may want to try holding State of the Union meetings with your clients. To do this just sit down and chat with your client every couple of months.This can be done on the phone or in person. This solidies the relationship and gets you one step closer to trusted advisor status. To sum it all up, communication is what keeps your customers happy as an MSP.

11

You Have To Learn The Rules Of The Game. And Then You Have To Play Better Than Anyone Else. - Albert Einstein

Three Pillars To Managed Services Success

The three pillars to managed services success are network monitoring, help desk, and vendor management. These are the core services you will need to get your MSP practice off the ground.

12

Network Monitoring
What is network monitoring? From Wikipedia "The termnetwork monitoringdescribes the use of a system that constantly monitors acomputer networkfor slow or failing components and that noties thenetwork administrator(via email, pager or other alarms) in case of outages. It is a subset of the functions involved innetwork management."

Network Monitoring is an essential part of delivering managed services.Network monitoring tools all have a common set of features like:

WMI Monitoring Event Log Monitoring SNMP Monitoring Alerting Supports Common Server Function Monitoring (Exchange, IIS, SQL Server) Reporting Patch Management Integrates with help desk / PSA software Allows remote control of PCs and servers

Although the features are common, network monitoring software is not all equal.There are many other factors to consider when choosing Network Monitoring software.

These are:

Price (a big one considering the title of this book.) Vendor Support Software model (cloud, on premiss) Agent based or agent-less Ease of use to install, deploy and maintain Costs to host and run software, if applicable. Auto repair features

The core of network monitoring software is alerts.Alerts continuously monitor your client's systems and let know if there is an issue.Is the clients web server down?Has a client's desktop computer been on for more than a month?Is there unusually high cpu usage on your clients exchange server? These are the kinds of problems that cause phone calls and take up your time.If you are offering "all you can eat" IT services, this negatively effects your bottom line.

Patch Management is another way of increasing uptime by keeping systems up to date and secure. Patch management reduces the time to deploy updates to your clients systems. This is the kind of efciency needed to run a successful managed services practice.
13

Remote control eliminates the need for onsite support for a large majority of issues. A client has lled up their print queue and needs assistance? Instead of going onsite or sitting on the phone spending 20 minutes getting them to the control panel, you or your techs can instantly take over their computer and x the problem.

Integration with your help desk or PSA software allows all the alerts to be created into trouble tickets so your help desk staff can address alerts when they happen and follow the proper escalation procedures.

Reporting is necessary to show your value to your clients. If you are doing your job right an no one is having issues that require support, you clients may begin wondering what they are paying you for. Reporting shows them that you are doing your due diligence and shows them the value in the money they pay you.

Your help desk is the the only partof your managed services practice that your clients see.This needs to be well polished and professional.Your choice of PSA or help desk software is essential.That doesn't mean you need to pay a bunch of money for it.The features you will need in help desk software are as follows:

Help Desk

Ticketing Ability to charge for tickets (if considering a hybrid practice) Email or other alerts for new ticket creation Client facing website A good phone system for routing calls.

Vendor management is something that benets both you and your client. Vendor management takes the pain out of communicating with a 3rd party vendor through your customer.How many times has a fairly easy problem that required vendor support taken three times the length to resolve because of the communication issues.

Vendor Management

Before vendor management:

3rd party vendor receives request

Problem requiring vendor support

IT provider requests customer contact 3rd party vendor

IT Provider answers question

Client relays vendor questions to IT provider

3rd party vendor has additional questions

IT Provider relays answers to client

Client gives answer to 3rd party vendor

3rd party vendor resolves issue

Solution Implemented by IT provider

Client delivers solution to IT provider

3rd party vendor delivers solution to client

As you can see, there is a lot of back and forth between the you (the IT provider), the client and the 3rd party vendor.This model is inefcient and benets nobody.It costs you time, your client time and the 3rd party vendor time.No one wants that.

With vendor management, you arrange permission using the letter of agency to act on your clients behalf when you require 3rd party vendor assistance. After vendor management:

Problem requiring vendor support

3rd party vendor receives request

IT Provider answers question

3rd party vendor has additional questions

IT provider gives answer to 3rd party vendor

3rd party vendor resolves issue

Solution Implemented by IT provider

3rd party vendor delivers solution to IT provider

Much simpler, no?This is my preferred method to handle vendor support issues and it will cost you nothing than a little bit of time during the start of your contract to set up.

Man Is A Toolusing Animal. Without Tools He Is Nothing, With Tools He Is All.

- Thomas Carlyle

Tools Of The Trade

The tools you choose to run your managed services practice is one of the more important choices you will have to make. You want to select a package with great support, ease of use, features and of course price. I have been researching these tools for the past couple of years and have found the leanest, meanest tools out there to help you run your managed services practice in the cloud, with a no upfront investment. The reasons I have selected these tools are that they are low cost, high quality tools hosted in the cloud and the companies do not use any of the high pressure sales tactics that the industry standard tools use. They offer pricing information and free trials without ever having to talk to a salesman.

Network Management Software

TechlabCloud
TechlabCloud gives you all the power features of Labtech but without any of the upfront investment (license cost, server, installation, etc). This simplies deployment, security and scalability. TechlabCloudalso supports anti-virus and backup solutions on a monthly contract.I nd this makes antivirus and backup a lot more protable.

TechlabCloud can be had for as little as $8.00 / month / agent. No upfront fees and a 25 license minimum. Setup is easy and should take even a novice under 30 minutes to be up and running. The staff is great and will assist you with any trouble you run into. Also with TechlabCloud, you get full access to the wonderful Labtech community!

GFI Max
GFI max is very low cost.Although it doesn't have the features of Labtech, it has a very low monthly price for desktop agents. GFI costs as little as $0.10 / month / desktop device and around $12.00 / month for a server agent. GFI thinks business and offers great tips on how to market and manage your managed services practice. This is a valuable add-on to their service.

16

Help Desk / PSA Software

Shockey Monkey
Shockey Monkey is the simplest & most effective IT Management Platform: Unifying support, service, management, reporting, & sales activity under a free branded experience. The cost is free but they also have a pro and fro version. The pro version costs $45.00 / month and $9.00 per user

Autotask Go
Autotask Go is on the expensive end of the spectrum, starting at $29.00 / month per user. Autotask is a very nice program and I suggest you review it.

ZenDesk
Zendesk is just a ticketing system, but it is a great one.It may be all you need if you are a small shop with few customers.It doesn't do a lot, but it does ticketing very well.

Commit CRM
Although Commit CRM is a on premiss solution, I feel that I would do a disservice to you by leaving it out of this document. CommitCRM is a great low cost solution to run your managed services business off of. The community is excellent as is the support.

Phone Systems
Ring Central
With Ring Central, you can put your entire phone system in the cloud starting at just $10.00 / month.All calls will be routed to your cell phone or landlines and you will have all the features available on high priced phone systems.

Onebox is a service similar to Ring Central. Although a little more expensive than Ring Central, Onebox offers a live receptionist feature which can give your business a rst-class image and increase customer satisfaction.

Onebox

Remote Support Software

Although included with most network management software, you may consider additional remote support software to handle computers without an agent installed.

Simple-Help
Simple-help is by far my favorite remote support solution. It is simple to use for both your clients and your techs. No software install necessary as long as you and your clients have java installed. It supports Windows, Macs, and Linux devices.You can host Simple help your self for around $250.00 or in the cloud for $11.00 / month.

17

Survey Services
Surveys are a great way to communicate with your client. It shows them that you care and gives them valuable insight into how they think you are doing your job. It will give you advantages when marketing to new clients and help you x issues with existing ones before they leave you for a different provider.

Survey Monkey
Survey Monkey lets you send free online surveys and questioners to your clients.

Zoomerang
Zoomerang is another service that lets you send surveys to your clients and let you analyze the results.

If You Want A Happy Ending, That Depends, Of Course, On Where You Stop Your Story. - Orson Welles

- Conclusion
I hope you found this guide a useful resource in planning your managed services migration. All the information is based off of my experience migrating my IT rm to a managed services practice. If you have any questions or comments, I encourage you to contact me. If you would like more information about running a small IT rm, I suggest you visit my blog, http://www.bradkendall.ca. I have tons of useful tips, product reviews and anything else related to IT and managed services.

Contacting Me
If you wish to contact me for any reason, I may be reached in many ways: Website: http://www.bradkendall.ca Email: brad@bradkendall.ca Twitter: http://twitter.com/bradjkendall

Further Reading
Some other guides to starting or migrating to a managed services provider:

How to Setup a Managed Services Business a Complete Soup to Nuts Guide The Guide to a Successful Managed Services Practice What Every SMB IT Service Provider Should Know The Best I.T. Service Delivery BOOK EVER! Hardware Warranty, Break-Fix, Professional and Managed Services The Best NOC and Service Desk Operations BOOK EVER! For Managed Services
Some links to blog posts by myself that cover some of the contents in this guide in more detail:

TechlabCloud Review GFI Max vs Labtech - Product Comparison SimpleHelp - Telecommuting for IT Professionals Improve your phone system and save money
Copyright 2011 - Brad Kendall
19