Everything you need to know about working with a Managed Service Provider (MSP)

Like most IT leaders, you need, too, a reliable, robust, and efficient IT infrastructure that keeps the business running smoothly to meet its outcomes. In some cases, an internal team might be overburdened with existing work or lack the general expertise to handle certain security protocols, manage disaster recovery, or simply maintain IT systems to minimize downtime. In such cases, having professional support can not only help resolve IT failures but also implement stronger ways to curb or prevent it entirely. These professional service providers are third-party and are referred to as Managed Service Providers (MSPs) in the IT industry.

Although it sounds good on paper, hiring an MSP can be a painful process and a lot of IT leaders have been left feeling bitter towards them after bad experiences. Some MSPs are notorious for extending their work unnecessarily to stack up billable hours while others simply underperform and misalign with the business outcomes of SLAs that were discussed prior to the partnership. A major part of the problem can be finding the right MSP for your needs in a sea of MSPs that aren’t right, sometimes this might mean having less than a 10% chance of landing on the right MSP. So, how do you navigate this dilemma? How should you think of an MSP and more importantly, why should you think of an MSP in the first place?

Why MSP? Why not internal teams?

There are very valid arguments that could go both ways when thinking about Managed Service Providers. While the C-suite can force outsourcing IT overheads simply because it’s cheaper, an MSP will never truly have the company's best interests at heart like internal employees will. Not to say that MSPs are deliberately trying to run your IT to the ground but they definitely don’t understand the intricacies of the company as well as your internal department does. However, they do have way better expertise on certain matters, can be light-years ahead of your internal team in terms of handling remote location IT needs, and can be a god send for smaller companies, especially if they’re good with security and compliance.

Let’s break this down into a pros and cons list:

Pros

• It’s cheaper: Hiring an MSP can be a lot more economical than hiring FTEs who might even be lacking in expertise.
• Faster time-to-value: You don’t have to hire and train employees and rather just get an MSP with the right skillsets.
• Better accountability: MSPs can be held accountable to SLAs, OLAs, and KPIs.
• No need for heavy management: MSPs can function almost independently without needing extensive management.
• Easily replaceable: If you’re not satisfied with their work, you can replace them easily as compared to FTEs.
• Better remote location support: In case of disaster recovery and on-site support, local MSPs can be faster and more efficient.

Cons

• Shared priorities: An MSP’s attention is divided between all their clients and not just you.
• Can be difficult to work with: MSPs work with you, not for you. At times, you might struggle with conflicts of interests.
• Tech stack: MSPs have their own tech stack that they prefer. You might have to accept and adapt to this.
• Skills: You need more vendor management skills than leadership skills to handle MSPs.
• You’re to blame: If something goes south, you’re the one responsible in the organization and not the MSP.
• Not prioritized in emergency situations: An MSP will not drop their work for other clients to focus on you during emergencies.

Now, let’s do a pros and cons list for having an internal team:

Pros

• Higher dedication: An internal team is more dedicated to the cause of the company and has its best interest in mind when they work.
• Quicker availability: In case of disaster or emergency, your entire team can drop what they’re doing and prioritize the problem at hand.
• Better cooperation and synergy: After a while, the team works together well to oversee projects and complete tasks.

Cons

• Expensive: Building an IT team from scratch can be more expensive than hiring an MSP.
• Less technical expertise: An MSP is generally more proficient in terms of skills, and it takes time and resources to train your internal staff to become capable.
• Attrition is harder: In case a staff leaves or is let go, the process of hiring, onboarding, and training again is painstaking.

Synergy lies in a hybrid model

Most IT leaders agree that the right way to go about MSPs is to not entirely depend on them while not putting in a gargantuan effort to build an internal team, refusing to take any internal help. In simple words, you can think of this as co-managed IT where you can lean on an MSP for projects and expertise but lean on your internal team for all strategic project management and support. An MSP should never be a replacement for your internal team, and neither should an internal team be absurdly burdened with tasks they’re not capable of or equipped to handle. If you’re a C-suite, you at least need an IT leader to oversee the MSP and work with them to meet business goals. No MSP completely understands or even puts in the effort to understand your business end-to-end. They will stick to their SLAs and only focus on what work they’re being paid for. And it’s not fair on your part to expect anything more either.

Based on your business needs, there should at least be a minimum of system engineers, mostly for support and admin work. You can even consider the MSP for one-time specializations and installments for security and network and nothing more. If you’re a small team, you won’t need an MSP for the day-to-day and would much rather benefit from nurturing internal teams and build a culture of accountability early on. Building a strong internal team should always be a priority over splitting your bandwidth across managing MSPs when it’s not necessary.

When should you look for an MSP?

Maybe you’re still not convinced or part of the reason why you’re reading this is because you’ve wrestled with the idea of an MSP but are not sure why it makes sense to hire one. This section will try to excruciate as many reasons as possible to understand for which scenarios Managed Service Providers make sense.

The first deciding factor should be the company size. For early-stage startups, there isn’t much to it – you mostly just need compliance, basic support functions, and maybe some emergency scenarios where expert advice is needed. If it doesn’t make sense to hire a full-time IT manager (although recommended), you can have an MSP on retainer and reach out to them for any of these use cases. For slightly larger companies (<40 employees), you should definitely have an IT manager who then evaluates MSPs and oversees their work to ensure they’re held accountable to their SLAs and their work is aligning with company’s goals. When we get into the medium-sized companies' territory (>40 employees), it becomes important to have a small IT team for the day-to-day IT support while you as the IT leader balance between managing your team and MSPs if needed. As the company moves beyond the 100 employees mark, it becomes important to move in-house primarily and only rely on an MSP for specifics or expertise.

Why should you look for an MSP - An overview

There are questions you need to ask to help determine if you need an MSP:

• Are you using internal applications developed in-house or relying on external vendors?
• Is your infrastructure, database, storage, etc. on-prem or is everything hosted on the cloud?
• How many remote locations do you have and how many of them don’t have dedicated IT staff?
• Do you not have the budget to hire an experienced full-time engineer?
• Is there a knowledge and skill gap between your employees and what your IT needs are?
• Are you facing pressure from the C-suite to outsource IT because it’s cheaper and faster?
• What are your primary use cases – security, disaster recovery, infrastructure, incident response, help desk, etc.

How can an MSP help you with these?

• MSPs usually come with their own tech stack and might not be open to accommodate your internal applications unless you’re a large enterprise or the service required mandates it.
• Having physical systems vs. Having everything on cloud makes all the difference these days. The maintenance of these devices will require a remote MSP to send personnel and handle things when needed, which is cheaper and easier compared to hiring full-time staff.
• Having multiple colocations is also a reason to hire an MSP in those specific locations instead of having your staff everywhere.
• Budget is a constraint and you as an IT manager have to rely on an MSP for multiple services rather than exhausting everything on an FTE.
• If your internal team isn’t capable of handling everything in-house or there’s a knowledge gap in doing so, outsourcing this work to an MSP is probably the best option for you until your team becomes capable enough through training and upskilling.
• You can also rely entirely on MSPs for certain services while delegating other work that’s more sensitive to your internal team.
• Some decisions are not yours to make but could be a result of upper management and C-suite. If that’s the case, you can consider MSPs for trial periods or start with basic services until you build more trust with them.
• MSPs know what they’re doing and are usually great for guiding with expertise in areas where it’s necessary, mainly cybersecurity, networking, licensing & certifications, infrastructure, disaster recovery, etc. This is one of the main reasons why IT managers outsource critical work to avoid compliance concerns, security breaches, and system failures.
• Some MSPs can also help you with L1 support and handle more tickets with better expertise in general than your internal teams can.

How should you decide on an MSP + vetting process

Think of an MSP as a partner, not a provider. If you feel they’re too rigid and offer a ‘one-size-fits-all' approach to their services, then they’re probably not good. Any MSP that lets you ‘pick and choose’ instead of offering you solutions to the problems you have then they probably don’t have your best interests at heart. You want an MSP that tailors their services for your business needs and for that to happen, they need to understand your business first. An enthusiasm or willingness towards aligning their service to your goals is a good place to start.

Communication also matters a lot. Any MSP that shoves sales reps on the calls probably only cares about the money. You want to speak to technical people and get to the specifics instead of picking and choosing services explained by sales reps. When you do speak to technical folks, be aware of how they talk about their services – does it seem exaggerated, are they using too many buzzwords, are they straightforward with their answers, etc. Ideally, you’d want to speak to decision makers who’re honest about what they offer and are flexible enough to adjust to the changing dynamics of your company. Operational maturity is also a thing – if they are more mature in terms of the technology and devices they use, it might be a good fit.

Critical things to consider when you're looking for an MSP

Some questions to ask your MSP that can help with the decision-making process:

• Share your documentation, state of the company, and current challenges with meeting business outcomes. Ask them how they would solve these challenges and plan for the future?
  • This will help you understand their critical thinking and ability to tailor services for your needs. You want someone who listens to you first and tries to tailor their services accordingly and not someone who pushes non-dynamic service (unless that’s what you’re looking for).
• What is their expertise in catering to companies with your problem statement in your industry? Ask for certifications, consultant/employee profiles, etc.
  • Any MSP without any experience or expertise in solving what you’re looking for is not a great idea to indulge in.
• How would they handle certain emergency situations like incident response and disaster recovery? Give previous examples of such situations in your company to see how they handle them.
  • Real-life examples work best. Another piece of advice would be to not tell them how you solved it and see how their solution compares to yours.
• Are they open about being in a co-managed situation where they’re okay with working with you as more of a partner than a service provider?
  • Any MSP that’s capable of being a partner is willing to take more accountability and be more invested in your strategic plans.
• What are their SLAs and how will they communicate with you and the team? Are they open to a trial period before entering into a contract?
  • SLAs will keep them accountable for their deliverables and the willingness to work on trial projects represents flexibility in terms of work and what they can deliver for you.

At times, it’s not enough to talk to the MSPs because countless such conversations have helped them polish what needs to be said to sweep you off your feet. This is where reviews can be helpful. Speak to people in your own network and get references from them regarding the MSPs they trust. If you’re already evaluating a list of MSPs, reach out to their existing clients and get feedback from them about the services you’re looking for and how effective the MSP in question will be in those solutions. In fact, when you speak to an MSP, be open about the reviews you’ve received (particularly the negative ones) and see how they respond to them.

All that being said, it’s also important to limit some expectations on your end. No service provider will be an expert in everything and if they claim to be, they’re probably a ‘jack of all and master of none’. If you have multiple use cases, you will most likely have to look for multiple vendors. An MSPs tech stack is the way it is. They can customize solutions but not how those solutions are implemented i.e. the tech stack unless you’re a large IT department with hundreds if not thousands of staff. If you feel like you and your team cannot accomplish the MSPs tech stack, you should probably look for another.

How to keep MSPs accountable

An ongoing relationship with an MSP becomes subject to a lot of intricacies that need to be evaluated often. Either side losing accountability is just a recipe for disaster so there are certain steps you can take to ensure this doesn’t happen.

Consider these things when you evaluate an MSP to keep them accountable

Review contract agreements and SLAs

Create a habit of reviewing the contracts at frequent intervals. Take inventory of what was agreed and what was delivered and compare these trends over the course of your contract. If you see discrepancies or technical oddities, make sure to report them to the MSP and get answers. Schedule meetings or a call to discuss your observations and hold them accountable for any such gaps you see in their deliverables. If such patterns continue for an extended time, it might be best to go back to the drawing board and look for other MSPs.

Ticket resolutions and end user feedback

If you’ve outsourced IT helpdesk and support to the MSP, the best way to evaluate their efficaciousness is to understand what they’re doing with the tickets. Compare the data to before you contracted an MSP. Get a comprehensive view of important metrics like ticket resolution rate, ticket volume, time to resolution, ratio of resolved to unresolved tickets, etc. If any of these metrics are worse than before, that’s a cause for concern and hence you should take it up with the MSP.

What goes beyond this is understanding if these resolved tickets were simply for the sake of being resolved. The best way to do this is to reach out to your end users with an NPS survey to understand how satisfied they are with these ticket resolutions. An average or below average response is another cause for concern. Keep in mind, one of the reasons why shadow IT happens is when an MSP that works specifically to handle support and their SLAs dictate overall tickets resolved and not user satisfaction, they simply close the tickets with generic responses or say, “it’s not in scope for the team”. However, it they’re taking longer to resolve certain tickets or provide L1 support, it might be because of knowledge gaps in their team and it’s best to discuss this with them. All these reasons are strong enough to reconsider your contract.

How are they handling critical services

Some of the MSPs will seem more like roadblocks than solutions during incident response scenarios or ransomware attacks. This is where the capabilities of the MSP should shine and not weigh heavy on your shoulders instead. How was their disaster recovery plan? What was their response rate to the incident? How swiftly did they get everything back on track? Are they willing to prioritize you during such scenarios and work overtime to make sure everything is restored or simply brush things off saying it’s not in their scope? A surefire way to lose trust in an MSP is their ability to handle such scenarios and if it so happens, it might be time to look for a new one.

Communication is key

The POC at the MSP is a critical part of a healthy relationship. If your interactions seem to be one-sided with not much input or interest from the one handling your account, it can turn away the attention from everything else, despite how good a job they’re doing. Transparency is key when it comes to communication and the absence of that creates problems that shouldn’t exist at all. Even in situations where the MSP falls behind but is willing to take responsibility for it and communicate well what went wrong, you have enough reason to give them another chance. Another important part of communication is respect – whether or not they are disrespectful towards you and your team.

How to deal with an existing MSP

If you’ve recently joined an organization and they already have an MSP, you will need to establish a relationship with them as the new POC and evaluate how effective they had been before you came in. Review pervious contracts and SLAs. Understand if their implementations and tech upgrades are justified or are they just racking up costs to get paid.

What model are they operating with – AYCE, billable hours, etc., and what is their pricing breakdown? What’s helpful is to evaluate them against other MSPs and see for yourself if their position seems justified. Understand support functions, end user feedback, tech stack, technical advice, and strategic plans for the company.

What’s more, you can have open conversations about what they think about the current state of the company and how their relationship with the previous IT manager in your position was. What do they think is best for the organization’s IT needs and what can you do to help them achieve it for you. Last but not least, communication – how well do they communicate with you and your team.

Moving on from an MSP

The point of having an MSP is that it eventually makes your life easier as an IT manager and you get the proper assistance you need to meet the desired outcomes. If that’s not happening, you need to reconsider your contract with the current MSP and ask the tough questions. You’re paying for the services and SLAs so you’re entitled to being dissatisfied with the outcomes if they’re not what you want them to be.

What’s most important is transparent communication from both sides. Siloed conversations lead to misunderstandings and misinterpretations that can cause a disconnect between what’s expected and what’s delivered. This is generally the primary reason why IT leaders lose trust in their MSPs and it’s rarely because of their incompetence. A lot of issues can be solved if only certain communications roadblocks are overcome from both ends and if you’re discontent with these services, it’s best to best as vocal as you can about it.

• List reasons why you’re not happy with them.
• At point did you start being dissatisfied with their service and try to figure out if there were external factors affecting this change?
• What do they think has happened or caused this change? Is it something you’re not holding up as your end of the bargain? It’s important to also consider the fact that you might be a hindrance as well.
• Are they accepting of your dissatisfaction towards their work and are they willing to improve on it?
• Is it a conflict of interest or personality that cannot be helped and it’s better to just go your separate ways?

With established MSPs, the problem is often more about relationship dynamics and less about technical ability. This also includes disrespect towards you or the team, and a rude, dismissive, and arrogant attitude that makes it difficult to work with them. Mind you, this might even be the case from their perspective so go into these conversations with an open mind. Be willing to give them another chance after fruitful discussions and only cut ties when you think all possibilities of improvement are exhausted.

Frequent changes to tech stacks or pricing plans could also be a reason for reconsiderations. Not just that, but them insisting on constant changes to SLAs and reassigning workers to your project makes working with them frustrating and unreliable. Declining expertise, frequent failures to meet SLAs, increasing ticket volume and time to resolutions, dissatisfied end users – all these are valid reasons to look for a new MSP or move processes in-house.

The actual transition process should be more meticulous than abrupt. Don’t let go of the MSP without a proper plan because you’ll be the one responsible for the sudden aftermath of impulsive decisions. Figure out beforehand that you want to let go of the MSP and get back into the interview/discovery process of a new MSP. If you’re thinking of moving things in-house, take time to establish new processes and prepare your team for when you end the contract. After you’ve vetted a new MSP and finalized the agreements, notify the current MSP with about 30 days remaining on their contract that you won’t renew and talk to them clearly about why you made this decision. All things considered, this should start a smooth transition period for you and the entire team.

Final thoughts on MSPs

No matter how great an MSP is, they will never truly replace your internal team. The ‘big picture’ advice is to invest in a highly skilled team with SMEs and a wide range of experienced professionals like solution architects, cybersecurity engineers, implementation analysts, network engineers, and support staff. The alignment that your internal team has with business goals and priorities can never be replicated for an MSP. As your company scales, keep MSPs around for critical stuff and as a part of your IT strategy that we discussed in this article but, overall, your team will be your most valuable asset.

TL;DR

• Why Hire an MSP?
  • Cost-effective IT management, security, and disaster recovery.
  • Ideal for startups and small teams lacking expertise.
• Challenges & Risks
  • Some MSPs overcharge or underperform.
  • Misalignment with business goals and SLAs.
• MSP vs. Internal Teams
  • MSPs: Cheaper, faster, and accountable but divided attention.
  • Internal Teams: More aligned but expensive and resource-heavy.
  • Best Approach: A hybrid model—internal teams for strategy, MSPs for expertise.
• When to Hire an MSP
  • Early-stage: Use MSPs for compliance & emergencies.
  • Growing teams: Have an IT lead oversee MSPs.
  • Larger companies: Mix in-house IT with MSPs for specialized tasks.
• Choosing the Right MSP
  • Find a partner, not just a provider.
  • Check SLAs, reviews, and client references.
  • Ensure a trial period and strong emergency response.
• Keeping MSPs Accountable
  • Regularly review contracts, SLAs, and performance.
  • Track response times and user satisfaction.
• When to look for a new MSP
  • Failures to meet SLAs, bad service, technical inconsistencies
  • Conflict of behavior, disrespectful, dismissive, arrogant, etc.

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