Once you’ve made the decision to outsource the management of your IT services and selected a partner that you believe is a good fit for your needs the next logical step is to establish a clear managed IT services contract.
What Is A Managed IT Services Contract?
A managed IT Service Contract is a written agreement defining what services will be provided and how they will be delivered so that both parties are clear as to the expectations and obligations.
It’s safe to assume when a new agreement is being considered that both parties want the relationship to be a success. Communication is a critical part of any relationship. Think of the contract or agreement as a baseline written communication established to ensure that both parties clearly understand the arrangement. You are familiar with the saying “get it in writing.” It applies to many things but most especially a business arrangement with another party. It’s important to be - as they say - on the same page.
Where To Begin?
Start with the very basics. Begin with the overall objectives of the organization and understanding the existing infrastructure. If the managed IT service provider hasn’t already done so, a thorough assessment of the organization’s current systems, processes, recurring issues, pain points, etc. should take place. This would be followed by an honest discussion of expectations & next steps from both parties. Include both short and longer-term objectives.
What Should Be Included?
Depending on the size of the business, the nature, and complexity of the arrangement and many other factors, the agreement or contract can be made up of several components. Here are some of the components we recommend as critical to a clearly defined managed IT services contract:
Definition of Services – This pretty much sounds like what it is. What is the client (your organization) getting in the way of services? Does the contract cover network monitoring and management, cybersecurity, help desk services, routine maintenance, updates, strategic planning and recommendations to infrastructure, etc.? The more specific, the better. If IT equipment is involved in service coverage, define which pieces of equipment fall within the agreement and spell out any that do not.
Term of the Contract – Terms identify the period of time the contract covers. Terms of agreement should include when the contract goes into effect and when it ends. If exceptions will be made, an explanation of acceptable reasons for termination should be identified.
Responsibilities of Each Party – This section might include key contacts for both parties involved and the roles and responsibilities for each. Consider building a “call sheet,” which will provide direction on which contacts to reach out to on both sides for specific tasks, approvals, alerts, etc. Reporting would be a perfect example of an expected responsibility of the IT managed service provider. How often reports are provided and who is the individual responsible for providing reports on behalf of the provider.
Costs – When costs are clearly established in the contract, both parties can avoid haggling about invoices down the road. The cost of service section of the contract should specify when payments will be made, as well as how they will be made. For example, payments will be made on the 15th of each month via check, ACH, etc. As there may be events or issues that occur outside of the terms of service that may need to be addressed, clarify how they will be handled - i.e., quoted and billed separately.
Coverage Hours – Detailed hours for support eliminate confusion and make it clear to both parties what the expectations are for coverage hours. It is also appropriate to include any additional information or policy on providing service outside of the normal expected hours. If a separate component of the contract does not cover an established agreement for expected response times, it should be addressed in this section.
Issue Resolution –Define procedures for how issues will be handled and resolved when they occur. This might include procedures for who reports the issue, the amount of time the provider will respond in, how an issue “level” might be determined and assigned and how the provider intends to track and manage issues through their resolution.
Confidentiality – Formerly detail that both parties will make all reasonable effort to maintain the confidentiality of the details of the agreement, ensure that proprietary information remains confidential - specifically that the service provider will not disclose client information. Failure to uphold confidentiality agreements can result in legal issues, so this language is particularly important.
Managed services agreements are beneficial to both parties. They provide clarity, direction, and structure. A well-documented and managed contract creates a strong foundation for a healthy and mutually beneficial relationship. Make sure to have your contract reviewed by an attorney and keep it up-to-date by reviewing regularly.