What is a Managed Service Provider (MSP)?
July 28, 2023
A managed service provider (MSP) is a third-party company that offers outsourced IT services. Those services can vary from MSP to MSP as each has their own unique set of expertise. Examples include things like IT infrastructure management (e.g., managing wireline services or on-prem security like firewalls) to remote monitoring of devices via MDM management and build-outs. For organizations that have internal resource strain and struggle to maintain their in-house IT systems, MSPs are a viable option to help with outsourcing these tasks.
With the growth of remote work and hybrid work, MSPs have started to provide end-to-end device lifecycle services in response. For many MSPs, this isn’t an entirely new concept as many may have been procuring devices for their clients for decades and possibly managing their corporate MDM instances. But in order to support a global organization, there are new variables the MSPs are having to consider if they are to provide these services.
As an IT admin or procurement manager, it is vital to understand the benefits and constraints of partnering with an MSP to provide device lifecycle management.
Benefits of Managed IT Services
So, what is a managed service provider’s main function? As shared before, MSPs act as on-demand IT teams. Oftentimes, IT teams will find themselves strained on time as they are understaffed or have a lack of competence around a specific IT need. This is where an MSP can help. Each MSP has a unique set of expertise to fill the gaps in any IT org.
The technical support they will provide day-to-day to your organization is agreed upon and outlined in a statement or scope of work, based on your unique business technology needs and budget. To remain cost-effective and improve efficiency, most MSPs will have a specific device catalog that clients can choose from and will use remote monitoring and management (RMM) software to oversee their clients’ information technology functions.
Many small and medium-sized businesses (SMBs) who rely on MSPs to provide things like infrastructure management or device management have experienced the following benefits:
• Improved cloud service quality: Avoided extended downtime or interruptions
• Reduced costs: Pre-aligned on budget and predictable monthly spending—most MSPs offer pricing via a software-as-a-service (SaaS) subscription model; reducing headcount* costs
• Enhanced productivity: Given time back to internal IT teams to focus on value drivers; filled in-house staffing shortages
Managing and monitoring the servers and end-user equipment while implementing a cybersecurity layer to your hardware/software are the typical SOW expectations. But managed IT service providers can do a mix of some or all of the following:
• IT support & maintenance (software upgrades, repairs, replacements)
• Security service provider (data backup & recovery, remote firewall administration, disaster recovery plans)
• Data storage (warehousing) & data center management
• Cloud computing transformation
• Connectivity (network monitoring)
• HR & Payroll
* It takes IT teams five (5) hours a year per remote worker to manage the logistics associated with end-user computing. That means for every 1K employees, it takes 5K hours to support them annually. This amounts to 2.5 full-time employees, which is $250k in headcount costs assuming an average salary of $100k.
Feature Breakdown: Metrics to Assess When Choosing Your Managed Service Provider (MSP)
But to actually reap these productivity benefits, it should be noted that not all MSPs are created equal. Different MSPs provide different levels of coverage, so when you are considering a partner for your device lifecycle management, here’s what you need to look out for.
Global Device Procurement
Before you ship equipment to your employees, you need to find and purchase the tools your company needs to operate effectively. It’s best to partner with an MSP that can manage the sourcing for you, as working with these vendors is challenging and time-consuming—particularly if they are international.
Here are just some of the vendor management best practices that vary by country:
• Is buying local more cost-effective than importing?
• Do they have minimum inventory level holds or do they opt to order as needed?
• What is the lead time for custom orders?
• Asset variability (e.g., different keyboard alphabets)
• Reseller options (some of which operate differently, or don’t operate at all, in certain countries)
• Does the reseller have enrollment capabilities?
Unfortunately, most MSPs were not purpose-built to manage procurement on a global scale. This is a big gap for companies that operate in more than one country—and may hinder a company’s ability to even consider making an international hire, making their talent pool more shallow. MSPs typically have regional coverage; companies often use one MSP for one geography and then a different one for another.
And as far as the catalog of devices offered, they are not always vendor-agnostic. They may push the inventory that they have already bulk purchased from the original equipment manufacturer (OEM), which may or may not be the right type of device for your business needs.
On top of all this international procurement complexity is the added need to negotiate the cost per asset. Surely, a strapped IT department does not have time to make the best purchasing and pricing decisions.
Peripherals like headsets, keyboards, and microphones are yet another piece of IT inventory that need to be acquired. The percentage of MSPs that cover the full range of peripherals is roughly 50%—some MSPs do, others do not. This means IT teams may need to manage the sourcing and delivery of these items themselves because, without an office, employees can’t just stroll into the messy-but-useful IT closet.
As it does not directly support IT needs, this is rarely offered by MSPs. This makes perfect sense in a world where everyone was in the office and had a dedicated desk and chair. But with the rise of the home office? There are some growing pains, and we mean that literally. 41% of those working from home have reported experiencing new or elevated pain in their back, wrists, or shoulders... yet more than 41% haven't taken any steps to improve their workspace to address these issues.
After all, if their company isn’t offering enhanced workspace accommodations, some may not feel the need to pay out-of-pocket. So they’ll just settle for the couch, even if it’s at the detriment of their comfort.
CYOD / Employee Self-Service Interface
A choose your own device (CYOD) interface allows remote employees to pick the laptops, smartphones, or other peripherals they would like to use from a catalog of options already approved by the company. CYOD strikes a balance between the organization’s need for integrated hardware and apps and the employee’s interest in being able to use the device for non-work-related activities. It’s the power of choice while still confining users to stay within the cybersecurity parameters set by IT.
Unfortunately, managed service providers do not typically offer a self-service portal for employees to pick their preferred equipment or request peripherals. Instead, each MSP will have their own unique channel of communication and/or customized solution. This is not ideal for an organization looking to centralize their device lifecycle management.
Centralized Inventory Management
Having a central hub that shows your organization’s inventory levels across all product SKUs is essential to support remote and hybrid work. Tracking inventory is hard, to put it simply. When the assets are no longer sitting in an office IT closet, it’s even harder. (Psst: Even before the pandemic forced everyone to work from home, 30% of IT assets were "ghost assets”, meaning they could not be physically accounted for yet were on your asset list. Meaning you’re paying for something that you don’t have.)
As mentioned before, some MSPs will have a customized solution. However, you will find no consistency from one MSP to the next, meaning if you are working with two or more MSPs, it’s unlikely their systems will “play nice” together. The work to get a macro-view of your used and new inventory will require manual intervention.
For companies that are scaling and in heavy hiring mode, especially globally, it would be beneficial to know which laptop models are running low in each of your storage locations. Conversely, if a company has been dealing with layoffs, knowing when assets are returned to the warehouse and if they have been cleaned and wiped is key to maintaining security compliance. Not having this single source of truth of the inventory counts for new, returned, and repaired devices is becoming a major limitation—and is the place where many compliance auditors are finding companies have a gap.
How the MSP chooses to store your items can vary, but for the most part, MSPs offer warehousing. They may partner with a different warehouse provider; in these cases, they are geographically limited and cannot store your devices across the globe. Not being able to store in places that are closest to your workers can create long-term shipping costs (and delays in getting the equipment on time).
Maintaining minimum levels of inventory is an important consideration, especially when looking into moving into new geographies. It’s a best practice to get all the information on their warehouse management techniques before partnering with a particular MSP, to make sure your business needs match their capabilities.
Yet another thing to worry about before the device is even shipped to the employee! Employees need certain software and tools to get their job done, and how those software and tools are installed on a corporate device is known as imaging. “Zero-touch” imaging refers to the ability of IT admins to manage and monitor the apps on an employee device remotely. Imaging is a very bespoke service that many IT equipment management providers try to avoid, so whether it is offered or not greatly depends on the MSP.
Remote imaging requires a rigorous intake to learn the nuances behind your requirements (e.g., how old is your current technology, do you have non-cloud-based apps, industry security regulations) to see if achieving zero-touch deployment is even possible. If not, they will need to rely on older imaging techniques to bridge the gap; known as “monolithic” imaging, which requires plugging in a USB to each device.
If imaging is not offered by the MSP, then the IT department is responsible. You can imagine how cumbersome this is with a distributed workforce, as this is yet another administrative task that IT has to perform before shipping out the laptops. Speaking of...
Onboarding (Ship to Employee)
Shipping IT assets (and doing it strategically) to employees is a critical offering in today’s work landscape. With a distributed workforce, shipping costs increase exponentially because they are attributed to each employee (as opposed to a bulk shipment to a single office location). Most remote organizations spend $100 annually in shipping for each remote worker. That’s $100k in shipping costs for every 1K employees.
MSPs help alleviate this burden by taking on the shipping and logistics for you. The geographic limitation of the MSP will apply here, so it is important to understand their capabilities and the associated cost to do things like expediting.
A major benefit of an MSP is that they manage the break/fix of an IT asset. Something will break at some point. What matters is not if it happens (it will), but how your MSP can respond to it. If they are too slow, then the worker is stuck in productivity limbo. Or worse, they rely on their personal device to try to get work done, which opens up to door to security vulnerabilities.
The repair cycle for remote workers has been complicated due to the sheer distance. An expedited loaner process is key to keeping things moving, but MSPs typically opt to debug and investigate live to avoid added costs. Meanwhile, that employee is blocked until the problem is actually fixed.
Some MSPs handle laptop retrievals... laptops being the operative word.
According to Gartner analysts that we’ve spoken with, many enterprises have a 50% laptop retrieval rate—at best. Assuming a 15% annual employee churn rate across 1K employees, IT handles 150 laptop retrievals annually. If we optimistically say they will have only a 30% loss rate, that still means 45 laptops are never getting returned. With laptops costing on average $1.5K, that’s $67.5K in IT assets annually.
This doesn’t even count high-end monitors (which are much more expensive than laptops) and high-cost peripherals—according to Gartner, those are a lost cause. They are never collected!
So clearly, the asset retrieval process could be improved and there is a lost opportunity for saving revenue here.
Some MSPs can manage cleaning and wiping the returned asset so it is ready for redeployment; that is, ready to be used by a new owner.
It is important to understand MSPs’ wiping capabilities. Mac devices follow similar procedures but Windows devices are different depending on the model. Ensuring that the MSP you are partnering with not only understands device-specific wiping procedures but also, if required, can follow certified procedures is critical to security and compliance.
Additionally, depending on whether your devices are zero-touch, after wiping you may also need to re-image the device. Ensuring they can perform the necessary re-imaging is essential to making the device redeployable.
Disposal / Recycle
MSPs usually have an IT asset disposition (ITAD) partner to manage the process of reusing, recycling, repurposing, repairing, or ultimately disposing of unwanted IT equipment. These end-of-life assets need to have their corporate data wiped, immediately. Then, if disposal is the ideal option for that device, the hardware needs to be physically destroyed so that it is rendered unusable and the data unrecoverable.
These partners would, again, be regional.
In order to drive the most efficiency, it is essential that as many manual processes can be automated as possible. This is especially relevant when you are trying to hit tight new hire start dates while also managing device procurement lead times and shipping timelines. Generally, most manual labor and communication can be avoided through integrations.
Areas to consider automation are:
• HRIS (Human Resources Information Systems): For most customers we talk to, this is the first place new hire information is added. By integrating into an HRIS system, the manual process of contacting HR via Slack or email (or having HR create a ticket and then having to go to your partner to initiate the order) can be eliminated.
• ITAM (IT Asset Management): As we mentioned before, asset and inventory tracking is very important in relation to security and compliance. To nail compliance, many businesses have some form of asset management system. Through an integration to an ITAM, any changes to assets (location, condition, etc.) can be pushed and pulled instead of having to manually import data… if that is even available from your partner.
There are more examples, but at the end of the day, ensuring seamless communication and data flow is critical to driving efficiency and mitigating manual work.
MSPs will sometimes have integrations but generally, these are not out of the box. Meaning that either your team or potentially the MSP will have to custom build them—which will cost both valuable IT time and, if built by the MSP, budget.
Ongoing Support Services
Last but not least: Your business needs stellar customer support and service. That’s why almost all MSPs have some type of help desk. No longer will your team have to figure out why certain packages haven’t arrived and go back and forth with logistics providers.
Is Relying on a Managed Service Provider the Best Option for Outsourcing Your Remote Employee Equipment Lifecycle?
Short answer: No—unless you don’t plan on growing and only need the bare bones right now. MSPs are often limited both in terms of their processes that were built for an office-centric reality, and limited geographically, requiring the need to partner with multiple MSPs which becomes highly complex to manage.
As we have outlined, equipping employees with the devices they need (and managing the interruptions when it does not) is time-consuming. This administration lift can definitely be taken off IT’s shoulders by partnering with a managed service provider. But there are definitely some limitations, some of which may be detrimental to the growth of your business:
• A lack of procurement flexibility
• Geographical constraint
• No employee self-service capabilities
• Limited to no integrations
• Service they can provide, but not their specialty
MSPs have played a significant role in supplying and supporting corporate end-users with IT equipment, but most traditional service models were built for an in-office workforce. In today’s landscape, your managed IT services provider needs to be able to support all of the above features. If not, you will struggle with scalability.
With Firstbase, you can enjoy all the benefits that an MSP can provide—procurement and storage support, industry expertise, and the ability to outsource low-value tasks—without the gaps in feature offerings. But don’t take our word for it. Take a guided tour to see for yourself.