How to Do MSP Outsourcing Without Compromising Quality

Outsourcing has become a common strategy for Managed Service Providers (MSPs) aiming to enhance efficiency, access specialized skills, and manage costs. However, the success of outsourcing hinges on maintaining the same high standards of quality that clients expect from in-house services. This can be challenging, as it requires careful planning and management to ensure that outsourced services align with your operational standards and business goals.

In this article, we will explore the foundational principles of quality assurance for MSP outsourcing. We’ll delve into how to set and measure quality standards, assess internal capabilities versus external expertise, and manage the various risks associated with outsourcing. Additionally, we’ll discuss best practices for maintaining service reliability, security, and alignment with your business objectives.

Foundations of Quality Assurance for MSP Outsourcing

In MSP outsourcing, quality is not just about meeting basic expectations—it’s about ensuring that the outsourced services meet or exceed the standards that the MSP would provide in-house. Quality encompasses several dimensions:

1. Technical Proficiency: This involves having the right skills and expertise to handle complex IT systems and processes effectively. It’s critical that outsourced professionals possess the technical know-how to manage and support the specific technologies your MSP deals with.
2. Service Reliability: Outsourced services must be consistent and dependable. This means that the external team should maintain uptime, minimize disruptions, and adhere to agreed service levels.
3. Responsiveness and Support: High-quality outsourcing for MSPs requires prompt and effective communication. The external team should respond quickly to issues, provide timely updates, and be available for support when needed.
4. Alignment with Business Objectives: The outsourcing partner should understand and align with your business goals. This includes tailoring their services to support your strategic objectives and adapting to any changes in your business environment.

Setting Clear, Measurable Quality Standards

Establishing quality standards before engaging with an outsourcing provider is crucial for maintaining high service levels. Here’s how to set these standards effectively:

1. Define Specific Metrics: Identify the exact metrics that will measure quality. These could include response times, resolution times, error rates, customer satisfaction scores, and compliance with service level agreements (SLAs). Metrics should be specific, quantifiable, and relevant to the services being outsourced.
2. Develop Detailed SLAs: Service Level Agreements should outline all aspects of service delivery, including performance benchmarks, reporting requirements, and escalation procedures. Ensure SLAs are detailed and cover all critical aspects of service delivery.
3. Establish Regular Review Processes: Implement a system for ongoing evaluation of the outsourcing partner’s performance. This includes regular check-ins, performance reviews, and feedback mechanisms. Use these reviews to assess adherence to quality standards and make adjustments as necessary.
4. Implement Quality Assurance Protocols: Develop and enforce protocols that ensure the outsourcing partner meets the defined quality standards. This might include periodic audits, third-party assessments, and quality control checks.

Analyzing the Core Competencies to Outsource

According to MSP outsourcing best practices, you should focus on functions that will benefit most from external expertise, without compromising quality. High-impact functions typically include:

1. Non-Core Activities: These are tasks that are necessary but not central to your MSP’s value proposition, such as certain administrative functions, which can be efficiently managed by external specialists.
2. Specialized Skills: Tasks requiring specialized skills or knowledge that are not available internally, such as advanced cybersecurity analysis or complex cloud migrations. Outsourcing these to experts can enhance service quality.
3. Scalable Services: Functions that need to scale up or down based on demand, such as help desk services or network monitoring. External providers can often scale their services more flexibly than in-house teams.

Assessing Internal Capabilities vs. External Expertise

Balancing internal capabilities with external expertise is critical for effective outsourcing:

1. Evaluate Internal Resources: Assess the skills, expertise, and capacity of your current team. Identify areas where your team lacks the depth or breadth required to deliver high-quality services.
2. Identify Gaps: Determine where external expertise can fill gaps. Look for areas where specialized knowledge or additional resources are needed to meet quality standards.
3. Select the Right Partner: Choose an outsourcing partner with a proven track record in the areas where you need support. Ensure they have the necessary expertise, resources, and quality assurance processes to deliver high-quality services.
4. Maintain Oversight: Even with outsourcing, maintaining a level of oversight is essential. Ensure there are mechanisms in place for monitoring performance, providing feedback, and ensuring alignment with your quality standards.

Approaches to Mitigating MSP Outsourcing Risks

Understanding and mitigating risks is crucial for maintaining service quality when outsourcing. Here are key risks to consider:

1. Quality Variability: Outsourced services may vary in quality compared to in-house operations. Variability can arise from differences in processes, standards, or the skill levels of external personnel.
2. Communication Breakdowns: Poor communication between your team and the MSP outsourcing provider can lead to misunderstandings, delays, and errors. This risk is particularly significant in roles requiring detailed knowledge transfer or coordination.
3. Compliance Issues: External providers may not fully comply with regulatory requirements or internal policies, leading to potential legal and compliance issues. This risk is heightened in sectors with strict regulatory demands.
4. Security Vulnerabilities: Outsourcing for MSPs can introduce vulnerabilities if external providers don’t adhere to stringent security practices. This risk is critical for functions involving sensitive data or systems.
5. Dependency on External Providers: Over-reliance on outsourcing partners can create vulnerabilities if those partners face operational issues or if their services do not meet the agreed standards.

Analyzing Risk Profiles for Different Outsourced Roles (e.g., Help Desk, Security, NOC)

Different outsourced roles come with distinct risk profiles:

• Help Desk: Risks include inconsistent support quality, poor customer service experiences, and delays in issue resolution. Ensuring a well-defined escalation process and clear performance metrics can mitigate these risks.
• Security: Outsourcing security functions introduces risks related to data protection and incident response. Ensuring the provider has robust security measures, regular audits, and compliance with security standards is essential.
• Network Operations Center (NOC): Risks here involve potential lapses in monitoring and response times. Effective risk management includes setting stringent performance benchmarks and ensuring continuous monitoring of network health.

Crafting Contracts with Built-In Quality and Risk Clauses

A well-structured contract is fundamental to managing outsourcing risks:

1. Define Clear Expectations: The contract should outline specific performance standards, quality benchmarks, and responsibilities. Clear definitions help prevent misunderstandings and set expectations for service delivery.
2. Include Quality Assurance Provisions: Incorporate clauses that address quality control measures, regular performance reviews, and penalties for non-compliance. These clauses should also define the process for handling quality issues and corrective actions.
3. Risk Allocation: Clearly specify how risks are allocated between your organization and the outsourcing partner. This includes detailing responsibilities for compliance, security breaches, and service disruptions.
4. Termination and Transition Clauses: Include provisions for contract termination and the transition of services. This ensures that if a partnership ends, there is a clear plan for transferring responsibilities and minimizing disruption.

Implementing MSP Outsourcing Best Practices in Security

Security must be a foundational aspect of any outsourcing arrangement, especially for MSPs dealing with sensitive data and critical infrastructure. Here’s how to integrate security effectively:

1. Define Security Requirements in Contracts: Clearly specify security protocols and standards in the contract with your outsourcing partner. This includes adherence to industry standards such as ISO/IEC 27001 for information security management and specific security practices relevant to your sector.
2. Embed Security Protocols in Service Delivery: Ensure that security practices are incorporated into every aspect of service delivery. This could involve setting up secure access controls, encryption for data in transit and at rest, and secure communication channels. The outsourced team should follow the same security policies as your in-house team.
3. Implement Secure Access Controls: Use role-based access controls (RBAC) to limit access to sensitive systems and data. Ensure that only authorized personnel from the outsourcing partner have access to the necessary resources and that access rights are regularly reviewed and updated.
4. Data Protection Measures: Enforce data protection measures, including data masking, tokenization, and regular backups. The outsourcing partner should implement these measures to protect sensitive information from unauthorized access and breaches.
5. Incident Response Planning: Establish and document a clear incident response plan that includes procedures for both your team and the outsourced provider. Ensure that the partner is prepared to respond quickly to security incidents and breaches, and that they participate in regular incident response drills.

Evaluating Outsourcing Partners’ Security Posture and Compliance with MSP Security Best Practices

Before entering into an outsourcing agreement, thoroughly assess the security posture of potential partners:

1. Conduct Security Assessments: Perform a detailed security assessment of the outsourcing partner. This should include evaluating their security policies, incident history, and the effectiveness of their security controls. Look for certifications such as SOC 2 or Cyber Essentials, which indicate adherence to high security standards.
2. Review Compliance with Industry Standards: Ensure that the MSP outsourcing partner complies with relevant industry regulations and standards. This might include GDPR, HIPAA, or PCI-DSS, depending on your industry and the nature of the data being handled.
3. Evaluate Security Practices: Review the partner’s security practices, including their approach to risk management, employee training, and data handling procedures. Confirm that they use up-to-date security technologies and follow best practices for safeguarding information.
4. Request Third-Party Audit Reports: Ask for recent third-party audit reports to verify the partner’s security practices and compliance. These reports provide an objective assessment of the partner’s security controls and can help identify any potential weaknesses.

Ensuring Accountability with Your Outsourcing Partners

An effective Service Level Agreement (SLA) is crucial for maintaining high service quality and ensuring accountability. Here’s how to craft SLAs that meet these requirements:

1. Define Quality Expectations Clearly: SLAs should detail the expected quality standards for the services provided. This includes specific performance metrics such as response times, resolution times, and error rates. The more precise the expectations, the easier it will be to monitor and enforce them.
2. Specify Penalties for Non-Compliance: Include clauses that outline the consequences for failing to meet the agreed standards. This could involve financial penalties, service credits, or other compensatory measures. Clearly defined penalties help ensure that the provider remains committed to maintaining high quality.
3. Detail the Service Scope and Limits: Clearly define what is included in the service scope and what is not. This prevents misunderstandings about service responsibilities and helps manage expectations.
4. Include Escalation Procedures: Establish a process for escalating issues that cannot be resolved at the initial support level. This should outline how and when problems are escalated to higher levels of management and the expected response times for these escalations.

Key Metrics and KPIs to Include

To effectively monitor quality, the SLA should incorporate specific metrics and KPIs:

1. Response and Resolution Times: Metrics such as the average time to first response and average resolution time are critical for assessing the efficiency of the outsourcing partner. These should be defined for different types of issues, such as critical incidents versus routine requests.
2. Customer Satisfaction Scores: Include measures of customer satisfaction, such as Net Promoter Score (NPS) or Customer Satisfaction Score (CSAT). These scores provide insights into the end-user experience and overall satisfaction with the service.
3. Compliance Rates: Track adherence to compliance requirements, especially in regulated industries. Metrics might include the percentage of audits passed or compliance incidents reported.
4. Error Rates: Monitor the frequency of errors or service failures. This could include metrics on system outages, performance issues, or incorrect service configurations.
5. Service Availability: Include metrics on service uptime and availability. This is particularly important for critical services where downtime can significantly impact operations.

Strategies for Regular Quality Reviews

Maintaining accountability involves regular reviews and continuous feedback:

1. Schedule Regular Review Meetings: Set up recurring meetings with your outsourcing partner to review performance against the SLA. These meetings should be used to discuss successes, address any issues, and identify areas for improvement.
2. Use Data-Driven Reviews: Base discussions on data from the agreed-upon metrics and KPIs. This ensures that evaluations are objective and grounded in actual performance.
3. Encourage Open Communication: Foster an environment where both parties can openly discuss issues and provide constructive feedback. This transparency helps in addressing problems early and collaboratively.
4. Implement a Feedback Loop: Create a structured feedback loop where input from both parties is regularly collected and acted upon. This includes gathering feedback from end-users and internal stakeholders to assess the impact of the outsourced services.

Advanced Techniques for Managing Outsourced IT Teams

Ensuring Cultural and Operational Fit

A successful integration of outsourced MSP teams into your MSP operations hinges on aligning both cultures and operational practices. Start by evaluating the cultural compatibility between your in-house team and the outsourced professionals. Cultural fit involves understanding and aligning with each other’s working styles, communication preferences, and organizational values. This alignment can be achieved through regular, open discussions about company culture and expectations, as well as including outsourced team members in team-building activities and corporate events.

Operational fit requires a deep dive into how work processes and methodologies align. Assess whether the outsourced team can adapt to your MSP’s operational procedures and tools. For instance, if your MSP uses specific project management software or development frameworks, ensure the outsourced team is proficient in these or can quickly get up to speed.

Tools and Platforms to Enable Effective Collaboration

Effective collaboration between in-house and outsourced teams demands the right set of tools and platforms. Start with a robust communication platform that supports real-time messaging, video conferencing, and file sharing. Tools such as Slack or Microsoft Teams can facilitate daily interactions and quick problem-solving.

Project management tools like Jira or Asana help track tasks, set deadlines, and manage project progress. These platforms enable transparency and ensure that everyone is aware of project statuses and responsibilities. Additionally, incorporating collaboration tools for document sharing and joint editing, such as Google Workspace or SharePoint, ensures that all team members can work together on documents and projects in real-time.

For quality control, consider implementing a shared dashboard that displays key performance indicators (KPIs) and metrics related to project progress and service quality. This visibility helps both teams monitor performance and address issues promptly.

Providing Ongoing Training on Your Standards

To maintain high standards, it’s essential to offer ongoing training to outsourced professionals. Start by developing a comprehensive training program that covers your MSP’s quality and security standards. This program should include detailed information about your internal processes, security protocols, and quality expectations.

Training sessions can be conducted through a mix of webinars, online courses, and hands-on workshops. Regular updates and refresher courses should be part of the training to keep the outsourced team informed about any changes in procedures or standards. Additionally, provide access to internal resources, such as documentation, guidelines, and best practice manuals, to support continuous learning.

Encouraging Knowledge Sharing

Promote a culture of knowledge sharing between in-house and outsourced teams to enhance collaboration and efficiency. Set up regular meetings where both teams can discuss challenges, share insights, and provide feedback. These meetings foster mutual understanding and help both teams learn from each other’s experiences.

Implement a mentorship program where experienced in-house staff can guide and support outsourced professionals. This program can facilitate skill development and ensure that outsourced team members have a reliable point of contact for questions and guidance.

Create opportunities for cross-team collaboration on projects or problem-solving tasks. Jointly working on assignments helps bridge any gaps in knowledge and fosters a sense of shared responsibility for achieving goals.

Conclusion: How to Outsource MSP Services?

Successfully outsourcing for MSPs involves a delicate balance of maintaining high service quality while leveraging external expertise. To achieve this balance, MSPs must establish clear and measurable quality standards from the outset. Assessing internal capabilities against external expertise is also crucial. Outsourcing should be targeted at areas where specialized skills are required or where scalability is beneficial, without undermining the quality of service provided.

And not to suffer from quality risks, make sure to collaborate with an experienced MSP outsourcing partner like Scaled – we’ll make your team smarter, stronger and faster.