Ready to Sign a Managed Services Contract? Here’s What’s Important

I recently refinanced my home mortgage, and as someone who is not an expert on financial paperwork, let me tell you, it was overwhelming.

managed services contract

The title agent briefly explained the purpose of each page th

at required my signature, but I maybe understood 30% of what I was signing for.

For many, especially if you aren’t familiar with technology, signing a managed IT services contract can feel the same way.

You know it’s the last step before you officially become a customer of your managed IT services provider (MSP), but what actually happens?

At The KR Group, our managed IT services team reviews the contract with you before you sign on for our services. Specifically, we — or whichever MSP you work with – will ensure you understand the following areas of your contract:

  1. Hardware and software requirements 
  2. Hours of service
  3. Cost of managed IT services
  4. Length of contract
  5. Exit clause
  6. Changes to the original agreement

Read our complete guide on signing up for this IT solution for a more in-depth analysis of our managed IT services contracts.

Of course, you’ll also want to read through your contract in its entirety and ask any follow-up questions you have.

 

Hardware and Software Requirements

When you contract with an MSP, they’ll require you to use the hardware their practice has standardized on, and they’ll also highly recommend you use their software suite.

By having a pre-determined hardware and software profile, your engineer can resolve any issues more efficiently. In addition, since all customers use identical solutions, your engineer doesn’t have to spend extra time learning about the hardware or software before fixing the problem.

If there is a hardware or software solution you absolutely can’t part with, you can look for an MSP that offers flexibility.

The exception to this is end-of-life equipment.

Outdated hardware is prone to security and operational problems, so your MSP will require you to update it or have a plan to replace it.

 

Hours of Service

Most MSPs operate during regular business hours – 8 a.m. to 5 p.m., Monday through Friday.

If you experience any IT issues during this time, you can email or call IT support, and your request will be triaged and assigned to an engineer.

Unfortunately, technology has yet to understand that we prefer it fail during the typical workday. So if you have an IT emergency outside of your MSP’s hours, they’ll have an on-call engineer ready to take your call.

Your contract will help you understand better what you should do in this scenario and if there is any surcharge for nights, weekends, and holidays.

Reputable MSPs are transparent about this throughout your contract. If you request after-hours tech support, the on-call engineer will remind you of any additional charges and double-check if you want to proceed.

 

Cost of Managed IT Services

The most important question going into a managed services agreement is how much it will cost.

Your MSP should have given you an estimate before they present you with the final contract, but at this point, you’ll know the exact amount you’ll pay each month.

At The KR Group, we’ve moved to an all-encompassing fee structure. This means you have a set monthly rate, and barring any significant changes, that fee covers the appraisal, hardware, software, and support they provide.

This option usually starts at around $150 per user per month, with a minimum monthly commitment of $2,500.

Some MSPs break up their costs across multiple invoices or charge at different intervals. All of these details will be explained in your contract.

 

Length of a managed services contract

Another essential component of an MSP contract is how long it lasts.

managed services contract Managed service contracts typically come in 1-, 3-, or 5-year terms. (The KR Group only offers the option of a 3-year agreement.)

If you want to make the longest possible commitment and are comfortable talking to the MSP about potential risks, a 5-year contract may work for your business. However, if you have reservations about the service, a 1-year agreement can serve as an extended trial period to see if it’ll meet your needs.

Most organizations find 3 years to be the ideal term because it gives the MSP time to improve your organization and provide increased value.

 

Exit Clause

By signing the MSP’s contract, you agree to work with your MSP for the full duration of your agreement.

However, if you decide you want to end your term early, your contract will include a provision for early termination. Generally, this requires you to pay the agreement.

This commitment can be intimidating, especially if you’ve never used managed IT services.

To alleviate some of those concerns, MSPs, including The KR Group, offer an introductory phase. During this time, you get to see how managed services work with your IT environment, and if you are unsatisfied with the service, you can leave without any penalties.

However, once that initial phase is complete, you’ll be obligated to stay in the contract or pay out the remainder of it before leaving.

 

Changing the Original Agreement

Regardless of the length of your managed services, you’ll have to change users or devices at some point.

To add a user, you’ll need to inform your MSP in advance. You can let your MSP know when you start the interview process for the new users and then a couple of weeks before they start at your organization.

This gives the MSP engineer ample time to work with human resources, learn what devices and software the new user requires, and prepare them.

Setting up new devices for the new user is billed outside of your contract, but eventually, the new user is brought into your recurring charges. How soon this happens depends on your MSP’s policies and should be outlined in your contract.

 

Questions to Ask about Your Contract

When you first look at your contract, you’ll notice the thick stack of paper full of technical terms you might not completely understand.

Even if every word of the contract isn’t in language you use daily, you should know the answers to the following questions:

  • What hardware and software does the contract require?
  • What are the MSP’s business hours, and do they charge for after-hours support?
  • How much are you obligated to pay, and how often?
  • What is the length of the contract?
  • How do you terminate a contract early?
  • What’s the process for making changes to the original agreement?

Your contract should become your go-to document for information regarding any solution or service your MSP provides, and they’ll review it with you, so you have a clearer understanding of what it entails.

If you’re still nervous about signing up for a managed IT services contract, you can find the answers to all of your questions in our complete guide to signing up for managed services.

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