Recently, in preparation for a NinjaRMM MSP live chat on how to handle client requests and communication, I sat down with a lawyer I worked with during my years as an MSP owner. I was curious to know if the wording of the managed services contract I was using would have adequately protected my business in the current circumstances. We soon realized that this would not be the case. When we interviewed the attendees of the live chat event the following week, I saw that I wasn`t alone. Only 13% of respondents felt that their AMM covered them, given the current circumstances. In the IT channel, the abbreviation “MSA” almost always refers to a managed services contract. An MSA (also known as a managed services contract or management services contract) is an agreement between a managed service provider (MSP) and a customer. The contract defines the services that the MSP will provide, the minimum time for a response, the payment structure and the liability protection. You certainly don`t want a bunch of different deals circulating, so you`re never sure which customers are subject to which regulations. An annual review of your documentation is usually sufficient. Focus primarily on researching and modifying clauses that cause you problems or do not benefit your business relationships. The following bullet points are clauses that you may want to incorporate into your next revision. In the initial race to adapt, many MSPs and their customers have erred on the side of speed and flexibility, recognizing that these are indeed extraordinary times.
But the longer the crisis lasts, the more important it will be to ensure that any exceptions or “handshakes” are written down (obviously not literally) and reflected in your Managed Services Agreement (MSA) in the future. DocuSign eSignature can automate the process of creating managed services agreements with: If so, you probably intend to add or expand your managed service offerings and generate more recurring revenue soon or in the future. If so, your Managed Services Agreement (MSA) will be your most important transformation tool. Thank you very much for that. It looks like we`re going to get way too complicated in our deal, so it will help a lot. This is especially true if you`re scaling your business from a break/repair model to managed services. From the perspective of long-term business relationships, many expectations must be managed on both sides of the negotiating table. Contracts and agreements keep both sides of the relationship honest and set expectations for the future of the relationship. After realizing that my old MSA language was deficient under the current conditions, I worked with the lawyer to make several additions that I would like to share here. Feel free to use these sample clauses as a starting point, but be sure to consult with your lawyer before making any changes to your managed services contract. This is very different from a service framework contract, which serves as a framework for future agreements or transactions.
Think of it as a “model” for future agreements by providing common terms and conditions that extend to all transactions between the two entities. Make sure that you are not held responsible for any loss or damage beyond your control. The pandemic is a great example of how external forces beyond your control can quickly impact your business and customers. It is important that your managed services contract takes these potential changes into account and clearly defines the expectations of the business relationship in times of crisis, including what customers should expect. These terms also define how your MSP is protected. The following are examples of contract languages that can be used in a managed service contract. While writing these articles, I sat down with a lawyer to make sure they were the right language for the present and the future. These clauses or their variants should form part of any managed service contract. The contractual wording of these clauses aims to provide your customers with adequate coverage, taking into account situations beyond the control of your MSP, while ensuring the protection of all parties.
You should also consider your MSA as a potential sales tool. You`ll find that the cover page of our MSA template includes a checklist of services and products offered that you can use to amplify the value you offer a customer before asking them to sign on the dotted line. Before they even dig into the agreement, the client has a clear understanding of what they are receiving under the agreement. While PSM and clients seem to understand and accept the changes in the way services are delivered right now, I think we all realize that the longer it takes, the more likely it is that questions will arise as well as requirements that will need to be addressed. It is therefore imperative that we stay one step ahead of the situation and update our agreements. I hope this example of language helps you get off to a good start. Here is a link to a generic contract that you can use as a template to create your service offering. I keep the agreement simple because creating a confusing document that`s hard for your clients to understand won`t help you in the long run. lawrencesystems.com/MSP_Contract_Template_2019.pdf DocuSign eSignature speeds up the contracting process, eliminates manual tasks, and makes it easier to connect to the tools and systems you already use. With DocuSign eSignature, you can easily create managed services templates and send, sign, and manage your contracts.
DocuSign eSignature is always free for signers and intuitive and easy to use. If your contract has not met your offers or business requirements in terms of customer service offers, contract language and payment terms, now is the time to update it. The design language included in this article provides MSPs with additional protection and the ability to be proactive when a customer requests changes to the service or billing, while ensuring that their business is protected. A service level agreement (SLA) is a contract that in many ways sets the tone for the relationship between the provider and the customer. The SLA specifies a set of delivery services and parameters for which a party has agreed to do so. PSM must make it clear that they are an integral part of their customers` business and that they must be paid on time and in full, unless previously negotiated changes to the payment terms have been agreed. Here is an example of contract language related to a client`s lost wages that can be included in a managed service contract: A Statement of Work (SOW) is usually presented when it comes to project work. It describes the work requirements of a project, defines project-specific tasks, defines results and schedules as well as prices. A work scope or service description is often presented with an MSA if it is a fixed project-based job.
Non-payment: If payment has not been received by the first day of the month for that month of service, MSP reserves the right to suspend the provision of on-site and remote services until payment of the monthly fee, provided that MSP announces the late payment within five (5) business days. Let`s take a closer look at the specifics of MSAs, how they are written, and how they differ from other documents you can use in your MSP. Outsourcing IT capabilities through managed services can make economic sense to scale your resources, improve operations, and reduce costs. However, this also means preparing well-written managed service contracts with defined conditions such as the following: The customer agrees that weather conditions, traffic conditions or force majeure beyond the control of MSP may prolong or prevent the on-site response. Deferred billing of ___________ over __ month. Then, after ___ month, the deferred amount begins, which must be added again in the following months by ___% of the deferred amount or by mutual agreement. For example: if MSP resets $1000 per month. Then, once the ___ number of months has elapsed, 25% of the $1000 is added each month until they are fully paid. One plan changes per month. If the change is a monthly plan, billing will continue after the customer has resumed the services as mutually agreed between MSP and the customer. This can be an assessment between the parties of a gradual resumption of employee and network activity or an immediate resumption of employee and network activities.
If you`re looking for a more in-depth free guide, Connectwise has one you can get here www.connectwise.com/resources/ebook-it-service-excellence If you`ve found it helpful, join us on May 7 for the MSP Security Summit, a virtual event designed to connect MSPs to a multitude of practitioner tactics and peer-to-peer discussions. We have an entire session where we discuss how PSM can better protect themselves by adapting their policies, procedures and SAS. More details and registration for the event can be found here. For more information about these clauses, see the Sample addendum language for updating your MSA section of this E2E channel article. The COVID crisis is obviously affecting PSM and their customers in a variety of ways. In many cases, at least some of the work done has moved away from the “status quo.” As a result, expectations for certain levels of service or reasonable response times may have changed in the minds of either party. In addition, with the sudden influx of end users now working from home networks, there can also be confusion about what exactly is covered and what is not. A reusable template to streamline and create managed services contracts would be beneficial.