10 Reasons Contracts Are Not in Your Best Interest

10 Reasons Contracts Are Not in Your Best Interest

The pace of change in IT and tech today is rapid and can shift daily. It is difficult to know today what new tech may become invaluable tomorrow, and news of nefarious hacks have become more commonplace. When you outsource your IT services, you need to know that your managed service provider is agile and responds to the latest news and trends. As such, it doesn’t make sense to use the traditional contract model. Locking down choice is bad for clients, and is no way to build a profitable business relationship. Here are 10 reasons why signing a contract with a managed service provider isn’t in your best interest.

Inflexible

In business, it pays to stay agile and lean when you need to. Flexibility can mean survival, and a contract hinders flexibility. Maybe you’re in a market that has some volatility, and your IT needs change with some regularity. Being bound by a contract means you will pay more for services if you need to add them. By the same token, you may pay too much for services when you aren’t using them. Don’t let a rigid contract put you in a corner.

Incompatible

Having a contract usually means that you know what you want. Terms spell out what is expected of each party, and there are penalties for breaking those terms. This is made so much more difficult if you don’t know what you need. It is imperative that you trust your service provider to recommend the right IT package. The danger is that they may not be recommending something that is right for your business, but rather something that is right for them.

Delayed Service

With a contract, you might not be getting what you need when you need it. If your contract stipulates that your MSP will only perform a certain number of maintenance hours and something goes haywire, are you going to be able to count on your service provider to attend to your needs promptly? A nimble and responsive MSP can be at your side immediately to help out, and at a price that that won’t be over and above the cost of the contract you are already paying for in a fixed price model.

Needs not Addressed

Hiring a service provider on a fixed price contract can be like putting the cart before the horse—the developer may have little knowledge of what your needs are before the agreement begins, and will have to make a guess. If you aren’t convinced of your service provider’s expertise, you probably don’t want them guessing their way through your IT needs. Guessing means a higher likelihood of surprise costs and ballooning budgets for your business when the estimate is off.

Paying for What You Don’t Need

Service providers have budgets too. If they charge you too much, you are on the losing end. If they feel that they charged too little, they will try to make up their budget with add-ons and recommendations, often masked as “necessities.” Or, they may try to inflate their next invoice to cover the shortfall. Either way, you lose.

Contracts are Hard to Alter

Once a contract is in place, it can be very, very difficult to get out of. Let’s say you talk to a colleague, and you realize that your MSP is charging you far too much for a particular service. If that price is fixed in your contract, you are likely going to have to endure the cost until the contract runs out. With more agile pricing, you won’t have to worry about paying a steep fee for changing or breaking your contract. With an agile MSP, you pay for services you need when you need them, not when you don’t.

Stiff Penalties

Sometimes, a contract can be amended or even cancelled—but there is almost always going to be a penalty to the client. Contracts are in a service provider’s best interest because they often set the terms in a long, supposed “boiler-plate” contract. There are very few people that read all of the terms and conditions of any piece of software they install, and contracts can be the same way. The problem is, you can’t just delete a contract like you do a piece of software, unless you pay a cost that may cripple your business.

Treated As a Number

Signing your name to a contract is meant to replace what should take time to earn—trust. If your MSP insists on a contract, they are saying that your company is just like any other that they deal with. You become a file, rather than a partner, and consequently, your IT needs can suffer.

Deadlines Over Goals

Deadlines can be imperative in business, as long as they are goal-driven. Prioritizing deadlines over goals can be another detriment to having a contract. An MSP that is more concerned about getting things done quickly than in a way that benefits or strengthens your business is no MSP to work with.

Wasted Time

Some MSPs may claim that contracts save you time, but that is rarely the case. A contract shouldn’t be signed, filed, and forgotten about. If your IT needs change for any reason, you will need to renegotiate your contract, which can be extremely time-consuming. Once a contract is in place, the MSP may be resistant to change it, and it could take time away from your business to amend and fix it. Losing time to IT concerns isn’t the reason you use a managed service provide—again, having an agile MSP is a far quicker solution, with far less difficulty.

 

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