Running a business is complicated, considering the liabilities or misunderstandings that may arise when partnering with vendors or service providers. Therefore, your long-term business goals need suitable contracts and agreements to maintain friendly business relationships with your clients.
Agreements and contracts are equipped to maintain a relationship of trust and transparency between the client and the managed service provider. Like them or not, all this paperwork is designed to help you smoothly sail through any tough times your business might face. In an unprecedented situation, your managed and MSP master service agreement will be the most important tool at your disposal for making honest and safe transactions.
So, let us understand a few important aspects of managed service agreements and MSP master service agreements, and find out how MSPs can structure an effective MSA.
In the IT and tech world, an MSP contract is also known as Managed Service Agreement (MSA). It is an agreement between the service provider and the client regarding the services the MSP will provide to its client. When the contract is drafted, certain factors need to be kept in mind like the response time, liability protection, the basic payment structure, and more. There must be a clear definition of the services that you are willing to provide the client.
Drafting an MSA can help you create a proper framework to facilitate a profitable business through your MSP’s services.
Master service agreements is an agreement or a contract between an MSP and their client that outlines a flexible time frame and framework for completing an assignment. It also includes the decisions that need to be taken along the way for entering subsequent agreements in the future.
An MSA establishes the foundation of the relationship for the work that needs to be carried for the benefit of their client. It is efficient in ensuring that the work is progressing as planned. It is equipped to solve any subsequent problems or issues that may arise in the future, during the course of a project.
Master service agreements also discuss the basics of negotiating and crafting the MSP contract. It gives a clear outline of the best possible practices that MSP will put to use to achieve the desired goal. The agreement also takes into consideration the most common problems that may arise during the course of the project and sets guidelines on how they should be resolved.
A well-drafted Master Service Agreement can help prevent a litigation scenario, hence saving precious time, money and energy for an MSP.
The SLA or the Service Level Contract is crafted in a way that sets the relationship’s tone between the service provider and its client. The SLA is inclusive of a well-defined set of deliverables and their delivery guidelines that the vendor has agreed upon.
An SLA or Service Level Contracts is different for different MSPs. However, a traditional MSP Service Level Contract must include features like compliance to regulations, basic response time in the face of unforeseen circumstances, and so on.
Managed service agreements or MSP contracts usually contain service level contracts in their clauses. MSP’s often use the term Service Level Contract or SLAs to refer to the blueprint of the actual MSA that is to be presented to their client.
Drafting an MSA can be tricky. Many technicians and IT MSPs are still now aware of how to draft and design a proper MSA.
Let us understand this with an example of managed service agreements.
An ideal MSA contract template should consist of:
This MSA service template is considerate of the most crucial aspects on which you will build your relationship with the client. Any good MSP contract should include factors like payment date for your work, work policies and their subsequent renewals and what happens when there is an end of the business relationship between you and your client.
Your MSA can also be used as a sales tool. A good MSA should have a well-defined checklist of products and services that you are willing to provide your customer. Before even reading the full contract the customer will have a proper understanding of what they are signing up for with the agreement.
An MSA or MSP contract should be designed well to protect your business from any form of exploitation. MSAs are meant to set the right expectations of your business by the client.
The above example of a managed service agreement template should help you draw a comparison between your present MSA contract and an ideal MSA contract.
A master service agreement is designed to provide clear parameters in performing the future work established in the contract. It is very crucial to draft a master service agreement by keeping in mind some important functional areas.
The two most important kinds of termination are termination of cause and termination of convenience.
Other than the areas mentioned above, an MSA can define few other areas that should be focused on. This may include areas like business ethics, property and network access, corporate social responsibilities, purchase orders, risk allocation, statements of work purchasing agreements, limitations of liability and much more. This way both the MSP and clients can save valuable resources in negotiations.
MSAs are effective contracts that require the agreement and understanding of both the parties involved. A good MSA can comprehend future disputes and provide necessary assistance to resolve them. This saves the vendor and the client a lot of money and time.
A good MSP should be clear about their offerings and outline their services in a well-written agreement. An MSP contract makes it easier to draft a solution path and describe the working areas of your business relationship with the client. The contract is also designed to set realistic expectations for the client. They also document any kind of legal formality that shall require attention in due course.
The simple answer to this question is, when you have fallen out of the pre-set expectations previously mentioned in your MSA, you must revise your contract. This may include factors like your service offerings to the customer, failure of payment terms, or the very language of the contract. The language that is used in drafting the contract provides security and protection to your managed services. Therefore keeping your overall business protected.
Nobody wants a bunch of differential agreements floating all over in ways that you are not sure about factors like which client is under which terms and conditions. An annual review of your MSA can prevent any such misunderstandings between you and your client. You should emphasize changing any terms that negatively impact the business relationship with your client
The deliverables or the scope of work may vary from one MSP to the other. However, there are certain core deliverables that every managed IT service must provide.
Managed services related to security can help protect your client from cyberattacks. You can choose to build an in-house or partner with an agency to provide cloud and security services to your customer. Many MSPs have developed cloud services built around Microsoft Azure, AWS and Google Cloud. These services help facilitate quicker migration, cost optimization and application modernization.
MSPs also offer disaster and backup recovery services to their customers. This, alongside cloud and security infrastructure offerings, is usually included in a much bigger portfolio of services and products. All of this can also be included within the RMM professional software automation services of the MSP.
When drafting an agreement with your client, one should keep in mind that the master service agreement is different from an MSP contract/managed service agreement.
A master service agreement is designed to serve the future transaction and agreements between the MSP and their client. It is crafted to set expectations regarding future business opportunities by agreeing to comply with regulatory norms that will remain constant for all business dealings between the two parties.
A managed service agreement, on the other hand, is an agreement between an MSP and their client that establishes the time frame and work system for completing an assignment.
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