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MSPs fill in IT gaps but are no one-size-fits-all solution.

You might say that Premier Inc. in Charlotte, N.C., is through with outsourcing. Three years ago, it let its contract with its provider of five years run out and insourced nearly all aspects of IT. But there's one function the health care consultancy couldn't justify bringing back in-house: the help desk, says Greg Archer, vice president of corporate IT services.

Unlike other areas of IT, the help desk wasn't supporting a rapidly changing business model. Considering the time and cost involved in developing the help desk infrastructure itself, plus training and managing personnel, outsourcing looked favorable, he says.

But Archer didn't turn to a traditional outsourcer; he hired Everdream Corp., a Fremont, Calif.-based managed service provider (MSP) that provides Web-hosted desktop management services. Now, when Premier users call the help desk, each call is answered by an Everdream technician who -- thanks to agent technology deployed on the users' PCs -- can troubleshoot and fix the issue remotely. If the problem is too complex, it can be escalated to Premier's on-site staff. The agent technology also alerts Everdream to which PCs need the latest patches so the MSP can automatically update them over the Internet.

"The demands our business is putting on us are causing us to change rapidly, with the exception of the help desk, which is more standardized and isn't going to change significantly," Archer says. "And at the same time, we knew we could improve our service levels" via an MSP.

As more businesses like Premier turn to MSPs, they are taking a hard look at their IT operations before slicing off a piece that's MSP-friendly. The final decision depends on how companies view their IT operations -- what's core, what's rote, what they don't have the resources for and what they wouldn't trust anyone but themselves to do. And those determinations must be weighed against the many benefits an MSP can offer, such as reduced costs and automated operations, as well as possible pitfalls of this model, such as security issues or the inflexibility of a one-size-fits-all application.

In Premier's case, going with an MSP -- combined with insourcing its other IT operations -- has resulted in increased uptime on all of the company's core systems, improved customer satisfaction and at least $2 million in savings, Archer says.

But for another company, handing over desktop management to an MSP might be a big mistake, says Jeff Kaplan, managing director of Thinkstrategies Inc. in Wellesley, Mass. "Some organizations have a culture that permits a certain amount of customization in the desktop arena, which may not be acceptable from an MSP perspective, since they might need to standardize the platforms to effectively manage them," he says.

Not to mention the fact that if you've enlisted the MSP to manage a full range of desktop management services and a service fails in some way, it could be very disruptive to other parts of your environment if the MSP doesn't take corrective measures quickly, Kaplan says.

For that reason, it's becoming clear that the most important aspect of an MSP relationship is trust -- possibly even more so than service-level agreements or a detailed contract. "You've got to have a good partnership," Archer says. "When you have to depend on a contract, you're in trouble."

To Each His Own

The trust factor rings true for Interim HealthCare Inc., a health care staffing provider in Sunrise, Fla. The company's major reason for using an MSP was because it lacked a database administrator for its Lawson Software ERP system, which runs on an Oracle database. That was the situation in 2001, when Satish Movva, now CIO, joined Interim.

When Movva looked into hiring a database administrator, he found most candidates' salary requirements to be staggering. Plus, Movva realized, he didn't even need a full-time administrator. He considered hiring a consulting company that he could use on an on-call basis, but he knew he wouldn't always be working with the same database administrator on each trouble call, and it still put him in reactive mode rather than having someone consistently monitoring the database. "The reliability just wasn't there," Movva says. "I wanted a dedicated DBA company."

Movva hired dbaDirect Inc., a data infrastructure management services company in Florence, Ky. Tunneling through Interim's virtual private network, dbaDirect now monitors the Oracle database around the clock using BMC Software Inc.'s Patrol and other tools. Since signing on with dbaDirect, Interim has upgraded the Lawson application three times, with dbaDirect handling the database side.

Most important to Movva is that the MSP knows his system intimately, even though there have been some personnel changes. "That's a huge deal for us," he says. "When your system needs help, you don't want to explain to the guy on the other end how you're set up. You want the consistent face on the other end who knows the network as intimately as your staff, even though he's not full time."

Kaplan agrees that MSPs should offer more than just a remote service; they need a professional services staff that's able to get a firm handle on clients' operations. "It's been an impediment for MSPs that didn't build their business models to include this front-end person," he says.

But as happy as Movva is with dbaDirect and despite the fact that he also uses an offshore MSP for some application maintenance, there are some areas for which he would never use this model.

One of them is the firewall. Interim previously used MCI Inc. as a firewall services provider, but Movva terminated that relationship when he joined the firm. And while many companies use an MSP for network operations, "because we're a health care company, our patient information here is sacrosanct," Movva says. "I don't want to open that up to a third party."

Indeed, with federal regulations such as the Sarbanes-Oxley Act and the Health Insurance Portability and Accountability Act, companies need to be mindful of balancing compliance concerns with MSP activities.

"With a third party tunneling in through the firewall port and penetrating the trusted network, it probably drives the compliance guys crazy," says Ted Chamberlain, an analyst at Gartner Inc. "How can you be fully certified if you've got other parties manipulating your data?"

Similar to Interim, LaBarge Inc., an electronics manufacturing services provider in St. Louis, couldn't justify hiring a full-time staff member to monitor its data center for equipment failures, power outages or temperature fluctuations. Still, it wanted to know of problems right away, especially if they happened outside of business hours.

LaBarge hired Certified Nets Inc., an MSP in Chesterfield, Mo., that uses SilverBack Technologies Inc.'s SilverStreak Management Tunnel, which performs remote monitoring of IP devices over the Internet.

Tweaking the system to LaBarge's needs took a few months, says George Hayward, director of information systems, during which time the MSP set up who needed to be alerted to what. During a two-day power outage caused by storms, the MSP alerted LaBarge's IT staff that the air conditioning in the data center hadn't been powered up by the generator, enabling the company to address the issue before systems failed.

Hayward is considering using an MSP for his storage systems as well. "It used to be a question of whether we could get our data off-site fast and cheap enough, but with bandwidth being as cheap and plentiful as it is now, that's not a gating issue," Hayward says. He will likely go with a hybrid model, but privacy is a major consideration.

"I'm not sure all our customers would be comfortable with that," he says.

But Hayward's main concern is staying on the radar of the MSP itself. "When you bring someone on full time, your company is all they're thinking about. But if we had a natural disaster in town, [the MSP] has other customers to deal with," he notes. It's important to weigh how many customers the MSP has and where you fall on that list, Hayward adds.

Avoiding the Cookie Cutter

Equally important is finding an MSP that's willing to customize its service to your needs, particularly as your needs change. That means avoiding those whose business models rely on offering a cookie-cutter solution. "If you start doing something slightly different from what they're offering up, their one-size-fits-all approach might not fit you," Archer says.

For instance, Archer knows he'd like to develop a problem-tracking and change management workflow system for Premier's internal use and then integrate that with Everdream's problem-tracking system.

The type of integration Archer is seeking is still rare, according to Gartner's Chamberlain, but it may become less so. "Right now, the majority of MSP-like services are basic monitoring/management services," he says. "But [increased integration] is a natural progression, and there will need to be standardization around things like Web services to make it easier to trade application components."

Whatever the case, Archer is confident that he has chosen a partner that will be open to making the system work. "I believe there can be many pitfalls if you have a company that's not willing to work with you when you have significant changes to your business," he says.

Brandel is a Computerworld contributing writer. Contact her at marybrandel@verizon.net.

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