The Price You Pay For Poor Service Quality

You’ve probably heard the saying many times – you get what you pay for; whether it’s a new car, a pair of shoes, even your groceries, cheaper is not always better. And it’s definitely true for IT service quality. Let me share a story with you…

A friend purchased a 100-year-old house months ago and started planning lots of home projects to fix it up to their liking. As you’d expect the story to go, they created a budget and looked at costs when choosing painters, contractors, and all the other repairmen that an older home demands.

When they first looked for painters, they narrowed the choice down to two options:

  • First was a legitimate business with an established track record and obvious presence in the community—with a matching price tag.
  • Second was Joe Shmoe Painters, who promised to do a great job on a dime’s price but couldn’t provide local references.

    Service Quality: Painting and I.T. are similar (you don't want to go cheap)
    It’s just paint. What could go wrong?

My friend should have known better, but thought, Painting isn’t brain surgery. Let’s protect the budget and give the cheap guys a chance.

The first day, the painters came in and left paint on the antique tiles in their bathroom. The tiles were one of my friend’s favorite features. The original, wonderful tiles that were a big factor in deciding to purchase this house.

Not a great start.

After expressing concern to the painters’ boss, they received criticism—and then a poor work ethic—from the guys doing the actual work. Not only did painting the house take two weeks instead of the promised one-week turnaround, but they were left with unexplained patches on the walls, and the dripped paint they had complained about was still on the floors. Then Joe Shmoe Painters slapped them with a bill totaling the same pricing as the better company.

REALLY?!? How could they have been so thoroughly duped?

It’s that same story: once a philosopher, twice a fool. Why do so many people believe that good service quality comes cheap? Many times people ended up paying full price, but receive poor service and substandard results! Had my friend selected the first option, they would have had an expert team of painters, the home nice and cleaned up, and the job completed within a week.

You truly get what you pay for.

It’s not a bargain if it doesn’t work

This same story can be applied to any contracted service, including IT services. If your organization relies on technology, like most companies do these days, did you settle for the cheapest option? Does that make sense considering today’s ever-evolving technology and increasing cybersecurity threats daily? If you’re in an industry with any regulatory or audit concerns, if you maintain any data, or if technology helps keep your business moving forward, the answer is simple: No.

Sure, there are low cost managed IT service providers (MSPs). They provide you with a low operational maturity level (OML) (link to updated OML blog) at a low monthly rate. The problem is, your goal is to have high operational maturity. Why? Because companies with higher operational maturity consistently deliver EBITDA percentage about three times higher than those with a median OML. And beyond that, a higher operational maturity means purposeful planning for your IT, which helps you adapt your business as the world changes.

Low-cost IT providers never really fix the problem, and they’re rarely qualified to provide you the support you need. If they’re just patching a problem, the core issue is never truly resolved, and you wind up dealing with it repeatedly. And if they aren’t giving you the support you need, you’re going to be spending more in the long run.

In addition, you will likely lose business to your competitors, as your technology is not evolving with your business. If you’re constantly dealing with the same problems from your IT service provider, how can you ever grow?

The revolving cycle of low-cost IT services

Some IT providers require you to pay for hours worked as opposed to a fixed monthly fee. Why? Because the more repetitive, reactive problems you experience, the more they are dispatched to help you resulting in more dollars paid by you.  By the end of the year, not only have you paid more in time, but you’ve also paid the same if not more in dollars for the low-cost IT provider than the quality IT provider with decades of experience.

Service Quality: Tools of the I.T. trade
Sometimes the least expensive tool becomes the most expensive mistake.

Low-cost MSPs don’t know what the true costs are, they just know a cheap workaround. They sound good when presenting numbers to earn your business, but after a few months, the workaround stops working, and they’ve had to come in several more times to re-fix the issue that you keep complaining about.

That’s about the time the “cheap” MSP realizes they’re losing money on you. They start to bill your company for work that falls outside your contract scope, or force you to upgrade unnecessarily to new equipment that masks the issues you’re experiencing. Then you, as a company, end up paying more than the contract you were quoted. Add up the numbers for “additional services,” and you find that you’re spending the same as that high-operational maturity MSP had quoted you. But it’s not a wash, because now you’re paying the same while receiving less service and lower quality.

There is always a price associated with service quality

If you’re the best-in-breed in your industry, you know the value of your time and your services. You know that a competitor offering similar products or services at half your price can’t match your high level of service quality.

When you look for a B2B provider, then, why would you hire a bargain-basement option whose low-price tag clearly demonstrates what they’re worth? Why not hire another best-in-breed company to support your technology needs?

The thing that makes good quality MSPs unique to the service industry is that our financial goals are aligned with our customers’. Unlike some service industries, we don’t make money on your failures, illnesses, or debt interest. As a technology services provider and partner, we make the most money when you’re up and running—which is when you’re making the most money, too. Your success is our success.

You work most efficiently when you have no technology difficulties or breaches causing downtime or threats to your organization’s well-being. We want that too. It is in both of our interests to keep you up and running with top tier services, both reactive and proactive. Lower-tier MSPs don’t see long-term value in proactive services. They just send someone out to fix the problem as it occurs. They don’t realize that support model ends up costing more, both for the MSP that is constantly working to put out fires, and for the clients whose productivity is diminished.

A good MSP assesses your entire IT infrastructure. They survey your company, just like a professional contractor would do for your home. They take a look at the chipped paint, the caulk missing around your shower, and the cracked support walls that may indicate inadequate structural support. They show you all the areas of concern and then provide you with a roadmap aligned with your business goals. You can literally see where you should go, and what you need to be doing. Lower-tier MSPs don’t have the bandwidth or expertise to provide this level of service quality.

Do your due diligence before making a buying choice

Now, I get it. Most business leaders don’t know how to measure the intangible world of IT beyond their equipment expenditures, they don’t always understand the soft costs and opportunity costs associated with poor technology performance.

That’s why it’s important to do your research. NetGain has many resources available on our website to understand MSP best practices, such as for service level agreements, or reporting, for those who are not IT professionals. Or, you can speak to one of our team members, to understand more.

IT management is a vast topic that can seem daunting. Managed Services partners that have the depth and expertise to give you excellent support and planning are the ones worth spending your business’ hard-earned money on.

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Editor’s Note: This post was originally published in 2017 and has since been updated for accuracy and relevance. 

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