Managed Services Engagement Model

Simply put, a managed services engagement model acts as a plan to outline the collaboration and service agreement between the managed service provider (MSP) and their client. An engagement model focuses on the interests and needs of the client in question. While you focus on your core business, your MSP keeps your business up and running via various managed service delivery models. The purpose of the engagement model is to manage flexibility and provide the level of managed service needs to each customer. A managed services engagement model also outlines the various pricing structures. 

• Application Support Model(ASM): Application support refers to a technical service to help with application system issues. The support model might involve L1 support (basic help desk) or L2 (In-depth tech help). An Application Support model might also involve staff augmentation.
• Managed Service Model: Managed Service models involve the highest level of responsibility. For example, the MSP takes full responsibility for every aspect of your IT infrastructure. With the MSP taking on so much responsibility, few resources are needed from the client organization.  This model usually offers the highest tiers of expert IT support (L3 and L4).
• Flexible Model: Many managed service providers offer flexible support that’s suitable for small businesses. For example, a flexible package might involve choosing one small aspect of IT support (at a reduced price).  While the MSP works with the client via an assigned contact, there are no dedicated resources to resolve issues.  Plus, this pricing model may provide a precise number of support hours per month or year.

How can you future-proof Your Business via Managed Services?

 Your company’s strategic vision is all about determining where you want your business to be in the future. Naturally, businesses want to thrive and succeed. To do so, you may future proof your It via managed services; so how exactly can you do this?

1. Follow tech and market trends

Managed IT services providers must relentlessly keep up to date with the latest technology and market trends. MSPs think about the software that they are using now and in the future. MSP offerings support high-level project management; have configurable rate models and prepayment, and offer outsourcing models for larger companies. MSPs are also equipped to manage multiple time zones. A managed service provider will have close links to the latest RMM platforms.  (I’m re-writing to make this  for the client and not the MSP.) 

2. Determine the most valuable services

To remain future-proof, MSPs must focus on the services which offer the most value to their clients. Cybersecurity services are imperative to modern businesses. Big Data is also very important to contemporary organizations. Over the next few years, businesses will continue to use analytics to their advantage. MSPs will thrive if they can support their clients to collect and use this data. Information technology and cloud computing develop, it’s virtually essential for MSPs to operate on or support the cloud.  These are all advantages for clients looking to work with an MSP. 

3. Quality improvement methodologies

MSPs focus on quality and improvement methodologies. Quality improvement is a formal and systematic approach to analyzing your work and improving your performance. Common Quality Improvement goals might include creating a culture that values quality, analyzing data, and communicating your outcomes. When you focus on quality improvement methodologies, you’ll find that your MSP also achieves improved risk management.

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How do you choose the right managed services engagement model for your business?

The right managed services engagement model depends on your business size, IT complexity, budget, support needs, and how much you want the MSP to handle. Small businesses with limited internal IT resources may benefit from a flexible or shared-support model. Meanwhile, larger organizations with complex infrastructure may need a fully managed model with dedicated expertise and proactive monitoring. Businesses should also consider whether they need occasional assistance, support for specific applications, or comprehensive IT infrastructure management.

Budget and support requirements matter as much as the model itself. A predictable fixed-cost or managed service model may suit businesses that want consistent monthly expenses, while a flexible or managed-capacity model may work better when support needs vary. Before choosing, define the required service scope, SLAs, response times, escalation procedures, security requirements, and MSP responsibilities. The right model should provide enough flexibility to scale services as business needs change without paying for unnecessary resources.

What is the difference between a managed services engagement model and a managed services delivery model?

Aspect	Managed Services Engagement Model	Managed Services Delivery Model
Purpose	Defines the relationship, responsibilities, scope, and pricing between the business and MSP.	Defines how the MSP delivers, monitors, and supports the agreed services.
Infrastructure & Cloud	Determines how much responsibility the MSP takes for multi-site infrastructure and cloud environments.	Defines how the MSP monitors, maintains, and optimizes infrastructure and cloud systems.
24×7 Operations	Establishes whether the MSP provides continuous support and the applicable SLA commitments.	Defines the processes and resources used for 24×7 monitoring, incident response, and support.
Security & Compliance	Specifies the MSP’s responsibility for security and compliance requirements.	Defines how the MSP performs security monitoring, compliance activities, logging, and reporting.
Escalation & Resources	Determines escalation responsibilities and whether the MSP needs dedicated or shared resources.	Defines the actual escalation workflow and how technical teams handle incidents.
Enterprise Use	An enterprise may choose a fully managed model for multi-site infrastructure, security, cloud, and 24×7 operations.	The MSP may deliver it using NOC monitoring, dedicated engineers, escalation teams, and specialized support resources.

Which managed services engagement model is best for enterprises with complex IT environments?

For enterprises with complex IT environments, a fully managed services engagement model is often the best fit because it provides broader MSP responsibility, dedicated expertise, and continuous support. It suits organizations managing multi-site infrastructure, hybrid or multi-cloud environments, 24×7 operations, and security and compliance requirements.

Key considerations include:

• Multi-site infrastructure: Centralized monitoring and management across offices, branches, and data centers.
• 24×7 operations: Continuous NOC monitoring, incident detection, and rapid response.
• Security & compliance: Ongoing security monitoring and support for regulatory and compliance requirements.
• Cloud management: Management of hybrid, private, or public cloud environments.
• Escalation: Defined L1–L3 escalation procedures with clear SLAs and accountability.
• Dedicated resources: Dedicated engineers or specialized teams for critical infrastructure and complex IT requirements.

What responsibilities does the MSP have under each engagement model?

Hybrid Support Model: The MSP handles agreed IT support, monitoring, application assistance, and escalated issues, while the client manages internal IT tasks and provides access and business requirements.

Application Support Model: The MSP provides application troubleshooting, L1/L2 support, maintenance, and technical assistance. The client remains responsible for business processes, application requirements, and internal decisions.

Managed Service Model: The MSP takes broader responsibility for infrastructure monitoring, maintenance, security, and technical support. The client provides business direction, approvals, and required system access.

Flexible Model: The MSP supports selected services, hours, or specific IT needs. The client remains responsible for tasks outside the agreed scope and manages its internal IT responsibilities.

Managed Capacity Model: The MSP provides a predefined pool of technical resources or support hours. The client prioritizes requirements, coordinates the work, and ensures usage stays within the agreed capacity.

How can businesses reduce risks when selecting an MSP engagement model?

Businesses can reduce scope creep and unclear responsibilities by defining the services, exclusions, deliverables, and change-request process before signing an agreement. Clear SLAs should also specify response times, resolution targets, uptime commitments, and escalation procedures.

To avoid pricing uncertainty and resource gaps, businesses should confirm the pricing structure, additional charges, included services, and resource availability upfront. The agreement should also identify whether the MSP provides shared or dedicated technical resources.

Businesses should also establish clear security responsibilities covering access controls, monitoring, incident response, and compliance requirements. To reduce vendor dependency, maintain proper documentation, define exit terms, and include knowledge-transfer requirements so the business can transition services if needed.

What are the Benefits of a Managed Services Engagement Model?

There’s no one fits all solution when it comes to managed services. With this in mind, offering different engagement models lets your MSP serve a wide range of companies and needs. Managed IT services can offer different support tiers. Separating support into levels lets you quickly fix small issues, set timelines for bigger problems, and strategically address client needs. Different engagement models give clients the flexibility they need to meet their goals.

What are the challenges of a Managed Services Engagement Model?

The biggest challenge of a managed service engagement model is project management. It’s about balancing quality with cost, time, and scope. MSPs offer a wide range of services to many different clients, all using different engagement models. To deliver a high-quality service, it’s easy to see why strategic project management is so important.

Pricing can be challenging when running many varied aspects of one service. Due to this, many MSPs adopt different pricing models. Pricing models are available according to fixed-price projects, managed capacity, and projects judged on material and time.

Managed capacity means that the customer purchases a pre-set amount of ‘person-hours’ from an MSP at a predetermined rate. A managed capacity model provides a mix of project approaches and traditional staffing.  (Should this also be above in the different pricing models section??) 

Managed Capacity Model

The managed capacity model is a form of service management that relies on automation, self-service tools, and human intervention. The goal of this approach is to reduce costs while maintaining quality levels.

Managed capacity models are based on the premise that the best way to manage demand is to anticipate it. Companies can better plan staffing requirements, allocate resources efficiently, and avoid costly disruptions by anticipating demand.

Managed Services from ExterNetworks

With ExterNetworks, your business will enjoy the deployment of new services and the latest technologies to meet your business demands with the right amount of support that you require.  With ExterNetworks, you’ll also get a handle on controlling your IT costs.  Our team will form a custom relationship with you to help you better manage your business.

Want to explore how we can form a unique relationship?  We’ll help you better manage your business.  Let’s schedule a 15-minute call to see how we can help your business.

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