CYBER SECURITY | 4 MIN READ
Signing a Managed Services Provider contract is exciting, as it is the first step in better protecting your business from cyber threats. However, signing an MSP contract can mean reading over a lot of unfamiliar jargon. A term you might come across in a contract is an "on-boarding fee". What exactly is this fee, what does it entail, and what might it cost? Read more to find out.
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What Are On-Boarding Fees?
In the MSP industry, on-boarding fees, also known as setup fees, are the cost required to install software and hardware that sets up a client's network to have the ability to be supported by the MSP's IT team.
Before on-boarding even begins, the network must be thoroughly inspected for flaws that need to be remedied. Once these flaws are identified, a plan of attack for on-boarding can be laid out.
On-boarding a client can include a host of tasks, from installing hardware such as computers and firewalls to setting up the network to backup to the cloud to installing multiple cyber security software, among other tasks.
On-boarding can take anywhere from a few days to a few weeks or more. The time it takes to on-board can vary based on how complex the process is. If a client simply needs a few computers and a firewall installed, the process could take a few days.
For a new company or for one who has just moved offices and has to set up their entire network again, the process could take a few weeks or more.
How Much Are On-Boarding Fees?
On-boarding fees are built based on a few factors. Sometimes, the fees vary based on the complexity of the process, which can create a price range anywhere from $1,000-10,000. Usually, fees within this range fall between $1,000 and $4,500.
Smaller MSP's might charge by the hour simply for the labor required to set the network up. Other MSP's sometimes charge a flat on-boarding fee equal to the amount of one month's managed services, which could be anywhere from $1,000-3,000 or more.
Keep in mind, however, that if you are having hardware such as computers or firewalls installed, the cost of hardware is usually billed as a separate cost which is sometimes called an "investment".
Other MSP Contract Terms Explained
While it's important to understand on-boarding fees, there might be some other technical jargon that you are unfamiliar with as you read over an MSP contract. Continue reading to see some definitions of commonly confused MSP terminology.
Service Level Agreement (SLA)
SLA's are a written commitment that spells out the terms of service that an MSP guarantees. For instance, an MSP's SLA might say that they guarantee a certain response time, a specific level of service, or a certain level of service feedback.
While SLA's aren't a standard addition to an MSP contract, you can ask to add one if you don't see one already included.
Backup Continuity and Disaster Recovery (BCDR)
BCDR is a comprehensive plan that ensures that your data is consistently and securely backed up, and that there is a disaster recovery procedure in case your network goes down.
When reading over the BCDR part of your contract, look for guarantees that your data is secured. Data should be stored in SOC-2 compliant data centers, should be encrypted in transit to and from data centers, and should be encrypted when at rest in the cloud or in a data center.
Check with your MSP to see if their backup technology is "ransomware-aware", which means that there is software in place to identify and remove ransomware files from a backup.
Mobile Device Management (MDM)
An important term that you should look for in an MSP contract is Mobile Device Management (MDM). MDM manages the security of any mobile work phones on your network.
Employees who have work phones most likely have sensitive data on them, especially if they log into their work email or work platforms on their phone. MDM's ensure that sensitive company data on these phones is secured and encrypted through an app that's installed and reports back to your network's server.
When reading over an MSP's contract, make sure there's some form of an out clause, or termination clause, that lets you out of your contract if the MSP doesn't deliver on what they promised.
Usually, out clauses will have a stipulation that gives the MSP around 30-60 days to remedy any major issues a client is having before a client can be released from a contract.
RELATED: Questions to Ask an IT Provider
Don't let on-boarding fees and confusing technical jargon scare you off from signing an MSP contract. As an MSP, we strive to answer all customer questions so that nobody is left in the dark.
Doing thorough research on legal and technical jargon beforehand ensures that you fully understand the contract, which will alleviate anxiety and confusion when signing. What matters is that you're taking the first step to improving your cyber security!
Posted by Kevin Kendall
Kevin Kendall is the VP of Services for Standard Office Systems and has built a career of assisting businesses with their office technology needs. He has decades of experience with products and services like copiers, business phone systems, and managed IT services. Mr. Kendall is driven to see others succeed and help them develop to achieve results beyond ordinary expectations.