One type of insurance every business should avoid

In 2001 Australian insurance company HIH folded leaving thousands of customers stranded and wondering what had happened to millions of dollars paid into insurance funds over the years. Families were left without insurance and although customers survived and moved on and took up new insurance, it shattered the perception that insurance companies were solid foundations that people could trust.

Perhaps this is why when I hear some managed IT service providers refer to their IT agreements as IT insurance, I cringe a little.. After all, insurance is a product designed to help you (the customer) after a disaster – insurance is the insurer betting against forces of nature and the likelihood you’ll encounter a crime against you or your property at some stage. Insurers for the most part, doesn’t offer any prevention strategies. Perhaps it will change in the future but it’s unlikely you’ll purchase a new car only to have your insurer call you up, offer you a free alarm system and satellite tracking alongside a list of high risk parking areas to help you prevent a theft. No, Insurance companies are reactors, responding to the odds and protecting themselves from risk. Sure, they get paid for you to have fewer claims, but as claims increase, they simply raise premiums and continually reduce their own risk.

I prefer the term assurance. I don’t believe that just being there when things go wrong will create enough comfort for businesses or represent enough value to a company.

IT providers with the right people and technology are in a unique position to provide assurance, a guarantee that some things just won’t happen, and that others (perhaps forces of nature or criminal acts) are protected against or even mitigated by the use of backup and disaster recovery.

Before I share my 5 strategies for IT assurance, I’d like to preface them by saying these are strategies ‘in a nutshell’ – without a consultant or a provider that is accountable, these 5 strategies probably won’t work and that could very much put your provider back in the insurance category.

1. Monitoring critical services

It might surprise many businesses to know that much of what happens every day on a computer system is actually kept in a log file “somewhere” and the challenge for some IT providers is knowing what to watch out for, where to find it and what to do when things go wrong.

The solution to this is in choosing a provider that uses RMM (remote management monitoring) technology that looks for the heartbeat of specific applications say for example, your company’s email systems or database – and reports back with either an ‘i’m ok’ or ‘i’m having a problem’. Ok so that’s the techie side of things – but what happens when things aren’t ok?

How your provider then responds determines the difference between an IT insurer or one that provides IT assurance. Recently in Last Known Issue I wrote about how there are scripts today to not only highlight a problem for a provider, but even resolve it and report back when things are back to normal.

IT assurers prevent major outages by monitoring critical IT services.

2. Reduction Reporting and Planning

I remember when my car was broken into a few years ago I had some computer equipment for a client in the boot, everything was stolen leaving me with an insurance claim to handle. I swore then and there I would never leave a piece of equipment in the car again – it just wasn’t worth the pain and hassle. However within less than a year I’d forgotten all about that pain and headed off to a football match leaving my brand new laptop in the boot only to return yet again to a broken into vehicle and another insurance claim to deal with.

When your organisation has an IT problem your ‘claims department’ or IT support company deals with the issue, but without accountability and with busy, intense workloads on both sides of the coin it often means the issue is forgotten while new issues take the spotlight.

IT assurers manage this by documenting issues and following a Continual Service Improvement model or CSI – I like the acronym because it reminds me of the show Crime Scene Investigation.

Like life, some problems are inevitable but if the IT Provider conducts an ongoing review of issues, not just the big obvious ones. This ensures the customer is continuously getting value for money and that stones aren’t left unturned. It’s important not to allow our natural instincts to set in and put things behind us.

3. Change Management

“Its the software!”
“No, its the hardware!”
“it’s not my problem..”

Have you ever been caught in the middle of a he said/she said IT battle? This is the kind of conversation heard often when there is a problem with the IT system and more than one party is involved. The engineers think it’s the software causing the problem and the software developers say it’s the IT hardware or infrastructure and the poor customer just wants the problem solved.

The problem with IT systems is that often there are many elements at play, and slight changes from a person or a program can be made in a millisecond. When multiple parties have access to the same system it can be almost impossible to figure out what went wrong.

Proactive IT assurers accept that changes can and often do cause problems, and eliminate he said/she said by managing access to 3rd parties and maintaining a change management log.

In the event that something does go wrong, it empowers the provider to roll back before the change occurred and make a new plan of attack, and just as importantly, empowers the customer or system owner with visibility into why something went wrong.

4. Pain Management

IT assurers accept that IT problems do occur and so do most businesses, but they follow industry leading techniques to resolve the problem. As mentioned, CSI is a function of looking at past issues and resolving them but what about when the problem is happening?

Assurers recognise problems they’ve seen before and have written processes for resolving them. Not only does this ensure the problem is solved as quickly ad possible, but it also restricts ‘creative IT people’ from following different processes every time a problem arises.

5. Fix the obvious

Issues such as backups, spam filtering and virus protection should very much be dealt with upfront. The technology has been around long enough for IT assurers to adopt appropriate products and strategies and provide these to their customers.

Companies who adopt an IT insurance approach run the risk not only of IT problems but also a competitive advantage to those who demand assurance from their IT support company.

Having an IT assurer not only ensures IT systems run at their best, but it effectively reduces IT costs by tackling problems at the root. Idyllically we can have our cake and eat it too – low cost IT support coupled with proactive accountability but unlike insurance, a true managed services agreement will increase in value as time goes on.