In a significant proportion of UK SMEs, the primary point of contact for the managed service provider is the Managing Director.
Not because the MD has particular IT expertise. Not because IT is their core responsibility. But because nobody else in the business has the seniority to hold the supplier accountable, and the supplier knows it.
This dynamic has real commercial consequences, for the quality of the service received, for the MD’s available time, and for the business’s ability to make good technology decisions.
How it develops
The pattern is consistent. The business engages an MSP. The MSP relationship is managed informally, issues raised on an ad hoc basis, no structured service reviews, no performance metrics tracked. When something goes wrong that cannot be resolved at staff level, it escalates to the MD.
Over time the MD becomes the de facto IT manager. They are the person the MSP calls when something needs a decision. They are the person who signs off on proposals for new technology. They are the person who handles renewals and, occasionally, complaints.
The supplier is often comfortable with this arrangement. An MD without technical IT knowledge, managing the relationship informally, alongside all the other demands on their time, is significantly easier to manage than a structured, informed client with clear performance expectations.
Why it is a problem
It consumes MD time that should be spent elsewhere – Senior leadership time is the scarcest resource in most SMEs. An MD spending two to four hours per month on IT issues, supplier conversations and technology decisions is an MD not spending that time on clients, strategy and growth. The opportunity cost is real.
It produces poor commercial outcomes – An MD without technical IT knowledge and without the time to develop it is not well-positioned to challenge a supplier’s technical recommendations, negotiate contract terms effectively, or identify when a proposed solution is unnecessary or overpriced. Suppliers, consciously or not, take advantage of this asymmetry.
It means nobody is asking the strategic questions – The MD managing IT supplier issues reactively is not thinking about IT governance, cyber risk, technology strategy or whether the current setup is appropriate for where the business is heading. Those questions go unasked.
It creates a single point of failure – If the MD is the only person with knowledge of the IT supplier relationship and the systems it supports, that knowledge does not exist anywhere in the business in a structured form. When the MD is unavailable or when they eventually move on, the institutional knowledge goes with them.
The alternative
The alternative is not necessarily hiring a full-time IT director. For most SMEs the economics do not justify that hire. The alternative is ensuring that IT supplier management is handled by someone who has the technical knowledge to evaluate performance, the commercial seniority to hold the supplier accountable, and the time to do both properly.
In practice, this means either developing internal capability, which requires hiring or training or bringing in independent IT oversight on a fractional basis.
The fractional model means the person sits above the MSP relationship on the client’s behalf. He conducts the service reviews. He manages the renewal negotiations. He escalates issues at the right level and with the right technical and commercial context. He attends board meetings and reports on IT and cyber risk in terms the board can act on.
The MD gets their time back. The supplier operates in a properly managed relationship. And the business gets better IT outcomes at a lower cost than the informal management model was producing.