Managed Service Providers (MSPs) are the candy that will make your company Fat. Giving a giant I.T. company the key to Cyber Security and dealerships' future uses fear and a dealer owner's technical knowledge. Your I.T. guy in your store will agree that their service is faster, safer, and less expensive. The only caveat with having an I.T. guy is that you have been told you can only have one. DealerNerd tells you this is backward thinking that starts a spending spree.
A couple of decades ago, there were no computers, I.T. guys, or BDCs, and Leasing was done using paper strips on the wall. One copier and a DMS system run on 508MTs using an RS232 Network, and your I.T. staff provides your DMS. No I.T. guy existed. Everyone knew the technology and how to run it. What happened? MSPs started taking advantage of this mishap of technical knowledge. They would encourage hiring an entry-level I.T. guy or sell staff instead of training customer-facing employees and managers. Computer Companies created a poor role (slow response to emergencies and daily issues) that does not serve the customers or dealerships. Your I.T. guy has been your trusted friend and created an environment of instant gratification. Now Computer Companies are after their salaries.
DealerNerd challenges the assessment of the Death of the IT Guy and challenges to explain how Dealer MSPs were able to charge so much. It's because the MSPs are open-chair chasers. They charge twice as much because dealerships are desperate when an I.T. person leaves. MSPs now have market share and can push dealerships, good I.T. Managers, Directors, and CTOs around. It takes an average of three days for MSPs to find a local Field Engineer (untrained in Dealerships or your Dealership) to be the hands, ears, eyes, and sometimes nose. It's becoming the most technical/financial scam in Dealer History. "It's not a part of your subscription" happens more than you think. I get calls daily.
The Dealership specific MSPs do not best serve your "auto and heavy truck dealers with outsourced monitoring and management of a dealership's entire I.T. environment." You do, just like you secure your front door, back door, factory statement, and employees. If something happens, the MSP will not be responsible for the hack; they will tell you which employee to fire. They will also take advantage of your fear by selling you a larger package. You had EDR, but the new XDR is far better.
There is a much better way and trend wise the fortune 500 companies are doing. Don't be last year's profit pig. TEACH YOUR EMPLOYEES TO BE I.T. MASTERS.
Why should we stop using MSPs and Start Training Today?
Interest in Dealership MSPs is unfounded; a dozen computer companies in your area are ready to install Antivirus on each computer and ask you to send them your support tickets. You can do this all in-house as we have for centuries. Crime isn't a new problem, just a new doorway. Why are businesses flocking to MSPs? They are pumping you full of fear.
MSPs are old school, just like coffee machine service. The coffee vendor will sell you the percolator, the pot, the supply, and the expertise. Come on; it's just coffee. Suppose your employees are taught how the machine is maintained. Cross-training sales staff, service staff, and parts advisors could cure your monthly coffee service fee. With the invention of Amazon, you can source your machine, filters, coffee grounds, and cups for far less.
- Cyber Security - If each employee understands their role in Cyber Security, an event will never happen. Many open-source, low-cost, easy-to-use software is available right now. Some are one payment, so you don't have to pay MSPs monthly bills. MSPs do the same with free software, low maintenance, and a significant fee for dealerships. If employees were taught cyber security, dealer owners could save $60 per computer per month.
- Myth #1 Cyber Security is a government effort: Another fear tactic is saying the hacks come from China and Russia. They don't. Hackers are Chinese and Russian citizens hired by their government; complete fantasy. Hackers use China and Russia's network because it streams 7 bits with the 8th bit as a redundancy check as the endpoint. This pattern ensures the downloaded information is accurate while the person is sitting in your waiting room. Travis (owner of DealerNerd) spent a year overseas learning how to hack Cisco and Microsoft inside these networks to hide their identity. The reality, hackers are ex-employees( or hired by ex-employees) that were left unchecked.
- Myth #2 Time as a Physical Barrier: MSPs often say they are watching 24/7/365, and their ticket response is the next business day - do you genuinely believe there are two different service levels? If they protected your Dealership, they would be giving up revenue. They can charge huge sums when you are attacked to reduce the regulator fees. The only way to protect yourself is by coaching, training, hiding, and misdirection. Without giving away trade secrets, the best defense is a cloaked network and employees.
- New Government Rules - This is another scare tactic. PCI compliance companies did the same thing. MSPs created this massive workload to scare people into thinking they needed a service. If they disclosed the workload or trained the Dealership to do it themselves, the MSPs would lose 90% of their profits. Each regulation is designed to help small businesses understand their responsibilities. Reading the CCPA, FTC, CIS, and NIST is fine, but reading the cliff notes says, "make sure this content is written and understood by all employees." The regulation asks for no more than documentation, a consistent meeting to review documentation, and self-assessment. Be aware you already have a policy book and need a couple more sheets of paper added and reviewed monthly.
- Talent Scarcity - Yet another scare tactic. Train your staff to be I.T. competent. Please send them to CompTIA, and get the training they need. Let the employee take the exam, split the test fee, and help them get the certificates. Their new certification may lead to their departure, which is why you train in pairs or groups. The shared loyalty will bring you car sales from their family and friends. Training single employees may be cheaper but put you at risk of dependence. I don't remember you sending one tech to learn E.V. or Diesel. Send groups related to their tasks in the Dealership.
- Smart Money - I agree with the I.T. manager role changing. It's more of a high-tech H.R. role, ensuring the humans are ready. MSPs are twice the cost of training and 1000% more expensive when your system is down (each day). No one in town will touch your system because you tossed your local I.T. manager. The last Dealership I talked to had to fly in a guy 2,000 miles to fix an issue. Their excellent support (twice the I.T. Guy's salary) had an extra (non-subscription) cost of $20,000. What if the staff was trained? We have dozens of contracts signed and are waiting for their MSP Contract to expire. MSPs don't save money.
- New Technology - MSPs will give you a false sense of new technology. The top four Dealership MSPs are using a Could Server in Atlanta that can be blocked anytime with their 2013 version of Antivirus. Implementing new software takes a ton of labor to "touch all the computers" to upgrade. If this is your update strategy, your Dealership is vulnerable to zero-day attacks. If your staff managers are trained to use software (OEM updates) to update computers and learn the tools to deploy new software at a click of a button, you can have the top tech at all times.
Remember when you started paying Google for Adwords and couldn't get off the service? It cost hundreds of thousands of dollars. MSPs are the same; it's an unhealthy addiction. The only cure is to train your staff. Be the regulation champions, know what your computer is doing, and become a Dealership that protects customer data and does not outsource it.
To achieve top efficiency. Train your staff. "You can do it." You have a professional company (DealerNerd) that can increase your technical employee competency and help you reach all your goals for 2023. While reducing computer support costs. Finding a path to Co-Managed with the purpose of self-managed works for FloorPlan, why not Computers? Put this way, you spend thousands on training the sales and service staff. It's time you caught up with the rest of your Dealership.