Why MSPs need a good client offboarding process

Find out how you can make this happen.

Three reasons why

There are three primary reasons we all “lose” clients. Sometimes we just get fired. Next, some clients retire, cease operations, or sell out. Finally, at some point, we will fire clients as well. This last category covers a litany of issues from refusal to address security issues (the most common), to communications or personality issues, or even payment issues.

What they have in common

No matter the reason for the dissolution of your relationship, a graceful and professional separation is always preferable. Whether a business winds down or fails, you may earn a referral from an employee that moves on. Even in the case of firing, referrals still happen and occasionally, there may also be the possibility of a “second act.”

In each case, you will have responsibilities in terms of knowledge transfer, and, in the case of closure, data preservation. Hopefully, your MSA clearly delineates both your and your client's responsibilities in the event of a separation, for any reason, and covers how this billing will be handled, covering your interests. If this is not the case, addressing that should be a priority.

Retirements and business failures

We have experienced a large amount of this over the past few years. You might assume this is a very “clean” transition, but in many industries, you will have to work with them to ensure they meet the requirements for data and email preservation for a period mandated by regulation(s) or the IRS. Be sure your client involves their attorney.

Sales and acquisitions

We also saw several of these in 2020, including a sale to family members, and two acquisitions by national firms. In the former case, we retained the business, but in the buyouts, we were almost immediately cut out. While sales to a local company or family handoffs often end well for us, that is rarely the case in national buyouts.

When you must fire

Every one of us knows the pain (and the relief) of firing a truly problematic client. The most common drivers here are insecure behavior, communications, or payment issues. Nobody can tell you where you should draw your lines in the sand, but in my case, it all comes down to a cost-benefit analysis (which is very analytical), tempered with a PITA consideration (which may not be as quantifiable). This is usually the hardest type of transition to manage well and brings its own unique set of challenges.

Regular off-boarding

First, ensure that you have a complete, well-documented process of shutting down and removing management and security tools, changing mail flow, transitioning management of cloud services, transferring necessary data securely, and documenting it all.

This may not be a commonly used process, and therefore ad hoc. That makes it riskier, and error-prone and can lead to difficulties in covering all the bases and getting paid for your efforts. If you don’t have this documented, do it now before you need to use it. And don’t forget that this is stressful and will likely exacerbate any existing relationship issues.

We break offboarding into three phases:

- Gathering documentation

- Sharing the information with the client and the incumbent provider

- And securely executing the information exchange

Finally, you must fully document everything that has been done, while carefully ensuring that you get paid for all your efforts per the wording of your MSA.

Business dissolution

In this case, there is no incumbent provider, but you will need to determine what information must be preserved, and for how long. This will involve discovery, and research into legal and regulatory requirements. The client will also have choices to make, after consulting with their accountant and attorney. Do not skip this step.

This process will be strongly influenced by not only your toolset and practices but by the homogeneity of your practices and client base itself. Some of us provide bespoke service sets to each site, others do nearly the same things for everyone. But you have an ace in the hole you have not considered, your (well-documented, right?) onboarding process.

I would not say you can just reverse the onboarding process for this, but a good process does give you a leg up here. There are potential complications depending on the replacement provider, but the worst-case scenario is getting fired with no new provider on hand. Whatever the case, carefully document every security process that you are terminating, in writing.

Final analysis

Offboarding is a normal part of MSP life, but that does not make the process any less critical. Build that process now, before you need it, and if you have a good onboarding process already, start with that. Recognize the different types of off-boarding as well as their ramifications. Done well, off-boarding not only protects you but can lead to a better business.