Managed services can decrease in-house IT costs by more than 40% while simultaneously increasing IT efficiencies by 50-60%. However, despite this, the overly rigid and all-encompassing structure of many managed services contracts can be problematic enough to undermine the benefits. So, how can you leverage managed services without encountering the downsides?

Our team of technical experts has seen the impacts of unadvantageous service agreements on companies first-hand. From gotchas to inefficient ticketing systems, we’re familiar with the most problematic aspects of managed services. 

Based on our experience, this article covers the five most common problems with managed services and how to avoid them. 

• 1. Gotchas in Contracts
• 2. Overreliance vs. Underreliance
• 3. Lack of Documentation
• 4. Limited Alignment With Your Compensation Administration Processes
• 5. Ticketing Systems That Create Bottlenecks

Your Guide to Effective Incentive Compensation Managed Services At a Glance

Think of that one thing that bugs you every time you log in. Maybe it's a process that's more complicated than it should be. Maybe it's a manual task that eats up too much time. Maybe it's something you just wish could be slightly tweaked to work the way you want it to. If any of that sounds familiar, you're not alone. And that's exactly why our team offers flexible managed services.

The way most people think about managed services is rigid. They assume it means signing up for an all-in contract with a long-term commitment, expansive scopes, and costs that quickly add up. If you are looking for a managed service provider that offers a light touch, simply taking on the specific tasks you want to be tackled without expanding the scope of their role, it can be hard to find. However, that's not how we do things.

Our approach is built around the needs of the client. Rather than offering an inflexible, one-size-fits-all service agreement, we tailor our level of involvement based on clients' requirements. Whether you want comprehensive system management or extra hands-on keys to troubleshoot configuration issues, we are here to help. For example, here are a few types of support that clients often request:

• A full staff augmentation: We handle everything, so you don't have to.
• A light-touch safety net: We're here when you need us, but not in the way when you don't.
• Tactical support: Best practices, small tweaks, and expert guidance.
• Extra hands-on keys: Implement changes, improve automation, or integrate new tools.

Think of us as an extension of your team, ready to step in wherever you need help—without the gotchas, long-term lock-ins, or unnecessary complexities.

The 5 Problems With Managed Services and How to Solve Them

The challenges you may face with managed services agreements depend on your sector, operational processes, and system infrastructure. However, five key issues seem to apply to all types of organizations. 

Here are the critical issues you should be aware of and what you should look for in a managed services partner to ensure you don't encounter them:

1. Gotchas in Contracts

If you are considering investing in managed services, one of your biggest fears may be getting locked into a rigid, expensive contract with hidden fees or unrealistic limitations. The main problem here is a lack of flexibility in contract types. Many providers use an allotment-of-hours approach, which is a good option for companies that want to retain their managed service provider long-term. However, if you don't want to rely on your managed services provider forever, an allotment-of-hours contract might force you to overcommit and pay for unused services, resulting in wasted resources and lost revenue. In other words, if you prepay for a set number of hours, you lack the flexibility to scale services up or down as needed.

For example, a company that initially requires high-touch support might find itself overpaying when its needs decrease, but it remains locked into a long-term contract. On the other hand, businesses that need urgent additional support may be hamstrung by rigid agreements that don't allow for quick scaling. 

How We Solve It:

At Canidium, we've eliminated these gotchas. Our contracts are structured to be flexible and client-friendly. We meet you where you are, offering:

Prepaid Bucket of Hours: Clients prepay for a set number of service hours, similar to an allotment of hours contract, geared towards organizations that want our expert team to augment their staff long-term. This option provides you with:

• Access to a dedicated, named resource team familiar with your system
• Discounted hourly rates
• No hidden fees

Pay-As-You-Go: On-demand services without long-term commitments. You don't have to purchase hours ahead of time; you simply use Canidium's team at will, only paying for what you use. This option includes:

• Flexible contracts tailored to specific projects.
• Access to our expert team. 
• Services scale up or down based on your needs.
• Only pay for the number of hours you wind up using.

This isn't a "too good to be true" scenario—it's a rethinking of managed services. We put the client first, ensuring you get the right level of support without unnecessary commitments.

2. Overreliance vs. Underreliance: Meeting You Where You’re At

Another significant concern you may have is becoming highly dependent on the services of a third party. This is a valid fear in some cases. Managed service providers create dependency when they keep clients reliant on them indefinitely, ensuring continued revenue at the expense of client independence. Alternatively, a managed service provider may fail to provide adequate support, leaving you struggling to manage complex systems on your own.

Overreliance can lead to increased costs and inefficiencies, as businesses may find themselves perpetually outsourcing work they could handle in-house with the right training. Underreliance, on the other hand, means that critical issues go unresolved, leading to system inefficiencies, errors, and frustration among compensation administrators. Either way, the situation is untenable.

How We Solve It:

The key to your success is finding the right balance for your specific organizational needs, not those of your managed service provider. Some companies want to outsource the maintenance of their system to a team of experts. In contrast, others simply need help getting their legs underneath them before their internal resources take over. We cater to both types of clients. Our goal is to make you as proficient in your solution management as you want to be. If you want to become self-sufficient, our engagements are structured around:

• Guided working sessions: We teach your team how to use the tools effectively.
• Recorded training sessions: So you can refer back to best practices anytime.
• Flexible contracts: As you become more confident, you can reduce reliance on our services.

In essence, if you don't want to rely on a managed services partner, we will help you become independent. In these cases, if we do our job right, you eventually won't need us. 

3. Lack of Documentation

In order for your internal team to understand your configured solution, your software implementation or managed services partner needs to provide comprehensive documentation. Unfortunately, there are cases in which managed service providers fail to furnish proper documentation, making it difficult for companies to transition support in-house or train new employees. Without clear, updated documentation, you may struggle with knowledge loss when key employees leave. Consequently, you will need to repeatedly rely on external support for the same issues.

For example, a company with a complex incentive compensation structure might face significant delays and errors if a new admin inherits a system with no documented history of configurations and integrations. The lack of transparency creates inefficiencies, making troubleshooting and system updates cumbersome.

How We Solve It:

The answer to a lack of documentation is clear. We ensure that all key system knowledge is documented and accessible, including:

• Bespoke documentation: Customizing documentation for your unique system setup.
• Ongoing updates to Xactly documentation: Keeping operations and integration guides current for future users.
• Best practices repositories: Providing additional guidance beyond standard documentation.
• Recorded working sessions: Capturing real-time problem-solving to ensure continuity.

This proactive approach prevents knowledge loss and empowers your internal team with the necessary resources.

4. Limited Alignment With Your Compensation Administration Processes

Most managed service providers offer general technical expertise, but without solution-specific, in-depth working experience, it's impossible to understand all of the intricacies of incentive compensation solutions like Xactly. Misalignment between your provider and your business processes can lead to inefficiencies, misconfigured systems, and even compliance risks.

Let's use an incentive management solution as an example. If a managed service provider doesn't fully understand how sales teams are compensated, they might misconfigure incentive rules, leading to incorrect payouts and frustrated employees. These errors can cause mistrust in the system and require additional work from administrators to rectify miscalculations.

How We Solve It:

Our teams specialize in the software we design, implement, configure, and manage. Each solution we partner with has a dedicated team of experts with unparalleled insight into the software they work with. For example, our Xactly team has been where you are. Many members of our team started their careers as comp admins using Xactly. In fact, the founder of our Xactly practice has around 17 years of experience with the software. This allows us to offer detailed strategic mapping that goes beyond what the average team of technical professionals can do. At the same time, we specialize in all Xactly tools, not just Incent. Our team brings:

• A team of former admins: We know the system inside and out.
• A primarily North American-based team: With global resources available as needed.
• A close relationship with Xactly's customer success and product teams: If an issue arises, we know how to escalate it effectively.

This deep expertise ensures we align seamlessly with your compensation administration processes, reducing friction and maximizing efficiency.

5. Ticketing Systems That Create Bottlenecks

IT ticketing systems add steps for clients, slow down services, and are generally a pain. Yet many providers rely on ticketing systems, forcing clients to wait for assistance with urgent needs. Traditional ticketing systems can be impersonal and inefficient.

Imagine encountering a system error right before payroll processing. With a ticket-based system, employees might have to submit a request and wait days for a response, jeopardizing timely and accurate payouts. Such delays can cause compliance risks and dissatisfaction among employees.

How We Solve It:

Rather than relying on a ticketing system, our teams develop a more personal relationship with clients. We work closely with clients' internal resources, building robust lines of direct communication. This allows us to eliminate and replace the traditional ticketing system with a more efficient approach. Here's how:

• Dedicated team with direct lines of communication: You always have a direct line to the people who know your system best.
• Fast response times: No service level tiers or waiting in a queue.
• More agile and personal support: We build real relationships with our clients.

The result? A service model that's not just more efficient but also more human.

Optimizing Your Incentive Compensation Management Solution Without Lifting a Finger

Managed services don't have to be frustrating, expensive, or rigid. At Canidium, we've redefined what managed services should be: flexible, client-focused, and designed to make your life easier. Whether you need full staff augmentation, light-touch support, or somewhere in between, we meet you where you are and help you get to where you need to be.

If you're tired of the usual managed service headaches, it's time to rethink what's possible. Reach out to our team to discuss how we can support your success on your terms. In the meantime, learn more about the role of managed services in digital transformation.