With businesses increasing their dependency on technology, a Managed IT Service Provider (MSP) is no longer just an option—they’re transforming into mission-critical infrastructure partners. They ensure your systems are secure, available and scalable as well as compliant.
But here’s the hard truth:
An unskilled, non-transparent or insufficiently equipped Managed IT Service Provider may be detrimental to your company, revealing it to significant security leaks, data loss and failure to operate.
That’s why vetting your provider thoroughly is crucial. This blog takes you through 25 red flags in detail that show that your company should not choose an MSP as your business partner.
Lack of Transparency and Communication
1. No Clearly Defined SLAs (Service Level Agreements)
An SLA is what you sign to ensure that the Managed IT Service Provider will perform to specific standards, e.g. high uptime, fast response time, fast fix time, etc. When a provider jumps over SLAs or gives you non-binding weak words such as we will respond as soon as possible, run from that provider.
Why it matters:
- No SLA = no way to hold the provider accountable.
- You can’t measure ROI or escalate unresolved issues.
What to do:
Request specific SLAs that will break down metrics, duties, escalating, and non-adherence retribution.
2. Slow or Unresponsive Communication
Response time by a support ticket or email has to be within hours, or even days, you are in trouble. Downtime doesn’t wait, and neither should you.
Why it matters:
- A slow reaction in the situation of cyber incidents or outages may end you losing customers and even reputation.
- Internal teams become frustrated and productivity suffers.
What to do:
Request communication SLAs and support ticket response rates and a proof of their helpdesk system.
3. No Escalation Path or Dedicated Account Manager
There will be no responsible individual checking on your account and your problem(s) may end up in the cracks.
Why it matters:
- You’re stuck chasing generic support teams every time.
No one truly knows your environment or priorities.
What to do:
Ensure the Managed IT Service Provider assigns a dedicated account manager, not just a shared mailbox.
Weak Technical Foundation and Capabilities
4. Outdated Tools or Technologies in Use
There are still Managed IT Service Providers that use legacy systems with low levels of automation, low level of reporting or unsecure protocol.
Why it matters:
- Outdated tech creates hidden security risks.
- Slow or clunky platforms hurt employee experience.
What to do:
Request to be furnished with a list of their ticketing, monitoring, patching and back up tools. Inquire how often they update their stack.
5. Lack of Certifications or Industry Credentials
An MSP without certifications can be shortchanging training, security and compliance.
Why it matters:
- Absence of ISO 27001 OR SOC 2 = possible mishandling of the sensitive data.
- Any certifications of any vendors (e.g. Microsoft, Cisco, AWS) = low technical professionalism.
What to do:
Verify certifications. Check badges such as ISO, Hipaa Compliance, Microsoft Gold Partner, CompTia Security + etc.
6. No Proactive Monitoring or Maintenance Strategy
Where your Managed IT Service Provider performs only when something goes wrong, that is a break-fix model—and it is more expensive in the long-term.
Why it matters:
- The vulnerability that was missed and downtime is not noticed until it is late.
- Preventive maintenance is essential to long-term IT health.
What to do:
Make sure that they follow up 24/7 active surveillance, patches, system health, and alerts.
7. Inability to Scale Services with Your Growth
Other Managed IT Service Providers are designed to support small businesses—and that is quite ok—at least unless you have some plans to expand.
Why it matters:
- You may outgrow their tools, processes, or service limits.
- They possibly do not have the infrastructure to fully meet enterprise-level requirements (such as hybrid cloud, data compliance of any sort etc.).
What to do:
Discuss future scaling needs. Will they be able to handle you as you scale up to 50 to 500 users? Can they support global operations?
Poor Security Posture
8. No Cybersecurity Roadmap or Audit Reports
A significant red flag is when the Managed IT Service Provider is unable to present you with the reports of security audits, or a documented cybersecurity framework.
Why it matters:
- You’re entrusting them with your entire infrastructure.
- Lack of documentation often signals poor internal practices.
What to do:
Request their cybersecurity road map, the frequency of the audits, and the outcomes of penetration testing.
9. Does not Provide Multi Factor Authentication (MFA) or Endpoint Security
MFA is table stakes. When they fail to do so, or do not prescribe EDR (Endpoint Detection and Response), they are in fact opening themselves to attackers.
Why it matters:
- Most breaches start at the endpoint.
- Weak authentication is a top cause of ransomware.
What to do:
Ask how the Managed IT Service Provider protects their endpoints, which EDR solutions they utilize, and whether their MFA is enforced on all devices and applications.
10. No Incident Response Plan or Backup Strategy
If disaster strikes, do they know what to do? And how fast?
Why it matters:
- No clear IRP = delays in containment, escalation, and recovery.
- None of the tested backup strategies = loss of all data on the event of breach or outage.
What to do:
Request to see their written Incident Response Plan, and a copy of Disaster Recovery Plan (DRP).
11. No Data Lawful Support (e.g. GDPR, HIPAA)
In case your company deals with healthcare, financial, or international data, your Managed IT Service Provider must support compliance.
Why it matters:
- Fines can reach millions.
- Compliance gaps can break client contracts.
What to do:
Make sure that the MSP evinces the compliance officers, perceives the GDPR/HIPAA/SOX and offers help with auditing.
Questionable Business Practices
12. No Clear Pricing Structure or Hidden Fees
Avoid the hazy per device costs that mushroom into ambiguous additional features.
Why it matters:
- Surprise fees for basic support create tension.
- Budgeting becomes impossible.
What to do:
Get itemized pricing. Ask the Managed IT Service Provider for transparency on what’s included and excluded in every plan.
13. Vendor Lock-in or Proprietary Systems
Certain MSPs lock you into a specific piece of software or email system, or some other proprietary app, which is hard to get out of.
Why it matters:
- You lose flexibility and control.
- Switching providers becomes expensive and painful.
What to do:
Insist on open standards, exportable data, and vendor-neutral solutions.
14. Over-Promising, Under-Delivering Sales Tactics
When a sales pitch is too good to be true, then it is.
Why it matters:
- Glossy proposals often mask operational weaknesses.
- Misaligned expectations = disappointment post-contract.
What to do:
Before signing, request to talk with one of the clients or read the written service metrics.
15. Inflexible Contract Terms or Long-Term Lock-ins
The 3-year contract that has no right of exit is dangerous particularly in case of poor service.
Why it matters:
- You lose agility to switch or renegotiate.
- You’re trapped even if things go wrong.
What to do:
Seek flexible contracts with your Managed IT Service Provider that offer clear opt-out options.
Operational and Support Red Flags
16. Disaster Recovery Preparedness or 24/7 Support
Outages and attacks don’t wait for business hours. Your Managed IT Service Provider shouldn’t either.
Why it matters:
- A few hours of downtime could cost thousands.
- Clients may never return after repeated outages.
What to do:
They should be able to provide real 24/7/365 services, as opposed to weekend on-call support.
17. No Onboarding or Documentation Process
There is a good chance your team will be left in a confused state in case your Managed IT Service Provider fails to onboard you correctly.
Why it matters:
- Poor documentation = inconsistent service.
- The employees will not know how to report or fix the IT problems.
What to do:
Request onboarding tutorials, user guides, escalation diagrams, and training schedules.
18. High Employee Turnover in Their Team
A flapping door of engineers in your MSP means your stability will be hit as well.
Why it matters:
- You’ll have to keep re-explaining your environment.
- Institutional knowledge disappears.
What to do:
Ask about staff tenure, training programs, and internal culture.
19. No Ticketing System or Support Metrics
Relying on email alone? That’s chaos waiting to happen.
Why it matters:
- No tracking = issues slip through the cracks.
- No visibility into how long resolution takes.
What to do:
Request access to their ticketing system and inspect average resolution rates.
20. Subcontracted Services Without Disclosure
When your Managed IT Service Provider outsources most of the vital operations without your knowledge, you will be subscribing to an unknown.
Why it matters:
- Lack of transparency leads to accountability issues.
- Third-party risks are difficult to manage.
What to do:
Ask for a list of subcontractors and their responsibilities. Insist on NDA and security records of all third parties.
Trust & Reputation Red Flags
21. Poor Online Reviews or No Case Studies
When other customers are not saying the good things about a Managed IT Service Provider, then that is a problem.
Why it matters:
- No reviews = lack of credibility.
- Poor reviews = patterns of bad service.
What to do:
Check Google, Clutch, G2, and other B2B review platforms.
22. No References or Client Testimonials Available on Request
As a provider, it is possible to tell that a Managed IT Service Provider who is avoiding references must be hiding something.
Why it matters:
- It shows a lack of transparency.
- You won’t know how they perform in real-world scenarios.
What to do:
Request at least 2-3 references of existing clients in similar industries.
23. Reluctance to Sign NDAs or Security Agreements
If they hesitate to protect your confidential information—walk away.
Why it matters:
- Your IP and data could be at risk.
- Trust and security go hand-in-hand.
What to do:
Insist on NDAs and verify their data handling policies.
24. The Absence of a Physical Address Office or Team Presence
The question arises about a Managed IT Service Provider that has no office, and no team members listed.
Why it matters:
- Where do you go if something goes wrong?
- Are they even a legitimate business?
What to do:
You can request to visit their office or get to see the core team (online or physically).
25. Lack of Evidence that the Business is Continuous or Stable
How are you going to survive in case your Managed IT Service Provider becomes bankrupt in the next quarter of the year?
Why it matters:
- No disaster plan = your business is at risk.
- You can’t afford to lose access to mission-critical systems.
What to do:
Order a business continuity plan, disaster recovery warranties and insurance verification.
Conclusion
Selecting a Managed IT Service Provider is not a decision on the IT level, but a crucial relationship to the business.
The wrong one will be costing you money, time, compliance, and even the reputation of your company.
The correct one turns into a kind of co-pilot of innovation, protection and growth.
Take the time. Ask the tough questions. Read the fine print. It is worth checking those red flags and signing up to that contract.
FAQs
Vetting an MSP is crucial because a poorly chosen provider can expose your company to significant security leaks, data loss, and operational failures, jeopardizing your reputation and revenue. MSPs are no longer just an option but mission-critical infrastructure partners.
Key red flags include: no clearly defined Service Level Agreements (SLAs), slow or unresponsive communication (taking hours or days for critical issues), and the absence of a clear escalation path or a dedicated account manager. These indicate a lack of accountability and potential for severe delays during incidents.
Request a list of their tools (ticketing, monitoring, patching, backup) and inquire about their update frequency. Verify their certifications (e.g., ISO 27001, SOC 2, Microsoft Gold Partner) and ensure they have a proactive monitoring and maintenance strategy, not just a "break-fix" model. Also, confirm their ability to scale services with your future growth.
MSPs embed compliance into your IT stack by providing prebuilt audit-report templates, real-time dashboards for compliance checks, and monthly or quarterly audit readiness checkpoints. They manage data segregation, meticulous documentation, and real-time tracking to ensure adherence to regulations like GLBA, PCI DSS, and SOX.
Major cybersecurity red flags include: inability to present a documented cybersecurity roadmap or audit reports, failure to provide Multi-Factor Authentication (MFA) or Endpoint Detection and Response (EDR), absence of a clear Incident Response Plan (IRP) or tested backup strategy, and lack of support for data privacy laws (e.g., GDPR, HIPAA) if applicable to your business.
Be wary of: no clear pricing structure or hidden fees, attempts at vendor lock-in with proprietary systems, sales tactics that over-promise and under-deliver (verify with client references), and inflexible or long-term contracts without clear exit options.
Outages and cyberattacks don't adhere to business hours; a few hours of downtime can cost thousands and lead to client loss. You should ask for proof of real 24/7/365 services (not just on-call), their written Incident Response Plan, and a copy of their Disaster Recovery Plan (DRP) with testing records.
Poor or no online reviews, and a reluctance to provide client references or testimonials, are significant red flags. They indicate a potential lack of credibility or patterns of bad service. Always check independent review platforms (Google, Clutch, G2) and request 2-3 references from existing clients in similar industries.