Published on July 17, 2023
MSPs must review and assess the fundamentals of
what will make them successful
Managed Service Providers (MSPs) must review and assess the fundamentals of what will make them successful. A key consideration, regardless of their size, is to regularly review the effectiveness of the operating model. Does it meet the needs of the business in relation to the next stages of the organisation’s development and the requirements of the customer? If the operating model is deficient, it could hold back the success of the business and may need to be modernised.
MSPs should regularly conduct an analysis, which involves comparing the current operating model to industry best practices and identifying any gaps or areas for improvement.
Here is a list of factors tech service providers must consider when evaluating their operating model:
- Review customer satisfaction:
Review customer feedback and NPS scores to assess customer satisfaction with the operating model. Review all feedback based on the successful optimisation of existing IT systems and tooling and then identify areas for improvement and take action to better address changing customer needs. - Alignment with business goals:
An MSPs overall business strategy and goals must be aligned with the operating model, which must also be agile enough to support new opportunities when they arise. Over time, things change, which causes the alignment to slip, so keeping a check on this and realigning as appropriate is important. - Assess the cost:
MSPs must assess the cost of maintaining the current IT systems and tooling to determine if the costs are justified and if they can be reduced by introducing new technologies and methods, such as service automation. It’s important to maintain a constant view of the cost to serve for all product lines and understand what factors impact margins and be aware of when they change and why. - Efficiency and effectiveness:
An MSP’s operating model should be designed to optimise the use of available resources and reliably deliver services in a timely and cost-effective manner. The minimum amount of rework is important because getting tasks right the first time is what the customer expects, but making errors will increase the cost to serve significantly and reduce customer loyalty. - Scalability:
Adapting to changes in demand and being able to handle growth is key to success. This is both a technical and cost challenge. Service automation will allow MSPs to grow quickly by adding large numbers of new customers without exponentially increasing costs. - Flexibility & agility:
Tech service providers must be able to respond quickly to changing customer needs and market conditions. Adding new services, whilst maintaining margins is important, as well as integrating acquisitions to ensure the maximum value of the investment is realised. Having the right systems and tooling in place will help. - Service quality:
MSPs must ensure that services are delivered to meet or exceed customer expectations in terms of cost, reliability, performance and support. The overall service levels must be the best they can be to ensure high levels of customer retention. - Compliance and standards:
The operating model must comply with all relevant regulations and industry standards, as well as standards set by the company internally. Setting standards allows an MSP to measure performance, quality and customer satisfaction, so any shortfall can be addressed.
The guiding principles of maintaining an effective Operating Model
To help MSPs focus on success, three key takeaways will help get quick results:
- Access to expertise and resources:
MSPs must have access to the necessary expertise and resources to manage and maintain their IT systems and tooling. This includes having the right staff with the right skills, augmented via partnerships and third-party providers, as well as having access to the right technology and services. Without the right expertise and resources, MSPs may struggle to keep up with the demands of the market and fail to grow their revenues. - Invest in the right technology:
MSPs must invest in the right technology and services to stay competitive and grow their revenues. This includes investing in the latest technology, such as service management and automation, as well as investing in the right products, such as managed security and cloud services. Without the right investments in the right areas, MSPs may struggle to keep up with the competition. - Focus on customer service:
MSPs must provide high-quality customer service to build trust and loyalty with customers. This includes providing timely and efficient responses to customer requests, as well as having knowledgeable and friendly customer service representatives. Without the right customer service, businesses may struggle to satisfy customers and ultimately risk losing them to competitors.
Modernise early or it just gets harder
Modernising the operating model is something that, for many MSPs, may be put off until it becomes such a big problem that the status quo no longer serves the business and could already be holding it back. An MSP will realise the time has come to act, because the IT systems and tooling have become so fragmented that the processes that depend upon them have become unnecessarily complex, repetitive, dependent on manual input and prone to error. This results in the MSP’s customers getting a bad experience, with low levels of satisfaction and loyalty.
Modernising the operating model is seen to be hard, expensive and can take a long time to value, which is why many MSPs put off making a decision until there is no longer an option but to embrace change. At POPX, we believe Smart MSPs tend to make this move sooner rather than later, as they are more likely to have ambitious growth strategies and have a higher propensity to invest in the necessary initiatives to support growth. What they look for is a way to de-risk their investment and accelerate transformation by partnering with experienced specialists that can take them on that journey. To find out more about how POPX can do this for your tech service provider business, please get in touch.
Jason Briscoe, COO at Arrow Business Communications:
"Working with POPX has been a game-changer for our MSP business. By evaluating and modernising our operating model, we've been able to streamline processes, improve efficiency, and deliver exceptional service to our customers. Their expertise and guidance have been invaluable in helping us integrate acquisitions and stay ahead of the competition, so we can focus on driving our business growth."
The POPX MSP Platform is powered by ServiceNow