Whether your role as a Managed Service Provider (MSP) is to free up corporate IT teams for higher-value work or to act as the primary IT team, the following four pillars will help you position your MSP firm for profitable client engagement.
Four Key Pillars of Successful MSPs
This is an area where MSPs vary widely. Larger MSPs have the resources to offer a wider variety of services while other MSPs tend to specialize in more specific areas such, as IT monitoring and infrastructure support, applications or business processes. In either case, it’s important to clearly articulate where your services add value. For example, IT monitoring can be as basic as offering system status and alerts, which may be enough for some clients, but lacking for others. Top Managed Service Providers offer a range of capabilities tailored to each client’s needs and budget today and tomorrow. This not only offers a migration path for clients, but also an added revenue stream for the MSP.
Consider the competence of the people providing the services as well as the work flow and process framework for delivering the service. Top MSPs provide proof of certifications for their staff as well as indicate service delivery process tools and frameworks such as ITIL and ISO/IEC 20000. And beyond the Service Level Agreement, Top MSPs also provide documented workflows that describe how they will handle processes for managing incidents and changes, in addition to workflows on how the client-MSP interface will be managed. For example, in the event of an incident, documentation should explain the workflow, identify MSP contacts and describe escalation procedures.
A one-size-fits-all approach rarely works in IT service management. Although we’ve found that there are core service requirements that most IT departments require, the question to ask an MSP is “Are they willing to adapt for those services that may not be part of the core?” For example, do you really require five nines uptime? . . . you may if you’re running a commerce site. However if you’re not running a commerce site, will the MSP adapt the SLA to accommodate your requirement and budget? Top MSPs offer service level flexibility and also complementary services that provide added value for the client and another revenue stream for the MSP. So let’s say you’re an MSP offering network monitoring: consider also offering VMware vCloud monitoring, as long as you can do so profitably.
- Cost Effectiveness
The whole point of Managed Service Providers is to help companies reduce IT costs, optimize IT resources and/or gain an IT competence that would otherwise be cost prohibitive. Whether you’re seeking Managed Services or providing them, understand the value (as opposed to cost) of the services to make an accurate business case. For example, consider the business value of daily tactical IT tasks such as monitoring or back up. Then identify what it costs to conduct the tasks in house versus outsourcing them. Also consider the opportunity cost of applying those same resources to daily tactical IT tasks instead of strategic IT work such as an enabling platform that will help grow the business. A broader perspective on costs, value and opportunity costs helps drive more effective IT business decisions.
The top MSPs aren’t necessarily those that are the largest or have the broadest service catalogs. Top performing Managed Service Providers understand and anticipate the needs of their clients and offer the most effective mix of services that meet the clients’ needs at a price that’s cost effective for the client and profitable for the MSP. In today’s dynamic IT environment, the mix of services and outsourcing potential changes rapidly.
Need help with your four pillars? Let Nimsoft help improve the IT services you buy or provide.