The three keys for more profitable MSPs
As digital transformation continues at pace across Asia, organizations of all shapes and sizes are changing how they manage IT services. They have abandoned the traditional high up-front cost model of on-premises infrastructure and solutions, to a pay as you go, subscription or everything-as-a-service (XaaS) model.
Business customers are now consuming services on-demand, so they are turning to managed service providers (MSPs) to equip them with a well-structured and protected IT infrastructure. With services such as the Internet of Things (IoT), artificial intelligence (AI) and cybersecurity in great demand, MSPs are positioning themselves to offer and maintain digital-based solutions and becoming one of the driving forces of digital transformation.
By outsourcing services such as network, infrastructure and security, companies can decrease their internal costs and remain agile. So it shouldn’t be surprising that demand for MSPs has increased 30% in APAC over the last year. But increasing demand can also breed competition as new entrants look to capitalize on the trend. This article will focus on three ways MPS can continue to grow and gain a competitive advantage.
Finding customers and retaining them is an expensive proposition. It’s never been more important to keep your current customers happy in the long term. Research shows that a 10% boost in customer retention can expand the value of a business by more than 30%.
MSPs can capitalize on their deep customer ties to identify challenges and proactively solve them for clients to become a trusted advisor and boost customer loyalty. Not only does this provide opportunities to upsell and reduce churn, but satisfied customers are more likely to give you positive reviews to help win new clients.
Ideally MSPs should automate onboarding processes to be well-documented, efficient, repeatable, and scalable. They should also design the customer journey so that new customers experience value as soon as possible. Communication with your customers is key part of the experience - let them know about any new services or opportunities available.
By outsourcing services such as network, infrastructure and security, companies can decrease their internal costs and remain agile.
It’s essential for MSPs to constantly transform their product offerings. Business customers want to consume technology more easily with a one-stop shop – a single vendor for most, if not all, of their business needs, because IT is not their core business.
In this uncertain economy, business customers want to pay monthly, rather than make a large, one-time investment up front. MSPs need to offer a variety of unique bundled services such as software-as-a-service (SaaS), cybersecurity as a service, data storage and mobile device support. These IT services can be billed on a subscription basis and provide a way to grow a recurring revenue stream.
MSPs can scale by partnering with a cloud platform provider that manages subscription and billing, vendor and product information, and vendor onboarding across multiple channels. A platform also enables companies to create their own digital ecosystems that can simplify connections between partners through a centralized point. No single stakeholder needs to own or operate all components of the system, which means this network of partners, from vendors and distributors on to resellers, offers combined value. A B2B digital marketplace encourages customers to take advantage of opportunities to cross-sell and upsell.
"MSPs can scale by partnering with a cloud platform provider that manages subscription and billing, vendor and product information, and vendor onboarding across multiple channels."
A common mistake companies make is trying to go it alone. It can be a painstaking process to build application program interface (API) systems for your marketplace and manage them. Expand your reach more rapidly through a digital ecosystem that enables you to establish one set of APIs for your products into a catalog that can be distributed globally. Building out through an ecosystem is less expensive, less time-consuming and helps businesses scale faster.
Providing more services increases customer loyalty because you’re saving them the hassle of seeking products and services elsewhere. Cloud-based solutions also expand their reach of potential customers. In addition, a platform allows MSPs to streamline the entire procurement, fulfillment and billing activity – all in one place.
Compliance regulations can be difficult to manage when moving to the cloud or making changes. Compliance-related issues can fall through the cracks and open up potential security threats. As security and compliance needs grow, MSPs can fill a need by providing a comprehensive solution to maintain compliance and keep the cloud running efficiently. Furthermore, SMBs in the managed services space can compete with large enterprises by creating a niche, such as including compliance-as-a-service. This is particularly useful for organizations looking to comply with complex international legislative challenges such as (payment card industry) PCI compliance or (General Data Protection Regulation) GDPR.
To provide effective security services, you need visibility across your organization rather than keeping compliance responsibilities disconnected or siloed. A cloud platform provider with end-to-end automation can help you fill the gaps – with a unified view and data integration to improve visibility and workflows.
The engine driving MSPs
Automation is at the core of MSP success. With automated processes such as provisioning and billing, end customers can consume technology more easily and on a self-service basis. MSPs can benefit from automation platforms with pre-programmed templates that enable procurement and fulfillment operations. This allows a “one-click” shopping experience with vendors and creates huge cross-selling and bundling opportunities. No matter how big you are as an MSP, doubling-down on automation can help you thrive in a digital-first world.