How To Make The Move And Be A Successful MSP

A hardware-centric focus isn’t going to grow your business fast or make it last for decades. The profit margins are thin and the business of “reselling” is old school. The real opportunity for channel partners is around professional services and managed solutions.

Today’s most successful channel partners differentiate their business on value, not volume, and have re-evaluated their service offerings to move from a pure-play reseller to business IT consultant. They’ve successfully transitioned from a traditional value-added reseller (VAR) to a more specialized managed service provider (MSP), and in turn changed the conversation with customers and prospects, as well as the cash flow from a one-and-done sale to a recurring revenue stream of managed IT services and support offerings.

The move to MSP also results in higher business valuation because of the predictability of revenue and profits. An MSP model is built around ongoing service delivery and also helps you build greater stickiness with your customers who will come to see you as their trusted IT business partner — not just another vendor.

If you’re currently grappling with how to transition from a reactive, break-fix routine to a more proactive, managed services delivery model, here are a few tips to make the business case and ultimately, make the move:

1. Flexible licensing with modular service offerings: Not all customers require the same level of IT support or place the same value on outsourced IT services. To meet the needs of all kinds of customers, you need a flexible licensing model in which you offer comprehensive, fully managed services as well as less extensive trial offerings. These offerings should be complemented by modular, à la carte services such as backup and security.

This approach lets you reach the broadest possible number of potential customers: from those who buy services only when something goes wrong (reactive customers) to     those who   outsource all   their IT functions (proactive/managed customers). It also gives you the opportunity to turn reactive customers who make up a majority of the marketplace into proactive customers by demonstrating over time how your services can address    more of their needs and support critical business functions.

2. A strategy for business planning and transformation: To make the transition to the MSP business model and go to market as quickly as possible, you’ll need a solid business planning and transformation strategy. There are some very specific questions related to the business, marketing, and sales strategy that you will need to address as an MSP. These include:

• Do I have clearly defined and productized service model?
• How profitable are my current contracts?
• How do I sell managed services to different types of customers (conversion vs. new acquisition)?
• What will make ad hoc customers convert to fixed-fee contracts?
• What processes do I need to ensure optimum business, marketing and sales efficiency?
• Do I have a structured approach to lead generation?

Turn to your experienced internal leaders, along with your managed services vendors and industry resources for guidance in addressing all of these important issues. And study other successful MSPs for insight into best practices.

3. Effective back-end network operations center (NOC) and helpdesk support services: Becoming an MSP means you’ll have to start addressing a much wider range of customer-premise equipment and service-related issues. To keep your customers satisfied, you’ll need a robust and efficient back-end network operations center (NOC) and helpdesk support services specifically engineered for managed services.

Whether you choose to outsource or internalize these functions, you’ll need a plan for addressing staffing considerations along with hardware, software, and operating system versions and configurations. You’ll also need to ensure you have the network and bandwidth requirements for remotely monitoring and managing your customers’ IT environments. Also put in place backup and recovery strategies to ensure business continuity for clients in the event of a service interruption or natural disaster.

4. Invest in the right tools: Last but not least, every MSP needs the right business tools to succeed. From remote monitoring and management (RMM), to IT service management, automated service delivery, remote control, and more, your MSP toolset can make or break your ability to effectively serve your clients and win new customers as well.

Your clients will only place their trust in you if they know you’ve made an investment in what is required to proactively address their ongoing IT requirements. And your business will only make a profit if you find a way to address those IT requirements efficiently and with consistent results through use of the right tools.

The transition to a managed services model doesn’t happen overnight. But it does happen and we can help get you there. Those who have made a name for themselves in the business have taken measured steps to tackle the challenges successfully. And they did not go it alone. Lean into your partners and set a path to evolve your business and become the IT service provider you were meant to be.