What does it mean to be a successful MSP? In the current landscape, there’s really no final destination for this. The MSP business as a whole is in a constant state of change – of evolution. What once made an MSP profitable, is no longer sufficient. Rather than reaching a final destination, success for MSPs is now characterized by their ability to keep up with the change, or better yet, stay ahead of it.
So what can you do to ensure your MSP is in a good position to adapt to these changes? We put together some thoughts.
How is the industry changing?
The industry is simultaneously growing and consolidating. Established players are seeking growth by acquisition, which has created a white-hot M&A market. But barriers to new entry remain pretty low, so there’s always somebody leaving their company to go solo with their own shop. The result? Competition that is becoming increasingly intense.
The other major trend we have to talk about is maturation. Break-fix shops and VARs are adding managed services, which the IT Glue Global MSP Benchmark Report highlights as correlating with profitability and revenue growth. Inchoate MSPs are professionalizing their operations with better software, professional documentation, and attention to process.
Intense competition and more mature competitors? That’s a tougher environment for anybody who is not ready to compete. Here’s some of what you’ll need to start thinking about.
Educate your employees
You can’t grow your business if your employees don’t have the education or the willingness to step into new realms and embrace new trends. Say you’re considering offering HIPAA as a service. Your employees are going to need to have a rock-solid understanding of what HIPAA requires and what your clients need. They’re going to need education.
Part of this might come down to hiring expertise. If you’re looking to leverage more automation, you’ll have to weigh the costs of potentially training employees to use an API, or you might look to bring in talent that can kick-start this adoption.
Create a business worth working for
The talent shortage within the IT industry is no secret. So if you’ve got talent in your MSP, make sure you’re creating the kind of company culture that encourages employees to stick around. Plus, you want the kind of environment that’s going to attract new talent as well.
Optimize your tech stack
You need technology that’s going to grow with you, not hinder your growth. If you have to switch an app or platform you’re using in order to grow or embrace something new, it’s not the right app. The more you equip your business with technology that is flexible enough to develop alongside you, the more capable you are of achieving these goals. Keep your eye out for platforms that are staying up to date with feature releases and integrations. If a vendor doesn’t regularly release new features and updates, and doesn’t present some sort of product roadmap regularly, those are red flags that they might not be able to keep up with the pace of change in the industry.
Solidify great processes
This is your foundation. The basis of achieving any kind of growth in your business stems from the processes you have in place at the most basic level. You can build on your processes, and you can develop new ones, but if you’re trying to step into new territory and relying on a shaky foundation of weak processes, you’re not going to get very far. At least, not reliably.
Efficiency is what gives you license to grow your business and find new ways of providing value for your customers. Making the move from MSP to MSSP, or adding anything new to your service offering for that matter, isn’t all the sudden going to make you a leaner or smarter MSP. In fact, it’ll probably lead to the opposite. But having the right processes in place will give you the structure and efficiency you need in order to grow, to adopt new service offerings, and take on new opportunities.
So yes, the MSP industry is changing, and it is your job to keep up with that change in order to remain successful. But in order to be fully ready to take on any changes, you need to ensure that you have a solid foundation to go off of.