In the early days of Managed Service Providers, a standard operating model was followed. They could all act and look the same because everything was physical - you needed to visit your customers for most fixes, so competition was limited to local providers.
Indeed some providers actually trained MSPs in how to operate a profitable business, using standard prices, and standard product offerings. Plus of course their software; smart.
These early break/fix providers still exist, but increasingly, we note that the ones that are growing are anything but standard. To grow they need to differentiate their offering and that’s where the older PSA software can become a hindrance, not an advantage.
How does an MSP differentiate their offering?
There are many subtle differences, but the major trends being driven by the cloud are:
- Price differentiation; no longer do these MSPs have a single standard rate - they can offer different rates for different services and different SLA performance.
- A la carte service definitions; no more standard operating models, the MSPs that are growing are doing so because they are reactive to their customer’s specific needs and are able to offer a menu of more bespoke service offerings.
- Vertical specialisations; what we also see is increasing specialisation in customer verticals. Whether these are dental practices, lawyers, schools, financial services, the trend is the same. These modern specialists are able to package workplaces including recommending and reselling the right software, the so-called virtual CIO activity. This last one is more of a challenge for PSA tools as the software is not necessarily a monthly billing item, introducing balance sheet accounting to their previously simple management accounting models.
- Extended hours; also being added now are extended hours support options, through outsourced response services, again increasing operating model complexity.
- Mergers; existing MSPs are merging to create greater geographic coverage. Vertical specialisations need to hunt in a larger region. Freed from the need to be local, as the service delivery model becomes increasingly virtualised, this is a great new opportunity. Expect multi-currency to be more of a factor here, starting in Europe.
- Integrated CRM; however, the consequences of running a geographically diverse business, one relying on digital marketing and social media, is the need to have a solid integrated CRM area, not a common option in older PSA tools. The companies that get the marketing right will swiftly out-perform the rest.
- New billing methods; lastly, billing via timesheet bookings is reducing in importance. The more sophisticated the RMM tools get, the more automation on the fix side will drive economies and AYCE device-based billing will emerge as the winning strategy. Managing this process over 1000s of devices automatically will become an essential feature in new PSAs.
So, the landscape is changing rapidly and differentiated, virtualised and geographically diverse MSPs will grow while localised break/fix companies decline. The PSA tool you choose can be either an enabler or a hindrance in addressing these trends.
Make sure it can future-proof your business when you decide to update your existing platform.