MSP Insights: 3 Keys to Scaling Your MSP Profitably
A proven formula for success
Why do some MSP IT operations succeed where others fail? The formula for success involves standardization, best practices, and automation.
Let's start with a simple example - internal company IT departments that help address the goals for a single business. These operations seek to build a solid IT team by balancing technology and business expertise to drive better decision-making. That's why most in-house IT teams are heavily focused on finding the right talent.
Unfortunately, by prioritizing talent over process and maturity - the traditional IT team heads down a path of inefficiency. This approach ultimately leads to adding a team member and a tool to solve every new challenge.
In contrast, IT Managed Service Providers (MSPs) present a straightforward solution to businesses by providing a complete IT service operation at a flat monthly fee. MSPs seek alignment with the customer’s strategic goals by deploying, embedding, and managing technology that catapults the customer forward.
MSPs also recruit for the right talent, but focus on process and maturity that allows them to rely less on individual contributors.
It's no easy task to develop and improve IT process and maturity, especially when an MSP’s goal is to grow profitably from 10 customers to 50 to 100s with each customer bringing a new set of complexities and risks to manage.
So what techniques have the larger and more profitable MSPs learned that allows them to achieve success where others fail?
They've learned, sometimes the hard way, that profitable growth across a larger customer base demands three key concepts:
- Technology & Process Convergence
- Configuration Best Practices
- Advanced Automation
3 Keys to Managing IT Profitably at Scale
Technology and Process Convergence
The sheer quantity of unique technologies in IT create complexity. Managing a large number and variety of firewalls, switches, servers, SSL certificates, email and cloud services is challenging for any IT organization. Reducing the number of one-off technologies eliminates complexity to improve profitability. As the team members in an MSP achieve greater depth in specific technologies, they'll begin to standardize processes.
GOAL: Standardize on a technology stack and associated processes.
Configuration Best Practices
Strong MSPs have a “golden blueprint” configuration for each technology that follows best practices leading to higher resiliency, integrity, and security.
GOAL: Ensure all customer environments are configured in this best practice state.
Committing to automation allows MSP teams to achieve highly profitable staff to customer ratios. This begins with Professional Services Automation (PSA) and Remote Monitoring and Management (RMM) platforms - ConnectWise, Autotask, or ServiceNow. The most advanced MSPs see all repetitive tasks as areas for automation. The more advanced the task, the larger the impact on profitability.
GOAL: Automate and eliminate all manual tasks from the day-to-day management of IT.
These three keys to managing IT at scale act as the blueprint for a profitable MSP. We will explore each of these further to provide a framework for success!