This material was originally presented at Accelerate 2020 by Neural Impact ↗
The COVID-19 pandemic has altered how every business needs to operate. That includes managed service providers (MSPs). MSPs need to adapt not only to the turbulent market today, but also to the post-pandemic economy that will be here soon.
MSPs, service integrators and all other IT service providers need to understand how demand for their services will continue to shift. They will need to figure out how to position themselves to take advantage of these new demands. And they will need to present the best possible service offerings for the coming economy.
COVID-19 changed demand drivers for managed services
The key to figuring out what new managed services to offer is first understanding permanent changes the COVID-19 pandemic will force (or perhaps already has forced) on your clients. Two such changes include a lasting shift to remote work and an increased reliance on workplace technology.
Work from home is here to stay
The sudden shift to remote working has changed practically every clients’ IT service needs. When lockdowns went into effect, they needed to develop whole new business processes; in particular, remote collaboration processes.
There are also indications that work from home programs have proven so successful that many businesses will stick with them to some degree post-pandemic. Sixty-seven percent of all organizations in a recent survey expected to permanently retain their remote work programs ↗. That means providers must plan to offer managed services to accommodate this new mode of working for the long term.
IT will become a strategic asset for SMBs
IT services have evolved to the point where many SMBs recognize that they too can treat them as more than just cost centers. Now, like enterprises, SMBs can leverage managed services as strategic assets that drive their businesses forward.
In particular, SMBs will look for three things:
- Remote Services: to keep work-from-home collaboration sustainable.
- Security: made necessary by the massive increase in remote connections and corporate assets now running on home networks.
- Increased Productivity: to make up for fallen lockdown revenues and to dig out of depressed markets.
MSPs will need to craft managed service offerings that deliver all three!
MSPs need to reimagine two key operations
To take advantage of this evolving post-pandemic market, MSPs need to reimagine how they perform two key business operations: offer development and managed service delivery.
Customers respond to simplicity. They also increasingly want concrete service offerings. Don’t wait for customer to define what they want! It may seem like good customer service to create customized quotes, but customers often don’t know exactly what they’re looking for.
Instead, be proactive and show them what they need. Defining service packages therefore becomes part of your value.
Position yourself as an industry authority who knows what specific services are important and package them together. For example, if you’re prospecting for SMBs, offer a specific bundle to get them up and running faster with an end-to-end cloud suite.
Service delivery is how you bring your offerings to market. From an MSP’s perspective this process breaks down into three phases:
- Sales Cycle: consulting on service needs, then transitioning into the sale.
- Project Services: designing, implementing and integrating specific services.
- Managed Services: maintaining the service, managing it and supporting users.
This three-phase model is a useful way to think about it, to a point. Because this isn’t actually how customers think about it—we’ll get to that.
Transform managed services delivery into a proactive operation
We need to look at service delivery from a customer’s perspective. Customers do not care about process. MSPs may need to, but customers care about outcomes.
You need to restructure your service delivery process to give the customer more of what they actually want.
New sales cycle
If customers aren’t going to know what they want in a new economy, consulting services become more important. Show clients what they need. To do that, however, you first have to get your foot in the door.
The most useful way to establish a business relationship is with a wedge offering. A wedge offering ↗ “drives a wedge” between you and the competition, showing new customers exactly why you’re the superior choice.
If you don’t have one already, developing a wedge offering is the easiest place to begin adapting your managed services delivery process. It needs to be something stand-alone that makes it easy for clients to try you out, not a full stack solution. For example, security assessments—Sherweb’s Security Foundation Assessment ↗, for example—can make good wedge offerings for MSPs.
New project services
Again, think about what the customer wants. Customers aren’t buying configurations or implementations. In their minds what they’re buying from you is a go live date.
Project services must transform into acceleration services that get customers to their go live dates faster. When you focus on acceleration, the emphasis shifts more to integration and service connections. Nerdio and other independent software vendor (ISV) solutions are important tools here.
New managed services
Today, most ongoing managed services, like support, are reactive. Adoption and consumption services address customer needs that are less often met.
Clients pay good money to get new projects live. Now they need to actually get staff to use them to see any value. Learning solutions like QuickHelp are great user- and change-adoption add-ons you can bring to clients who want to get their staff engaged with new cloud platforms faster.
So how do you update your offerings and delivery process? Start by developing a business plan for your transformation.
Business planning to future-proof your MSP business
A business plan isn’t just for launching a new company. Anytime you need to reinvent your service offerings your MSP business will benefit from taking the time to develop a new plan. Documenting a new business plan is also important if you need to secure external capital funding or take advantage of acquisition opportunities, something 52% of all MSPs ↗ think they’ll need in order to thrive going forward.
Define business objectives
Bring together the key decision makers in your business to capture and organize your goals for the coming year. You need to structure these goals in a way that makes progress measurable. Then, share your vision with your business partners, potential investors and the rest of your staff.
Identify customer demand drivers
Remember, customers don’t really care about the MSP delivery process. What problems are your customers actually trying to solve? Your new, packaged offerings will need to be structured around those demands.
SMBs, mid-level businesses and enterprises are all going to have different concerns. Different verticals are going to have different concerns too. For example, healthcare is not going to care about the same issues as retail.
Set strategic initiatives
Once you know where you want your business to go and what your customers are looking in this new economy, you can begin setting specific initiatives for the coming year. You can pick just one thing to develop, like creating a new wedge offering, or you could set more, depending on your resources.
Once your initiatives are set, you next must determine how to allocate your resources. This could mean financial investments, but also staff assignments and available work hours.
Your new initiatives need to be managed like projects. They must have defined objectives, a due date, a set business sponsor, a budget and maybe capital.
Also like a project, you need to build in periodic reviews of your initiatives. Generate a feedback loop that will help you reallocate resources on the fly.
Sherweb is here to help
Sometimes new strategic initiatives are going to fall outside of your comfort zone. That’s not a bad thing! If you’re not pushing your business out of its comfort zone, you may not be pushing it forward.
Sherweb has years of experience launching new service offerings and strategic MSP initiatives. We want you to thrive in the post-pandemic economy. We’re ready to be the cloud service partner who helps you achieve your objectives.
Looking for more resources to grow your MSP business? Sign up for our free MBA for MSPs ↗.