Scaling new heights
In the third and final part in his series, Predatar’s Alistair Mackenzie considers the top four technological challenges businesses are likely to face when they’re looking to scale their recurring revenue model
With the increasing drive towards service-led, outcome-based delivery and revenue models, the risk of owning and operating technology is shifting from the consumer to the supplier.
Reducing this risk and fast-tracking evolution to scalable, profitable, service-led technology delivery not only requires the right map and guide, as discussed in the first and second part of this series, it requires a secret weapon.
Technology that enables businesses to be more competitive and deliver customer delight. Technology, however, can have its own unique set of challenges that can hamper the ability of managed service providers (MSPs) to scale quickly and efficiently. There are four top considerations to keep in mind.
Segmenting data
How do you ensure your customers have access to everything without being able to view another customer’s data?
As an MSP, acting as an agent or intermediary and potentially servicing multiple, different customers, a unique set of problems can present themselves – particularly around segmentation.
If you’re a service provider that owns a server, for example, and then rents it out to multiple customers, there is a strong chance of cross-pollination.
This is one of the first principles MSPs must consider as part of their technology solution. Multi-tenancy can reduce the overall cost for each individual customer, but equally there are risks and MSPs must ensure there is robust segmentation.
Fear of missing out
How do you accurately monitor the use of labour, assets and subscriptions without systems and automation?
In the value-added reseller (VAR) world, you tend to sell upfront for a known quantity of software, hardware or services. You agree on the solution package with the customer, you put a price on it, the customer checks it and you carry out the transaction – simple.
When you’re delivering technology as a service, the usage of a particular asset or resource that you’re providing on behalf of the customer could be changing on a yearly, monthly, weekly, daily or even hourly basis.
Keeping track of this type of usage is almost impossible without robust systems, tools and automation that can provide real-time data, as well as historical information if a customer decides to query something. Or, maybe you have an army of people whose job it is to constantly review, monitor and deliver reports – but even then, how scalable is this option?
Avoiding productivity bottlenecks
Managing more than 200 customers simultaneously can seem daunting, but this is the reality of many successful MSPs today. To ensure you remain profitable as you scale, it’s important to recognise what structure you need to avoid productivity bottlenecks.
The only way MSP businesses can achieve the economies of scale is to consider how they can provide technology as a service cheaper than the customer delivering it themselves.
If an MSP has one technical engineer, for example, that engineer can be spread across multiple customers. If you’re having to employ an engineer for every customer that you onboard, you’re essentially not going to be any cheaper and the economies of scale that you need to attract the customer in the first place will never be realised.
Automated technologies can build operational workflows to help remove the mundane, manual yet essential tasks an MSP must perform on a regular basis such as system checks or network upgrades. In turn, your team can then focus on other tasks that are centred around delivering the high quality of service and value add that customers are seeking.
Don’t leave customers feeling underwhelmed
Recognising that the customer must be at the heart of everything it does, MSPs are laser focused on customer success and delight. Failure to deliver excellent customer service will inevitably reduce trust and brand loyalty. But how can technology help you to improve customer service?
Let’s consider pizzas for a moment. For anyone who has ordered online through Domino’s, for example, they will tell you that their experience is seamless. Not only is it quick, Domino’s has used technology to keep its customers completely in the loop of its internal processes – that is, a virtual window into its kitchen and the cooking cycle of their pizza. This provides complete transparency and instils confidence that Domino’s will deliver.
MSPs that can provide a similar level of transparency will undoubtedly be the ones that thrive and prosper. The immediacy of data, stats and reports aligned with the agreed key performance indicators (KPIs) through technology will build trust and confidence with customers.
Over time, utilising the available data and insights across multiple customers, MSPs can also start to predict behavioural patterns and, in turn, provide customers with insights and recommendations based on knowledge they may not necessarily have. This will serve to enhance the long-term customer relationship and place the MSP favourably as a true, trusted advisor.
Read more about MSPs
- MSP software comes in various forms and combinations. Some larger MSPs are adopting ServiceNow and LogicMonitor to automate core business functions.
- The developing MSP business model is showing some of the characteristics of an ancient agricultural technique. Find out how service providers are cultivating business.
