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5 Ways to Improve Your MSP Service Level Agreement (SLA)

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5 Ways to Improve Your MSP Service Level Agreements (SLAs)

SLAs are the foundation of your MSP business. They are essential to building strong client relationships and must be clear, reasonable and well-constructed.

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7 Habits of Highly Successful IT Service Providers: Habit #7

Posted March 8, 2018by Joseph Tavano


MSPs have plenty of options when selecting their technology partners, so what is the criteria that matters most when choosing the best partner for your business? In this seventh and final installment of the 7 Habits of Highly Successful IT Service Providers, you’ll learn why a low total cost of ownership for your technology solution over time is the best way to maximize margins and optimize productivity.

At Navigate 2017, Continuum CEO Michael George outlined seven habits that the most profitable, growth-oriented MSPs in the industry all seem to have in common. Designed as actionable skills you can put to use immediately in your business, these seven habits of highly successful IT service providers are proven building blocks for success in a modern managed IT services business. Each of the seven posts in this special series explores one habit in greater detail.

Habit #7: Choosing Technology Partners Based on TCO—Not Surface Price

As the diversity and complexity of small business IT has changed over the last several years, ITSPs have been forced to employ a variety of tools and technologies to support the entire service delivery chain. The days of depending on one just one technology (or one technology partner) are long gone, and many providers today find themselves with a series of disparate tools and vendors.

An Expanding Technology Stack = Expanding Labor Costs

It’s very difficult to manage all of these relationships at once, and it’s very inefficient for your technical teams to learn how to use all of these different tools effectively to support the various environments they are working in.

Just look at your cost of goods sold (COGS) on your profit and loss statements. Labor is by far your greatest expense, as payroll should account for 60–70 percent of your COGS. Optimizing and reducing your labor costs should be your principal objectives, along with increasing the speed and the quality of services you deliver. These objectives must be factored into your decisions around platforms and tools.

Why Total Cost of Ownership Matters

The actual cost of a tool has become far less important than the total cost of ownership (TCO) associated with that tool. TCO includes things like training your team to become efficient with it, the need to manage multiple dashboards and glean insights from various screens, and more. The time it takes to perform and execute tasks correctly using the tool—multiplied by the number of tasks that can be successfully executed in a given timeframe—is all a part of the total productivity it brings to your business. If that tool is hampering your productivity, then labor costs go up in the form of additional hours spent managing the tool, additional hires needed to manage the it, etc. These hidden costs of owning an inefficient tool drive up the TCO far past its initial price or monthly service fee, and affects your COGS significantly.

Seek out technology partners that offer solutions designed to keep TCO low; these are the partners that aren’t interested in selling you a product off the shelf—they are invested in the profitability and success of your business!

Optimize Your Partnerships

Your team will be most efficient when you’re working with the fewest number of technology partners as possible, and by having as much information as possible flowing into a single portal. By focusing on forming two or three critical technology partnerships, you’re not forced to spend your time—and the time of your employees—managing each customer across an overly broad and cumbersome set of technologies and vendors. Maintaining a limited number of partnerships also means you’ll have data that’s more streamlined, easier billing processes and the opportunity to align more closely with your provider, which can help you reduce inefficiencies, facilitate new product rollouts, and be more profitable overall.


Looking beyond price and measuring true TCO is a critical driver of profitability and growth in this market. Just as selling on value is crucially important when talking to an SMB, it is equally as true when evaluating your technology vendors and providers. The value of any given tool corresponds directly to its TCO—and will be the measuring stick of your growth velocity. If you choose the right platform that offers the best margins and a low total cost of ownership, the opportunity for rapid, profitable and steady growth will be tremendous.


Want a recap of all 7 habits? Download our eBook today:

7 Habits Successful MSPs eBook

Joseph Tavano is Senior Content Marketing Manager at Continuum, with more than 14 years of experience in content creation, content marketing, event marketing, marketing communications, demand generation and editorial across a range of industries. He is the author of several eBooks, blog posts, thought-leadership articles and other marketing and product collateral that enable Continuum partners and IT service providers in the channel to make their businesses stronger and grow their profits. In 2016, he launched the Continuum Podcast Network, which publishes multiple shows every week and reaches tens of thousands of IT professionals every year. A native of Boston, he holds bachelors in English and History from Suffolk University and resides in Salem, Massachusetts.

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