As cited in TSIA’s The State of Managed Services 2017 report, managed services now represent 22 percent of services revenues, and overall net-new revenue for managed services continues to grow at a healthy average of 42 percent. It’s evident that the demand for managed services shows no signs of slowing down. In fact, a survey by Clutch.co shows that 69 percent of small- to medium-sized businesses (SMBs) hire at least one type of IT service provider. So, what is fueling this impressive level of adoption? Why are so many business owners fans of your business model?
The following research illustrates the top reasons SMBs work with MSPs and IT solutions providers. As you build your 2018 sales strategy, pay attention to these main market drivers.
Why SMB Owners Demand Managed Services
When thinking about how best to position your managed IT services, it's worth considering what points make for the most compelling sell. Remember that while you may think SMBs should adopt your business model for one reason, they may have an entirely different set of priorities that you should appeal to first. So what should you lead with when marketing and selling to prospective clients?
According to Microsoft Store’s 2017 Small Business Insights Survey, nearly half of business owners surveyed identified their top challenge as staying ahead of rapid changes in technology in 2018. Additionally, 23 percent emphasized that budget constraints were top of mind in maintaining and growing their endeavors. Other top concerns for 2018 included enhancing security and having peace of mind over IT functions.
So, why exactly will businesses be seeking your managed services in 2018? Let’s break down these top four drivers.
1. Access to Newer Technologies
Often, the SMBs you aim to partner with have over-burdened IT staff with employees who may lack the skills and training necessary for certain tasks or can't handle the whole of the company's network on their own. In response, these companies recognize the value of working with an outside technical support team. Not only does IT outsourcing help with having an extra team of IT experts able to troubleshoot and remediate issues that arise, clients benefit from having access to the latest technology and business-grade solutions that maintain uptime and profitability, such as remote monitoring and management (RMM), backup and disaster recovery (BDR) and cloud computing.
Investing in the managed services business model tackles existing labor constraints and prevents internal IT departments from always having to play catch-up. By working with an MSP, business can gain access to business-grade technology, leverage tools that help increase the reliability of their IT infrastructure and also receive a virtual CIO (vCIO). The role of a vCIO is critical to business in 2018 as it helps in understanding and managing the evolving technology landscape—allowing your clients to better plan for long-term goals and scale their business.
2. ROI/Cost Savings
One of the biggest business values of managed services is greater cost savings. IT budgets consist of many items: hardware costs, software and network infrastructure costs and maintenance costs, to name a few. Also, the cost of labor is significant for any business, but especially for SMBs who rely on managed services providers. Maybe the company you want to work with needs to reduce the size of its IT department because the cost of paying their current staff is far too high. It could also be the case that the company has no dedicated IT team and employees are forced to compensate by performing technical tasks that are outside of their core area of expertise, slowing productivity and preventing the business from being able to grow. With the managed services business model, customers are able to more easily predict their IT costs on a month-to-month basis.
You can clearly break down the ROI of managed services for SMBs by explaining how your services will free up their staff’s time, allowing them to devote more to higher value projects they're properly equipped to manage while increasing overall productivity. Then, be sure to review these cost savings in your quarterly business reviews (QBRs). These meetings will help you prove that your services are indeed valuable and will help clients understand the part you play in helping them maximize employee productivity and satisfaction and reach their business goals.
3. Enhanced Security
Security is becoming a vexing issue for all small businesses. Laptops, desktops, smartphones, applications, tablets, servers, operating systems, browsers, wearable technology and the like all store and transmit data and thus require the strictest security measures. Prospective clients will turn to you out of fear of becoming the next headline in a high-profile data breach or data loss incident. In fact, 70 percent of the businesses surveyed in Microsoft Store’s Small Business Insights Survey suggested they would prefer to pay for support in matters of cybersecurity, rather than do it themselves.
Are you offering compliance as a service? If you're trying to convince a doctor's office to consider you, begin by stressing the importance of working with a HIPAA compliant IT solutions provider, one who understands HIPAA regulations and how to supplement them with additional managed security protocol, policies and procedures. Compliance is becoming even more of an outsourced IT adoption driver for SMB owners, especially with regard to PCI security standards, since many businesses offer e-commerce on their websites.
4. Peace of Mind
This is a benefit of managed IT services that we discuss a lot because it is so important. Your clients don't want to have to worry about their daily IT operations. They don't want to have to second-guess the reliability and speediness of their network connection. Similarly, they don't want to have to worry about what the state their IT environment will be when they commute in to work each morning. They choose to work with an MSP because you can provide 24x7x365 coverage.
Services like RMM and the security suite you offer detect potential disturbances and vulnerabilities, allowing you to resolve these problems before they develop into more critical threats. When you offer fully managed IT support, you can often troubleshoot and remediate glitches or bugs before the client is any the wiser. Again, they're paying you to worry about these things for them. Does a CEO have the time to verify that the backups his company has taken actually worked? We already know that data management is a top IT challenge for SMBs. In working with the right MSP, key executives can take advantage of outsourcing various tasks to a trusted partner—allowing employees to focus on other business functions, and gaining peace of mind.
By Gretchen Hoffman