Posted 22 September, 2016 • by Craig Sharp
Primarily focused on growing technical skills and expertise, IT professionals tend to be a very particular bunch. Technical ability is at the heart of their world and, understandably, many take pride in being able to solve pretty much any problem. After 20+ years of providing IT services to UK SMEs, I've experienced this firsthand. I know that within my own MSP business our technical team tends to focus too much on the details and not enough on the business dynamic. In other words, they may waste time working through low-impact technical changes and in effect, reduce bandwidth for IT services that drive revenue.
If you want to grow your MSP business, then you need to strike a balance between technology and business strategy. Yes, your MSP business is there to solve clients' problems. That's how you earn revenue. Still, you can't afford to neglect other revenue-generating initiatives, like upsells, cross-sells and any program that grows client stickiness. But how can you free up company time and resources to accommodate these demands?
Here's the cold hard truth – maintaining an existing IT system is no longer enough for an MSP business to grow. You have to adopt more of a strategic business focus and offload some of the more time-consuming, low-value tasks and responsibilities to be managed externally by a trusted partner.
In a way you already have a network operations centre (NOC) in-house, a series of technicians working to ensure that systems over which you have responsibility are working at their optimal level. Time is taken to monitor, either manually or via remote monitoring and management (RMM) tools, key operations like connectivity, backup, event management, etc. This is exactly what most MSPs want to offer – a dedicated team focused on protecting clients’ IT systems, completing patch updates, monitoring virus status, managing support tickets and maximising uptime for clients.
The problem is that maintaining an in-house NOC reduces profitability and is hard to scale. You need to be able to grow your MSP business by adding more clients. But if you tried to accomplish this with internal staff alone, you’d need to increase the size of your internal NOC team to support these new accounts, as well as existing ones. Can you afford to hire more staff? That would mean paying for more employee salaries and benefits and maybe even more office space to house your expanded staff. This is neither a sustainable nor cost-efficient approach, and your margins will suffer as a result.
Luckily, there is a better way to monitor client operations and deliver stellar service. Rather than waste your technicians’ time and skills, redeploy that talent elsewhere! By leveraging an outsourced support solution, you can more effectively scale your MSP business, grow your bottom line and create more rewarding work for staff without having to strain resources to cover episodic IT demands.
An Important Note about Leveraging a NOC as a Silent Partnership:
You may be familiar with the benefits of leveraging a network operations centre, but this is certainly not a term you should use with your clients. It sounds technical, it is technical and they don’t need to know about it. I take a Wizard of Oz approach to IT. By this, I mean that we shield the main activities and inner workings of our solution behind a curtain and never let clients see behind that curtain. It’s not necessary and adds no value. All a client needs to understand is that their IT is working, downtime is minimal and productivity is high.
Making a change in your IT business will require you to be bold, but for the good of your P&L, you have to step up. No matter how you look at it, the ROI of an outsourced NOC solution is proven time after time. If you're questioning whether to make the switch to this new business model, you may be like many MSPs who have the following fears:
Fear of the Unknown
Perhaps you're afraid to outsource your IT support because you prefer to have sole technical control over all client dealings. After all, maintaining consistent client satisfaction is central to your success as an MSP. It is a commonly held myth that IT outsourcing leads to poor customer service, however. Let's examine the top two complaints you receive from clients:
In reality, you run the risk of encountering both of these problems no matter what. The reduced bandwidth that results from managing your own in-house operations threatens your ability to provide speedy and efficient service delivery. If you simply don't have enough staff to support all of your clients' demands, wait times will climb toward relationship-harming levels, and you may lose a client for good. Consider also that your existing staff may not be qualified to take on all requests, leaving certain issues unresolved. When you work with a NOC like Continuum's, however, you'll gain access to their team of 700 technicians, who work 24x7x365 behind-the-scenes, so that you can scale your business. Through this silent partnership built on trust, you'll receive a combination of years of experience in closing millions of tickets, a range of numerous certifications, and state-of-the-art infrastructure.
Fear of Costs
Perhaps you worry that the cost of outsourcing to a NOC will be too high and that you can “do it cheaper internally.” Like the stigma of poor customer service, this is also a myth. Why? Because reducing your overall IT budget is still the number one reason for considering outsourcing. It all comes down to reducing the total cost of delivery of your services and more specifically, the cost of labour. Do you experience high employee turnover, for instance? Maybe you're finding that the younger workforce tends to want to leave after two years with a given company, or the demands of maintaining an internal NOC are too significant for overworked employees to endure. You may be tempted to replace or hire additional technicians, but the time and money spent finding, recruiting, hiring and training new employees are too high to be sustainable. Additionally, you can't predict employee churn. You need a more scalable solution that won't impact service delivery when staff or client base changes occur. Outsourced NOC solutions like Continuum's are available for a fixed monthly fee, which means you can lower hiring costs as you continue to acquire more customers. With your techs able to take on more, your business can scale at a faster rate, with less overhead and steady, predictable profit margins.
Fear of Staff Reaction
This latter point is the biggest hurdle to overcome. There will be concerns from technical staff that they’ll become irrelevant, be fired or be reduced to completing minor tasks. Consider a typical technician that's responsible for tasks like patch management, uptime service level agreements (SLAs) and ticket resolution. Since a NOC can absorb these more tedious requests, your technical support staff may feel threatened by the outsourced opportunity. This is why communication is everything when attempting to gain organisational buy-in. When positioning the advantage of NOC services, share what's in it for them. Explain that outsourcing enables employees to add more value to the company, achieve the coveted work/life balance, obtain more certifications and expedite their career development. Many MSPs have had success repurposing technicians into solutions engineers or NOC managers, for example. I spoke with a Continuum partner recently during an event in London and he said his senior support engineer had commented recently that “having Continuum’s NOC is like having IT support for our support team.” When positioning an outsourced NOC, stress that these new technicians will act as an extension to your existing support team, providing in-house staff greater work freedoms and control.
Completing all technical work inhouse may seem like the best and only way when you’re a smaller MSP, but this model will not scale. You can’t add more clients quickly if you are having to find new staff to manage the added workload. If you outsource your NOC, however, you can reduce labour costs and increase your capacity, all while creating a more enriching, enticing and rewarding work environment that helps you retain valuable IT talent, support 24x7x365 client demands, strengthen existing relationships and grow profitability.
Craig Sharp is the founder of MSP Wingman based in Birmingham, UK. Retaining a stake in local MSP Abussi Ltd, Craig has a proven record in managing, growing and transitioning an MSP from break-fix, through VAR and into a true Managed Services Provider over the past 20+ years. Craig believes passionately that the key to IT / MSP business success is reducing the tech, and building business focused relationships. Additionally, Craig helps smaller IT / MSP businesses grow through targeted and innovative marketing approaches. Most importantly Craig has a passion to educate and inform. Follow Craig on Twitter @MSPWingman or #MSPWingman.