Unlocking efficiency: Key insights for modern MSPs

Illustration: Suman Nissi

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In an engaging panel discussion at the SuperSummit Virtual ‘24, industry experts Juan Fernandez, Global Channel Chief at SuperOps, Carolyn April the Vice President of Industry Research at CompTIA, and Erick Simpson, the CEO of MSP Mastered, delved into the topic of efficiency for modern MSPs. The session shed light on the challenges and changes in the managed services realm, emphasizing the need for MSPs to adapt their business models and optimize processes to meet the evolving needs of their customers.

Transitioning to a recurring revenue model

Carolyn highlighted one of the biggest challenges faced by MSPs - the shift from a reseller model to a recurring revenue model. This transition necessitates a different approach to conducting business and the implementation of repeatable processes. Carolyn emphasized the importance of measuring outcomes and using metrics to assess performance accurately. MSPs must redefine their business models and incorporate new services to stay ahead in a rapidly changing landscape.

KPIs for business efficiency

Efficiency lies at the core of every successful MSP, and tracking key performance indicators is crucial. Erick urged MSPs to analyze KPIs, particularly those related to customer profitability and resource consumption. Categorizing clients into different tiers, such as A, B, and C customers, can help evaluate profitability. Identifying and releasing unprofitable C customers allows MSPs to focus resources on more profitable ventures.

Carolyn stressed the significance of measuring not only customer satisfaction but also profitability and time spent with customers. MSPs should track core performance metrics, continuous improvement metrics, and security and compliance KPIs. Furthermore, efficient vendor management and measuring time to profitability with vendors were highlighted as essential practices.

Juan emphasized the importance of time to revenue and time to profitability when exploring business opportunities. Breaking down costs and assessing the profitability of individual services ensures a sustainable business model. Additionally, efficient solution scoping, change management, and effective service desk services were underscored as key areas for optimization.

Leveraging AI for efficiency

The panel also touched on the potential of artificial intelligence (AI) in revolutionizing MSP operations. AI-powered automation enables MSPs to streamline processes, freeing up technicians to focus on higher-level strategic tasks. However, Erick emphasized having a well-organized service desk before implementing AI. Identifying and categorizing ticket types and optimizing ticket resolution at different support levels leads to efficient ticket management. MSPs should strive to resolve 97% of tickets at level 1, significantly reducing escalations to higher levels.

Empowering the modern team for efficiency

The discussion steered towards crucial investment in people. Empowering the modern team and providing them with opportunities to experiment and research new technologies require leadership and a willingness to invest in potentially non-profitable endeavors. High profitability is the backbone of supporting research and development efforts and attracting top talent. Additionally, weeding out less profitable clients and adjusting prices were suggested to maintain profitability.

Selling the value and setting a standard

To ensure continued success, MSPs must understand and promote the value perceived by their clients. Erick advised MSPs to gather client feedback through surveys to identify key value propositions. Consistently promoting this value throughout the organization ensures a cohesive understanding among staff members. Juan and Carolyn emphasized the importance of focusing on quality over quantity, increasing profitability, attracting top talent, and setting a standard for the industry. 

The panel discussion provided essential insights for MSPs on maximizing efficiency. Key areas for improvement highlighted included transitioning to a recurring revenue model, tracking critical KPIs, leveraging AI, empowering the modern team, and understanding the value proposition. By embracing these concepts and implementing the suggested strategies, MSPs can optimize their operations, achieve sustainable growth, and meet the ever-evolving needs of their clients.

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