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Effectively Growing Your MSP Based on Fact-Based Decisions

April 04, 2013  By Richard Tubb

During my work with IT Solution Providers (ITSPs) and Managed Service Providers (MSPs) I sometimes observe that the decisions on which direction these businesses should grow into are more often than not made on intuition rather than metrics.

As the former owner of an MSP myself, I used to be as guilty of this mistake as anyone. As long as the business was showing a profit at the end of the quarter – it was considered a success.

But how much more successful might your business be if you are not basing your growth plans on your yearly performance, but on live, real-time data? Doing this is an important new tool for MSPs – and it is known as Service Intelligence.

Fact-based Decisions

Service Intelligence means that you can make fact-based decisions for your IT business on a real-time basis.

By providing you with visibility into your business – you can not only gain more control over your business on a day-to-day basis, but you can understand what drives it and how you can change your business to meet your goals.

One example of how Service Intelligence can help your MSP business is around pricing.

Managing MSP pricing

Do you struggle with pricing your MSP services? You’re not alone – most MSPs that I speak to base their pricing either on what they think their clients will pay, or what the rest of the market is doing.

This can create a problem for your business. Each of your clients is different. The pricing that works for one client may not work for another.

For instance, you start working with a recruitment company. You charge them the same MSP fee as other clients – but you are pretty positive that they are eating up more of your time and energy than any other clients. But how can you be sure?

With a Service Intelligence platform, you can measure the time your engineers are spending working for a client against that client’s contract. Doing so allows you to see the profitability of that client not on an annual basis, but a month-to-month basis. If that client isn’t profitable, you can either renegotiate their MSP pricing, or investigate how you can lower your support costs.

Service Intelligence can help you lower your support costs too. By analysing both the service history for the client and the asset, inventory and configuration details for that client – it may be that you highlight an aging server that is eating up a lot of your engineer’s time. You can propose a replacement server to the client which not only creates a project opportunity for you, but will reduce your cost of supporting the client going forwards – and making the contract profitable again.

Conclusion

There is an old adage – “What can be measured, can be managed”.

Are you measuring and managing your MSP based on unreliable or dated metrics? Or could you benefit from making fact-based decisions based on real-time Service Intelligence?

Richard Tubb
The former owner of on award winning IT MAnaged Service Provider, Richard Tubb now provides expert advice to help IT companies who want to grow.

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