The 7 Habits of Highly Effective Service Providers

Prasad Dronamraju

The global pandemic has put IT organizations in the spotlight, with greater pressure to deliver differentiated digital products and services. With enterprises expected to spend $2.8 trillion on digital transformation by 2025, IT teams need to fast-track critical priorities such as enabling new product offerings, delivering personalized customer experiences and supporting remote work.

Enterprise IT teams, in turn, are increasingly partnering with managed service providers (MSPs) to help their organizations thrive in the post-pandemic era. Service providers combine industry-specific knowledge with technology expertise to ensure the continuous availability of enterprise services while driving faster revenue growth and greater operational efficiencies for their customers.

7 Best-in-Class Habits for MSPs

Since MSPs need to handle both legacy and modern workloads across their customer base, they must have the right tools, processes and teams for delivering best-in-class managed services at the right value to customers. Here are seven habits modern service providers can adopt to ensure rapid customer acquisition and lasting client relationships:

1. Service excellence. As service providers scale, they need to make sure there is no compromise on the quality of services delivered. Inconsistent service delivery can hurt customer renewals and net promoter scores. MSPs should ensure service excellence by betting on artificial intelligence, hyperautomation and advanced analytics to deliver managed services at scale, reduce repetitive work and enable data-driven decision making. Service excellence will help MSPs lower client churn, increase retention rates and expand the share of wallet across their customers.
2. Skill maturity. With the adoption of agile development and DevOps practices, enterprises are increasingly able to quickly build and upgrade their applications. MSPs should take an aggressive approach to help their employees upskill and become more productive to keep up with customer expectations. Service providers should use microlearning training that combines topical information with short-term activities for faster acquisition and retention of knowledge. They should also fund professional boot camps and certifications in areas such as cloud, containers, DevOps and security so that employees can master new technologies and be seen as trusted customer advisers.
3. Platform approach. A recent survey by research firm EMA found that 64% of enterprises use between four to 10 distinct monitoring tools. Given this tool sprawl, it is the service provider’s responsibility to deliver a centralized platform that can either integrate or sunset point tools and offer unified visibility and control across hybrid environments. In this way, MSPs can transform swivel-chair IT operations to more proactive operations with the ability to monitor and optimize distributed workloads with a platform-centric approach.
4. Recurring revenue models. Service providers used to work on break-fix contracts which required charging for ad hoc managed services. Enterprises are increasingly shifting from reactive support to proactive managed services. Outcome-based managed services result in the long-term alignment of interests between clients and providers, ensuring resilient infrastructure and peace of mind for customers. MSPs that embrace recurring revenue models can shift from project-based services to long-term engagements that deliver greater financial predictability, faster revenue growth and higher customer satisfaction.
5. Branding. Investing in marketing can help customers understand a provider’s solution offerings and the specific expertise that they can leverage. MSPs that provide the right level of awareness around their service offerings and educate customers around the differentiated capabilities and business outcomes that they can drive will ensure long-term relationships that deliver sustained growth and overall profitability.
6. Cloud-ready. Customers are looking to work with service providers that can accelerate cloud migration initiatives using pre-configured assessments, packaged tools and standardized best practices. This can help organizations drive faster innovation, reduce technical debt and embrace disruptive business models with cloud migration and application modernization initiatives.
7. Ease of doing business. Organizations are tired of dealing with multiple service providers, software vendors and equipment manufacturers and the complexity that creates in managing, licensing, pricing and contractual obligations. Service providers that can work with their customers to create transparent contracts across different vendors that are tailored to their needs will experience greater traction.

Managed service providers need to be more agile, flexible and service-oriented than the IT organizations they work with. Service providers that adopt these seven habits can help their clients innovate and meet business objectives at breakneck speeds. As a result, highly effective service providers will witness significant growth, competitive differentiation and stickier engagements in a hypercompetitive market.

Prasad Dronamraju is a solution architect and technical product marketing manager at OpsRamp. You may follow him at LinkedIn or @OpsRamp on Twitter.