Continuous Improvement: The Key to Managed Services Success
Making a real transition to a managed services model is just plain hard work. It’s easy to recognize that recurring revenue is a good thing. It’s quite another to assemble a set of valuable services that are real, stable and demonstrable to the customer. It’s one thing to say, “This is a completely different business model than break-fix”; but quite another to make it work. For those who succeed, the rewards are great. Revenue and margin growth are generally confidential, but buy-outs and regional growth are more visible.
For the last three years, I’ve had the pleasure of leading an Intel “pilot” program in the MSP channel (more on that in a bit). Over that time, we’ve talked with 300 MSPs and engaged with the top players in joint, hands-on deployments of certain Intel technologies. In the process, we’ve gotten to know some very smart people running very successful businesses. We’ve also met many who were somewhat adrift, if not floundering, as they try to adopt a business model based on selling trustworthy services rather than IT products.
One thing that stands out about the leaders is their focus on “continuous improvement." Most places, that’s a buzzword. But when these MSPs are describing their businesses to us, it’s not only one of the first things mentioned, but they usually then articulate the three key improvements they made over the last year and the two they’re working on now. It’s not a slogan with them—it’s the way they go to work every day. When we talk to their customers, “account control” is an inadequate term to describe the level of customer satisfaction and loyalty these MSPs enjoy.
OK, sounds great. But what exactly are they continually improving? They focus on three asset classes (people, processes, and tools) and they think about the only two ultimate areas of impact: their top line and their bottom line. They generally improve their top line by delivering more value to their customers, thereby gaining reputation, account control, repeat/increased business, and new customers. They improve their bottom line by cutting service delivery costs and building efficiencies.
In our experiences with leading MSPs, we’re jointly exploring an advanced technology (PCs with Intel vPro technology in laptop and desktop PCs) that happens to impact both the top and bottom lines. Proactive power management (saving on the order of $100 per PC per year, as our case studies show) and reduced PC downtime (up to 90%) are real improvements that customers quickly appreciate—in other words, they’re highly visible. Reduced costs of service delivery (by speeding trouble ticket resolution by 50-60%, typically, and reducing deskside visits 30-40%, typically) goes direct to the bottom line to improve margins now and going forward. This is a prime example of how leading MSPs are continually exploring the new things, in this case an advanced tool, that will grow their business.
Eric Townsend is Director of MSP and SMB Marketing for Intel Corporation. You can contact Eric at email@example.com. Monthly guest blog posts like this one are part of MSPmentor's annual platinum sponsorship. Read all of Townsend's guest blogs here.