Unlock Profitability & Efficiency
Creating new and emerging managed services presents a profitability challenge to even those tech CEOs experienced with services businesses.
Managed Service Providers (MSPs), like any business, are consistently seeking avenues to enhance profitability and streamline operations. However, amidst the myriad of opportunities in cybersecurity, challenges lurk that can impact the bottom line.
Whilst some MSPs can see margins of up 89%, others are facing losses as a result of this complex landscape. We explore how MSPs can increase profitability and ensure efficiency in 4 simple steps.
Step 1: Work with a vendor that gives your brand a competitive edge
Profitability beyond revenue streams
Profitability isn't solely about increasing revenue streams; it's intricately tied to ensuring customer loyalty and retention. White labelling is a crucial part of this, allowing you to tailor products to resonate with your brand identity. The power of this cannot be underestimated, with studies showing that branding consistency can increase revenue by 20%.
Working with a vendor that doesn’t enable seamless white labelling is taking money off the table. Introducing new vendors to customers simply as new, integrated features, adds value, enhancing customer stickiness and trust.
Step 2: Choose vendors that offer a unified platform
Use integration to streamline operations
Operational efficiency is deeper than just ticking off tasks. It's about crafting a workflow that feels effortless and amplifies your experience. Imagine the boost in productivity when all your systems speak the same language. A unified platform becomes your command centre, offering a single pane of glass view of every service.
If you're partnering with a vendor that's still juggling multiple dashboards, you’re missing out on the simplicity and effectiveness that comes with integration. And in this fast-paced world, who doesn't want to experience services that are both timely and top-notch?
Other streamlining features include:
Unlimited Admin Users:
Create admin accounts without restrictions to distribute the workload effectively.
Granular Role-Based Access Control (RBAC):
Exercise precise control over who can do what, ensuring a clean division of labour and greater internal security.
Automated Reporting via API:
Pull real-time reports automatically, enabling a proactive approach to account management.
Step 3: Prioritise flexible licensing
Stay agile with flexible licensing
The tech world is akin to shifting sands, changing every moment. And in such a world, being rigid is not an option. Flexible licensing is giving MSPs the room to move, allowing them to adapt without being chained to long-term commitments. Vendors such a Censornet don’t lock you into a 12 month contract.
If your vendor is still stuck in the old-school, long-term licensing mindset, then you lose out the chance to proactively react to today's market demands. In a world that's constantly evolving, your strategies should be just as dynamic.
Step 4: Don’t forget indirect costs
Look beyond the price sheet
Costing for MSPs isn't merely a spreadsheet task; it's about understanding the intricate layers of financial components that shape the bottom line. At its core, this balance revolves around direct and indirect costs.
Direct costs are those immediately tied to delivering a service, such as device-based management software or user-specific SaaS licenses. On the other hand, indirect costs, while not linked to a specific client, play a pivotal role in the broader operational landscape of an MSP.
These can encompass tools like professional services automation platforms or overarching expenses like marketing and sales commissions. A Gartner report, "A Tech CEO Guide to Managed Services Profitability Modeling" highlights the significance of grasping these costs, with adept MSPs leveraging this understanding to boost profitability while offering competitive, value-driven services.
Final thoughts
The path to profitability and efficiency is paved with strategic choices and informed decisions. By prioritising brand resonance through white labelling, harnessing the power of integrated platforms, embracing licensing flexibility, and maintaining a keen eye on both direct and indirect costs, MSPs can navigate the complexities of the industry with confidence.
As the digital realm continues to expand and transform, it's these foundational principles that will empower MSPs to not only adapt but thrive. Remember, in the world of managed services, it's not just about staying ahead—it's about setting the pace.