For IT resellers and solutions businesses, the benefits of offering a managed services model are increasingly recognised and well-understood. In fact, according to recent research from IDC, the market for managed security services is expected to hit $5.5 billion in Australia by 2024, and $821 million in New Zealand. The two markets combined represent a CAGR of more than 12% between 2020 and 2024.

However, for many established IT organisations, making the transition can seem like a daunting prospect. Many MSPs struggle to find the right technical skills to meet their needs. Another challenge is the potential reduced cash flow of moving to a service provider model.

Making the move takes planning, preparation and research. Yet, a successful transition can lead to enhanced efficiency, better service, and increased profit. In practical terms, what does this mean for those considering a shift to a managed services approach?

Preparing for transition

The transition process should begin with market opportunity evaluation, and there are several practical steps to follow. Clients demand infrastructure that keeps them constantly connected. There are lots of organisations out there with considerable experience in using service providers. This makes fundamentals, such as 24/7/365 connectivity guarantees, an absolute must-have.

It's important to identify client security needs that can be automated, such as patching, antivirus updates, and malware removal. Adding this information to industry research can help identify key trends and determine popular services. Trusted media outlets, advisory sites and industry association websites can offer detailed background intelligence.

There are many directions available in the security market, including remote monitoring and management (RMM), security help desk, backup and disaster recovery, managed security, and patch management.

Leveraging the power of automation

Using automated software to virtually monitor and manage IT infrastructures can be vital. This eliminates the need for on-site visits and additional service headcount. Two essential solutions in any managed services tool kit include RMM and professional services automation (PSA). RMM provides the ability to deliver the best possible reactive and proactive response times.

PSA allows for easier organisation around one system so everyone can connect through a unified operational platform. Quote and proposal automation solutions can also be integrated with PSA and RMM solutions. This helps streamline the process from sales to procurement to implementation, saving time and resources.

Choose a solution that combines the quoting abilities of a quote and proposal solution, workflow power of the PSA tool, and the RMM platform's visibility to create an end-to-end unified solution. This will help any IT services business run smoothly.

Getting this right means organisations can respond quickly to client needs. They can capture and store information to uncover the root cause of problems and predict new issues before they occur. It not only helps establish the basis of good MSP practice but also simplifies troubleshooting time for technicians.

Well-integrated solutions will help efficiently capture more billable time, improve ticket management and identify and manage sales opportunities.

Positioning the brand

Building a strong and trustworthy brand is vital to the success of MSPs, especially when referrals are such an important method for generating new business. Providing customers with an amazing experience will build brand loyalty, which will frequently translate into additional opportunities.

MSPs must remember that they are selling value and positioning themselves as a business advisor – not a repair business. As MSPs create brand positioning, they should highlight the peace of mind that comes with proactive monitoring and support. Consequently, they will be in a stronger position to push a message through various communication channels.

Preparing a team for the switch

Changing to a service provider model can be made more difficult by the challenge of finding the right people – internally and externally – and trusting them to help grow the business. For instance, spending time with a sales team is critical, who should clearly understand the value managed services brings to prospects and customers.

That team, which will now sell services to companies instead of technology, must focus on soft skills because good service provision must centre around user experience. The business sells an intangible product under a long-term contract, and the sales team needs to be on board.

A big consideration is whether to retrain the current sales team or hire reps with MSP experience. It's crucial to ensure that any new hires are thoroughly trained, and that there is a compensation model—based on total contract value or gross profit instead of revenue—in place that balances incentives and earnings.

Staying on top of growth opportunities

One of the attractive elements of the service provider model is the scope it offers to grow. A healthy mindset to adopt is one that aims to be one step ahead of the trends in the industry. This ensures delivering the best service possible and meeting customers' needs. Building managed security services can provide the basis to expand into a range of other related service provider specialisms, including:

• Cloud management — support clients as more of their applications move from on-premise to the cloud.
   
• User-centric computing — clients expect an MSP to manage a collection of devices anytime, anywhere. Evaluate the IT service plan and move toward a per-user or hybrid billing practice.
   
• IoT — identify innovative ways to incorporate IoT into the service offering to take advantage of new revenue opportunities.
   
• Virtualisation — requires fewer servers since multiple operating systems can run on one physical piece of hardware. This keeps costs down and unifies resources.
   
• Compliance — meeting the requirements of multiple regulations and standards is not an easy task. Look for ways to help clients with compliance and protecting their vital information.

Building a successful MSP business requires time and financial resources. To be successful, it's important to evaluate existing services, retrain or hire a new sales team and invest in new software tools. Expanding marketing activities will also play a role in growing the business.

Perhaps most critical to success is making the necessary cultural shift. It's a new way of thinking for technical and sales staff, but one that's already well established as a critical trend for the future of the IT industry. The opportunities are there for those who want them.