5 Ways to Overcome MSP Supply Chain Challenges

This blog is the second of a two-part series that addresses MSP resource challenges.

Managed services providers are battling several long-term issues that negatively affect their ability to do business. Unfortunately, financial and IT industry experts predict there is no end in sight for several of those challenges, including inflation, labor shortages and supply chain constraints. That last point is particularly concerning as MSPs attempt to upgrade critical systems for their clients while growing their revenue.

Following nearly three years of supply chain woes, 2023 may not provide many new solutions. The global economy is still experiencing hiccups from the pandemic and the demand for many products, especially IT components and devices, remains stronger than production. Some manufacturers are expected to proceed cautiously in the coming year with concerns over recession and inflation, particularly in Europe, where new Environmental, Social, & Governance (ESG) initiatives could significantly impact operations and purchases. The ongoing war in Ukraine also affects the supply of minerals and raw materials, including several key elements used in producing batteries and computer/electricity cables.   

MSPs are masters of overcoming the unknowns. If the past three years have proven anything to the business community, it’s the high value of having a skilled IT services team to solve the biggest challenges.

Those obstacles can be quite significant. When work from home (WFH) became the only option for businesses in many areas, MSPs upped their games—they planned the moves, procured hard-to-find equipment, and redefined their companies’ end-user support capabilities. With a virtually endless array of technological solutions and ideas at their disposal, managed services providers can quickly and effectively respond and resolve business-related issues for their clients, no matter the complexity.            

Addressing Supply Chain Problems

Product availability is one of the biggest issues MSPs will deal with in 2023. The good news is MSPs—the masters of technology, automation and process excellence—have several ways of addressing supply chain issues, including:          

  1. Expand supplier networks.
    During the early days of the pandemic, many MSPs began partnering with more vendors, distributors and online marketplaces than ever before. According to a recent report on IT procurement, 50% of providers currently work with four or more distributors, with 20% leveraging at least six suppliers to source their technology offerings. Those numbers nearly doubled in the last two years. With more sources, MSPs are more likely to find what their clients need at the best price.  
  1. Automate proposals and quoting processes.
    Another best practice for minimizing supply chain issues is maximizing the power of an MSP’s procurement tools. Implementing and integrating quoting and CRM systems allow providers to optimize the processing of Requests for Proposals (RFQs) and orders, which helps speed approvals, transactions and deliveries. Some of these systems allow decision-makers to select alternate options, monitor order statuses and locate hard-to-find equipment and supplies.    
  1. Speed cloud transformations.
    Is hardware the best option? MSPs can use real supply chain issues to convince clients to make a digital conversion, providing them with a roadmap and the expertise to make a successful leap for the future. These changes are mutually beneficial. Business clients can reduce their capital investments for a low monthly payment while MSPs boost monthly recurring revenue (MRR) and cash flow.
  1. Add online options.
    The good news for MSPs is that distributors are not the only option in today’s IT supply chain. Providers can readily procure components, devices and other supplies from e-tailers like Amazon Business, Newegg and TigerDirect. Those online ecosystems may not always provide the best margins, though the expanded options often allow MSPs to shop for the best prices and availability.   
  1. Plan further out.
    If MSPs can control the timing of certain projects or alter schedules to match component availability, they can reduce clients’ anxieties and expenses. Of course, when customers have urgent needs, any delays could derail the sale or, in the worst case, cause service disruptions. Providers should highlight ongoing supply chain issues to push long-term system refreshes and upgrades rather than relying on the availability of replacement parts for older equipment.

Turn Challenges Into Opportunities

MSPs are in a prime position to help their clients deal with supply chain slowdowns. Overcoming those and other challenges are what managed services providers do best and procuring hard-to-find components and devices is sure to be a differentiator in 2023. Creativity will be critical.

MSPs can provide tremendous value using their procurement and technology expertise. Of course, the financial side of the equation is just as critical for solution providers—protecting sales growth and cash flow. Ensuring constant income streams in what experts suggest might be a very challenging year for many businesses.  

While many uncertainties related to the pandemic may be over, other disruptions are on the horizon, and MSPs’ clients will need plenty of quality advice and support in the coming months. Helping SMBs  steer their way through potential obstacles allows managed services providers to endear themselves to customers further and create a firm foundation for future growth.      

Efficiency and automation are critical for MSPs. ConnectBooster is the payment solution that thousands of MSPs trust for automated billing and collections and improved efficiencies. Schedule a demo to see how ConnectBooster can simplify your processes and save you time. 


MSPS Guide to Predictable Cash Flow in Uncertain Times

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