IT services companies have come a long way in the past two decades. The evolution of the model may seem more like a revolution to those who experienced all the business changes, technology shifts, and delivery model modifications during that period. From storefront sales and VAR offerings to more complex managed IT and cloud services portfolios, the channel has undergone an extreme makeover that continues to reshape and empower our community.
The one constant among all that change is the options for building strong IT service ecosystems. Whether you manage a VAR business or an MSP, connecting with peers, vendors, distributors, industry specialists, and other experts helps expand your company’s capabilities and knowledge base. Tapping into other peoples’ bandwidth and skill sets creates the flexibility and scalability IT service firms need today.
Your ecosystem consists of all the experts and business partners you engage with to deliver the best products and services to your clients. There is virtually no limit to the number and types of people that make up that “inner circle,” though less than ten is a general rule of thumb.
Who are the top five people (or businesses) you spend time with each month? MSPs’ success typically comes from their ability to adopt industry best practices. Engaging and collaborating with “rock star” leaders and organizations can elevate your business standards and expertise. A rising tide lifts all boats. MSPs need to be sponges and improve their operations by learning from others and duplicating the processes and policies that drive success. Seek out peers who are willing to help expand your knowledge and mindset.
An MSP’s ecosystem may also be a sounding board. When you come up with an idea that sounds like the best thing since sliced bread, it’s good to have someone poke holes in the concept or offer alternate suggestions. Whether sharing details of their mistakes or successes, learning from the experiences of similar companies can save you and your firm a lot of time, money, and potential headaches.
Focus on the Market
No two ecosystems are the same. While an MSP could theoretically create the exact same vendor partnerships and emulate similar expert alliances, the value to the provider and its clients would be questionable. Each existing and prospective customer has different needs and requirements, and the people and processes employed in those businesses are often quite unique. [Check out this episode of “Confessions of an IT Business Owner” that highlights these very opportunities]
Your ecosystem should support those variations. Most MSPs are great at certain things, good at others, and usually, avoid those requests that fall outside their areas of expertise. When clients sign a contract with your firm for a specific set of IT services, perhaps your core offerings, that action rarely fulfills every need of that business.
Your customers may have made some compromises to work with you. That statement is not a knock on your support capabilities or your offerings but an acknowledgment of potential technology or services gaps that exist for that client. MSPs simply don’t have the capacity to offer every possible solution on their own. Providers often secure contracts based on the comprehensive programs and packages they currently deliver. Those offerings may top the competition’s proposals but could still leave a new client in need of more specialized support.
For example, a hospital system may sign a contract with an MSP to receive remote monitoring and management resources, Office 365 apps and expertise, and cybersecurity and business continuity solutions. Most healthcare facilities will require a variety of advanced technologies and support options. Key on that list is IT integrations that improve medical equipment utilization and reporting and compliance-related cybersecurity and data archiving solutions.
Rather than avoiding those needs and risking losing that business to a competitor, MSPs can partner with vendors, distributors, or qualified peers to deliver those specialized services. Medical clients are not the only organizations that can benefit from an expanded ecosystem. MSPs can prosper in virtually every vertical market with the right team to support their efforts.
Understand Your Core Competencies and Services
The more you offer, the more things your team will need to support. With all the available technologies today, it is extremely easy for an MSP to expand its portfolio far beyond its capability levels. A strong ecosystem of channel partners will help minimize your training, bandwidth, and support requirements − no matter how many unique clients you take on in your business.
The key is focusing on the things your team does well. What parts of your current and prospective portfolio of services can your MSP effectively support today? How profitable is each offering?
The answers to those two questions are critical when assessing your firm’s core portfolio of services. You may lack the resources to profitably and cost-effectively deliver some current or proposed offerings. There is certainly no shame in admitting you can’t do everything as well or as efficiently as someone with more experience or extensive training in that area.
That’s why it is so important for MSPs to periodically review their portfolios and elicit feedback from clients on their service levels and offerings. At least quarterly, it’s a good idea to sit down with your team and assess each item on your line card. While revenue and profitability should be a big focus, gaining insight from staff members and customers can help you determine which services you may wish to outsource or improve.
Forge Valuable Vendor Partnerships
MSPs trade time and expertise for dollars. Efficient use of your resources helps tilt that equation more in your favor, which is why successful providers develop strong partnerships with key vendors. Providers who can develop strong and mutually supportive relationships with these companies perform more efficiently and profitably.
Channel vendors want to help. They collectively invest millions (perhaps billions) every year, building the solutions and programs MSPs and your clients need to succeed. The great ones will go above and beyond to assist, especially when you encounter unusual problems. Want to get your vendor partners’ attention? Provide them with plans detailing how you can increase sales by incorporating more of their services and solutions. Creating win-win-win scenarios (that last one is for clients) strengthens those key relationships and drives more MRR for your business.
From sales and implementation support to marketing and demand generation opportunities, your vendor partners can provide a lot of resources. Vertical and compliance expertise are great examples. In many cases, vendors will pitch in during sales discovery or implementation calls to ensure prospective clients are aware of and addressing all their potential needs. That type of support not only increases the dollar value of contracts but creates a tighter relationship between an MSP and its new customer.
Specialized expertise is another opportunity. For example, ConnectBooster partners understand the value of ensuring electronic transactions are secure and automated. Payment processing may fall outside your comfort zone as an MSP, but we can supply that expertise behind the scenes for your client. You can leverage our investments (not yours), increase your Monthly Recurring Revenue (MRR) and be the expert – leveraging an ecosystem of experts to fill in any gaps or perform the heavy lifting. Check out our REV program to learn how to add incremental income without increasing your team’s workload.
Build a Strong Peer Ecosystem
The final piece of the “partnership pie” can be found in your IT services community. Are you a member of a peer group, or do you regularly connect with other MSPs? Building alliances and leveraging the skills and resources of those companies is a good way to improve your firm’s scalability.
No one can be an expert in every area. Partnering with an MSP with strong VoIP capabilities or an advanced cybersecurity practice could save you from making costly investments or losing a key client. What support or specialized service could you provide that firm in return?
Strong partnerships are built on mutual benefits. Expanding your ecosystem may require a little extra time on the front end – exchanging ideas, forging bonds, formalizing the relationships – but the benefits far outweigh the investments.
As you apply concerted effort to grow your MRR, make sure your revenue doesn’t get trapped in accounts receivable. ConnectBooster makes it easy to get paid on time, every time, and effortlessly scales to match your business’ growth. Request a personalized price quote.