How do you pay for these additional resources? You take on more clients to increase your revenues.
But how do you maintain service levels to all your clients while recruiting and expanding your customer base?
It’s a bit of a chicken and egg situation.
Mind the gap!
Scaling up to a proactive, fully managed service-based operation requires a significant investment in infrastructure, resources, new skills, management and sales time – plus, of course the funding necessary to achieve all this.
While your investment should ultimately be recouped by your ability to offer new services, handle more clients and support bigger, more complex organisations – there will inevitably be a gap before the rewards of this new business kick in and the revenue begins to flow
Even then, you will need to be continually investing to ensure that you are operating with the most up-to-date tools and technology – and have sufficient skilled resources to guarantee the capacity needed to meet the increased demand.
It’s a game of constant catch-up.
NOC: the bridge of your ship
MSPs in the earlier stages of Gartner’s MSP Maturity Model typically try to service more clients by taking on more staff and by developing their own service delivery structure. Ultimately, this approach will not be capable of delivering the breadth of service and increasingly high levels of response required by their clients.
Central to their ability to scale up – and underpinning the entire managed services operation – is the Network Operations Centre (NOC).
The NOC monitors and manages your clients’ IT infrastructure to keep it running smoothly and efficiently, 24/7. It enables issues to be detected and resolved before they impact their operations.
An effective NOC, supported by state-of-the-art RMM tools and scalable resource, is an essential component of growth. But the investment required to set this up in-house is unaffordable for all but the most established MSPs (typically Level 3 and above in the Gartner MSP Maturity Model).
Costly to set up, run and staff, it is out of reach for a lot of MSPs – while many who have followed this route have seen a negative impact on operating costs and profits.
Taking the next step
Bringing in extra bodies to help resolve the problem will only allow you to scale to a certain point. We talk to a lot of MSPs – many of whom are aware of the difficulties they will encounter in progressing to the next ‘level’ with their current operating model.
Those who are operating at the ‘Service’ capability level are faced with clients who want better value for money and higher performance as standard – all of the time, not just in office hours.
How can these MSPs scale up their team cost-effectively to cope with these demands? How can they offer a true 24/7 service with ‘always on’ monitoring, remediation, maintenance and support? How can they keep pace with client expectation coupled with the constant squeeze on their margins? How can they prevent engineer overload as pressures mount?
Even MSPs who have reached the ‘holy grail’ of being a true strategic business partner to their clients are under pressure.
How do they remain competitive, keep costs under control, and maintain profit margins as they continue to grow? Is their NOC as automated as it could be and if not, how much time and money will have to be invested to get it there? Are they using highly-skilled resources cost-effectively and in a way that they will ensure they retain valuable staff whilst at the same time be able to offer new in demand services to their clients?
These are the kinds of issues facing many MSPs looking to scale further.
The solution is one that you will undoubtedly recognise from sales discussions with your own prospective clients: let a qualified third-party take the infrastructure and skills burden away, freeing up your resources to focus on developing customer relationships, bringing in new accounts and providing the in-demand, higher margin IT services being actively sought by companies today.
And the same benefits you convey to your customers in the in-house/third-party debate are relevant to you if you are looking to partner for NOC:
- Your team will be increased by a whole pool of technicians – 24/365 if needed – who are also available to cover holidays, sick leave and ‘double up’ during busy periods.
- And not just any old technicians, but a team of highly experienced people who will provide the expertise and support that it would be difficult (and costly) for you to have available permanently in-house.
- This additional resource will include a much broader range of skills, with up-to-date certification and training in the latest, in-demand technologies and tools.
- It is a highly cost-efficient way of acquiring the skills and support you need to deliver high-quality service to your customers without the cost and headache of recruiting, training, managing…and, ultimately, replacing staff.
- Plus you are more likely to meet or exceed your customers’ expectations if you have a larger pool of technicians to draw on, so more likely to meet revenue targets as a result.
It makes sense to partner for NOC
There is no need to go it alone – and there are many reasons why you should not.
The most effective NOC is built on high levels of automation. MSPs often lack the time, knowledge and internal skill sets to set up and/or fully automate their NOC using RMM tools. It therefore makes sense to hand this over to experts who can tick all of the appropriate boxes. It may sound strange for an outsourcing company to outsource its own NOC, but it is a model that has been shown to work – provided, of course, that you select the right partner.
The increasing number of MSPs choosing to partner for their NOC benefit from lower up-front investment, a more flexible growth route and the ability to market new services more quickly.
And importantly, what would have been a major up-front capital investment for the MSP were they to set up their own NOC, becomes an operational expense that can be managed flexibly as the business grows. The essence of the NOC partner model is that you only pay for what you use, as and when you use it.
Choosing a NOC partner
Of course, success will depend on choosing the right partner for your business.
Here are the most important attributes to look for in a NOC partner.
Can you take advantage of market growth?
Annual growth of the SMB managed services market is predicted to exceed 20% over the next five years. In 2016, managed IT security services will be growing at 22%; IT ops management at 40%. Office suites in the cloud are already growing at 50%, year on year.
There are significant opportunities out there.
But, to go back to the ‘chicken and egg’ dilemma – how do you keep your existing business running and profitable while scaling up to develop the new skills and infrastructure needed to deliver the new services that will ‘delight’ your customers?
The best way is to let a NOC partner take over the essential day-to-day tasks required to keep your service levels high and your customers happy, while you benefit from predictable, flexible costs and the ability to focus on delivering the new customer requirements.