Designing Managed Services to Achieve Strategic Goals

If your organization has decided to launch a managed services division, you’ve undoubtedly already realized how intimidating it can be. The business models for managed service providers and those for hardware, software, and more traditional services like professional, support, and field services are fundamentally different from one another. So, continue reading if you want tips on designing managed services to achieve strategic goals.

Well, it’s a good thing to know that you are not the only one. According to a poll, more than 70% of TSIA members have either established or are growing managed services businesses.

However, the managed services industry is changing quickly. Even though many value propositions—such as the reduction of the total cost of ownership (TCO), risk aversion, accelerating the adoption of next-generation technology, etc.—remain, Scalability, automation of delivery, the specialism of sales, standardization of the offer, and client governance optimization have all gotten a lot of attention.

So how do you start? Follow the following seven steps to learn how to start a managed services business.

1. Record Your Strategy

A solid PowerPoint presentation and an Excel spreadsheet with revenue and expense projections may not be sufficient for developing a managed services plan.

An effective strategy document is utilized to channel resources and promote your initiatives. Every part of the MS business must be covered, including the offer, sales, marketing, delivery, finances, sourcing/supplier management, client management, and so forth. The strategy paper must include quantifiable and auditable targets and objectives for each of the aforementioned areas. We suggest making these objectives quarterly checkpoints that the leadership team must continually assess.

2. Outline the Structure of the Organization

It may look easy to describe the structure of an organization. But putting it into practice is incredibly challenging, therefore investing in the right information and resources is crucial. The titles of the organizational responsibilities carried out by managed services are the same as those carried out by other businesses, including offer management, sales, marketing, delivery, and finance. The knowledge and abilities needed for these tasks in a managed services business are very different from those in a product business.

3. Define the Offer

The managed services company’s offer serves as its cornerstone. If you get it wrong, your growth will be difficult and limited, if it occurs at all.  Focusing on the market is crucial, which frequently requires a tech company to step outside of its comfort zone.

The main focus of the offer should be on reducing or eliminating the misery that the customer is experiencing as a result of their technology. It could be a financial hardship, an operational difficulty, etc. Managed services are the first product a digital business with outcomes as a top priority offers.

4. Specialization of Sales

Selling managed services is completely different from selling technology. The sales resource must have a thorough understanding of the technology being managed and the operations required to handle tech at an ideal level because the offer is outcome-focused. Additionally, they must comprehend the customer’s financial activities.

It takes longer to quote and close the deal because of how complicated these transactions are. The decision is often made by the highest administrative level of a significant line of business, not the IT organization, but they do have some influence.

5. Service Delivery

Delivering managed services is different, just like marketing managed services is. Deliveries are not only your operations; they are also the operations of the customer. The delivery model ensures that the intended outcome of the offer is achieved. Delivery must be proactive, anticipatory, and preventive. It is crucial to have automation, scalability, and uniformity. Delivery is the managed services function that has the biggest impact on revenue and client satisfaction.

6. Customer Operations

They will remain a gift as long as their contentment is maintained.  The client operations team must address how the customer “feels”. Here is where the ongoing communication with senior leaders happens. They act as the organization’s public face. The team’s top priorities should be customer happiness, contract performance, renewals, and upselling and cross-selling.

7. Financial Operations

The managed services financial organization may either be your best buddy or worst nightmare. There must be someone in the managed services organization who is more familiar with your company’s finances than the finance team.

The financial operations of managed services are another area where they differ greatly from companies that offer products or add-on services. Revenue forecasting, revenue recognition, margin computation (gross and net), continuous resource investments, and operational investments all require specific attention.

Final Thoughts

The finest managed service companies understand that success cannot be hurried and constantly strive to improve their offerings and surpass completion rates. The aforementioned seven suggestions will serve as a catalyst for improving MSPs’ level of customer service and ensuring their long- and short-term success. By considering these recommendations, you can develop a managed services strategy that is successful. It can also shield you from disasters while enhancing competition in your sector.