Because of how deep our fact-finding goes in the benchmark process, we can run analytics on hundreds of views through the correlation of dozens of practices and key performance indicators. These analytical views are the basis of our assertions for which service practices positively or negatively affect a company’s performance.
This new blog miniseries, launching with today’s post, moves past the mistakes made by managed services providers (MSPs) and provides a summary of five key practices that have a positive, measurable impact on a company’s key performance indicators (KPIs). Our assertions not only use the data mined from TSIA benchmarking research, but it also includes input taken from senior technology services executives through TSIA conference participation and interviews of over 120 additional service executives across the technology industry.
This first practice is truly the foundation of a managed services business. It’s what sets the course and the tone of the organization, creates objectives, and establishes measurability.
The first key practice of a successful MSP is:
A Well-Defined and Documented Managed Services Strategy
Documenting and evangelizing your managed services strategy is one of the most foundational and beneficial activities an MS organization should execute on. We’ve all heard the phrase “SMART” used when planning goals: specific, measurable, attainable, relevant, and time-bound. An organizational strategy is essentially a set of goals that answer the following questions: Where do you want to go? How do you plan on getting there? What are the expected results or business outcomes? Why does this make sense for the corporation?
According the TSIA Q4 2013 Managed Services Benchmark Study, 82% of managed services members state that they have a formal, documented managed services strategy. However, when peeling back the layers of the onion, only 25% of the companies stated their MS strategy included a detailed strategic vision over a three- to five-year period with specific outcomes (Figure 1). These included a detailed business plan supported by a financial business case justification, including required investments, intended operating income levels, realistic growth rates, and well- thought-through expenses plans. Interestingly enough, the companies that employed a highly detailed strategy that included all aspects of the SMART principle had significantly higher gross margins, higher operating income levels, and revenue growth rates than those that did not.
The TSIA Insight document titled “Five Key Practices of a Successful MSP” expands further on this crucial MSP practice and also includes an outline companies can use to start building their SMART managed services strategy.
Don’t forget to stop back next week to learn the next key managed services practice. As always, feel free to reach out to me directly to learn more about managed services and how TSIA can help your MS business.
Read more posts in the “5 Key Practices of a Successful Managed Services Provider” series:
- A Standard Services Catalogue
- Specialized Managed Services Sales Expertise
- Scalable and Repeatable Delivery Organization
- Strong Financial Management
About the Author
George Humphrey is senior director of managed services research for TSIA. He is a networking and communications industry veteran of over 20 years with extensive experience in managed infrastructure and application services. Keep the conversation with George going. He may be reached at email@example.com.