The initial 4 steps to profitable service identification for MSPs

Our first part of our series Challenging times require a different approach to partnering highlights the importance of our initial engagement with new partners; service identification and strategy creation. This process is one of the most important and often overlooked parts of getting a new partner fully up and running, as well as continuing to ensure they are maximizing their revenue potential in the field. By understanding the nature of their business and how a joint solution strengthens their market position we enable them to beat out their competition in a structured way versus hopes and dreams.

1 MSP strategy review

For those of us that have run product teams we have all been there, create your VSEM, set our short- and long-term strategies, understand the corporate direction and look for ways to ensure we are beating our competitors, and we are setting ourselves up for success. These strategy sessions are not just easy slideware, they are built with many stakeholders in mind. Product, R&D, sales, marketing, executive teams are all engaged to ensure the company is behind the overall goal, resources are planned and investments are calculated.

As a partner, understanding this is the most important thing as this will be the base from which we will start to create new offers. We need to know what key investment areas – technology, verticals, or market- the company is going after. Otherwise, we run the risk of recommending a new solution that doesn’t align with budgets or the long-term focus of the organization. This will be met with limited interest and if it is picked up, sales will suffer because of it. You need a strategy that leads to profits.

We also have the ability to understand and ask questions about the company’s current challenges and market position. This helps us identify if there are ways a solution can open new markets the company may not have been looking at while complimenting the overall strategy the company is executing on.

2 Identifying the right markets for MSP services

The market is always changing. It seems that every day there is a focus area that a partner can go after, lately, it has been security. With recent hacks of food producers, oil companies or government agencies these can be a key area to focus on, but early last year it was more about disaster preparedness as we were entering a global pandemic. The key is not just understanding the market and vertical but how the market and vertical-align with your corporate strategy. The vertical nature of sub-markets cannot be ignored.

Understanding the vertical landscape

When working with Managed Service Providers we always start with a strong understanding of their corporate goals and targets. Who do they want to focus on and why? What is driving this belief that that is the right strategy? From there we can then build the market and vertical information. We can identify where there are gaps in the current strategy, or where there is the biggest opportunity for increased revenue or profit. Which verticals or markets are the best ones to start with? Who are the key competitors and market price appetite? Otherwise, partners can be stuck in the “shiny object syndrome” always chasing the latest thing and never truly executing their strategy.

For example, let’s look at a vertical – the manufacturing industry. In a recent report by Avant “78% of manufacturing responses indicated they use SD-WAN in some form” and “33% of respondents to a recent survey said they wanted to increase their usage of technology”. By understanding this we can then dig into how SD-WAN can provide increased automation of manufacturing and how performance analytics is a key requirement to ensure maximum utilization of equipment on assembly line floors by all the systems.

Understanding how to pitch these solutions differs based on the vertical. Articulating the market need in the language of the customer is critical to success.  Large-scale manufacturing organizations are more primed for SD-WAN networks where smaller manufacturers may not see the full value of the solution, so they need to pitched to differently. For organizations that are focused on manufacturing as a key area of their business, integrating a NAPM solution with their offer, and understanding how it plays into their overall corporate strategy is key to successful adoption.

Understanding the market landscape

As much of the world is starting to come out of the global health crisis many expect the demand for business consulting services to rebound strongly in 2021 through the 2024 timeframe, particularly from 2022 onwards when the recovery is expected to be at its strongest. This means organizations that have consulting or professional services in their strategy will be poised for an increase in business consulting opportunities. It is my belief that much of this consulting will be geared toward technology changes and application performance.

A shift in the workplace environment

In the past year, companies have had to adopt a work from home policy and applications have become distributed. Distributed cloud environments becoming much more prevalent meant organizations needed to ensure end users still had the performance they would in the office. They also needed to address the security concerns of users now leveraging home internet to access these systems.

Carriers also needed to shift the way they delivered their bandwidth. No longer can they drop large pipes to city centers and fan out to buildings there. They now need to increase bandwidth to millions of rural locations to address the bandwidth needs of these new home users. Peak hours for residential bandwidth shifted from late afternoon and evening to mid-day, meaning new routes were needed, new budgets had to be created and since we were in a pandemic install times had to be decreased.

As we start to move out of the pandemic enterprises and carriers are going to need to review how their networks are set up and update them to address the new norm. Organizations that offer managed or professional services (PS), can take advantage of this by enhancing or updating their portfolio. By leveraging a NAPM solution in their PS practice they can identify performance gaps and provide deep level insights up to layer 7. This level of insight allows them to provide a network optimization solution that can truly pinpoint the area of the network that has the biggest issues whether it is a home user, distributed cloud, or carrier network issues. They can recommend design changes to enhance the performance of the network and provide real value for their end users.

By identifying the service landscape, the target market & sizing the market opportunity we assist our partners to understand the real market needs, the current territory players, target market size & services landscape for solutions. Any investment can be balanced with the expected revenue to gauge just how attractive this market really is.

3 Solution development for MSPs

With all this knowledge we are able to develop a solution that not only aligns to what the company’s goals are but also has the largest impact on margin and revenue. By aligning the vertical, the current market, and corporate strategy together – with a solution that addresses all three – we create tailored service definitions and SLAs that meet the needs of the market with a defined target profile. A winning combination.

Identifying next-generation service opportunities is not easy and takes an intelligent team and rigorous structure to deliver. It cannot be off-the-shelf slideware that is pre-packaged, it requires real work that includes profitable analysis, service definitions, GTM planning, operation requirements, and launch schedules. We have found that when delivering these with a business model canvas we are able to highlight the key metrics and data points that PLM and senior leadership often look for. This aligns the new offer with the corporate goals and a real plan to take a new solution to market.

4 KPI creation for MSPs

Like my high school teacher used to say anything worth doing is worth measuring. If it can’t be tracked it doesn’t exist. We need to set the right expectations and have measurable tracking to ensure that we are on track with our goals and targets. I had a leader that used to remind the team that launching isn’t the end, it is just the beginning, so track and review, track and review, track and review. That repetition is the key to success, by defining the success criteria upfront and letting the entire project team and company know, everyone can focus on that same goal. And discovering quickly when things go sideways so we can get it back on track fast.

This consultative approach changes the way we do business and engagement. With a service that can be easily embedded with our partner’s technology and having a rigorous and consistent process, we are able to accelerate the introduction of new offers. By identifying and creating – or expanding – new world-class offers that leverage market insight, solution design capabilities, and a consultative approach we allow their product leaders and executive teams to understand and have confidence in new offers to take to market that increase revenue opportunities while aligning to the corporate goals.

To learn more about how Accedian can accelerate your business, learn more here or contact us directly at [email protected].