As cited in CompTIA’s 4th Annual Trends in Managed Services report, “the global managed-services market is predicted to grow to $193B by 2019, at a Compound Annual Growth Rate (CAGR) of 12.5%.” What is fueling this impressive level of adoption? Why are so many business owners fans of your business model? We dug into the report to examine the top reasons small-to-medium-sized businesses (SMBs) list for working with MSPs and IT solutions providers. As you build your 2016 sales strategy, pay attention to these main market drivers.
Why SMB Owners Demand Managed Services
When thinking about how best to position your managed IT services, it’s worth considering what points make for the most compelling sell. Remember that while you may think they should adopt your business model for one reason, they may have an entirely different set of priorities that you should appeal to first. So what should you lead with when marketing and selling to prospective clients? Using data presented in CompTIA’s report as reference, we break it down for you! How well do you deliver – and communicate that you deliver – each of the following?
Let’s break the top five down:
1. Increased efficiency/reliability of IT operations
As depicted in the chart above, 56 percent of companies with over a hundred employees list this as the main reason for working with a managed services provider (MSP). Indeed, it is the single most popular reason given. Often, the SMBs you aim to partner with have over-burdened IT staff with employees who may lack the skills and training for certain tasks or can’t handle the whole of the company’s network on their own. In response, these companies recognize the value of working with an outside technical support team. According to CompTIA’s report, “60 percent of end users describe their managed services engagement as a collaborative arrangement with their internal IT department, suggesting that certain IT areas fall into the MSP bucket, while others remain in house.” Notice how the reason provided is to improve the abilities of the in house team, not to do away with these IT employees altogether. Not only does it help having an extra team of IT experts able to troubleshoot and remediate issues that arise, clients benefit from having access to the latest technology and business-grade solutions that maintain uptime and profitability, such as remote monitoring and management (RMM), backup and disaster recovery (BDR) and cloud computing. Investing in these tools increases the reliability of organizations’ IT infrastructure. Investing in the managed services business model tackles existing labor constraints and prevents internal IT departments from always having to play catch-up.
2. Enhanced security/compliance
Laptops, desktops, smartphones, applications, tablets, servers, operating systems, browsers, wearable technology and the like all store and transmit data and thus require the strictest security measures. Prospective clients will turn to you out of fear of becoming the next headline in a high-profile data breach or data loss incident. Remind them of the most notorious examples highlighted in the media, and share the results and fallout. Are you offering compliance as a service? If you’re trying to convince a doctor’s office to consider you, begin by stressing the importance of working with a HIPAA compliant IT solutions provider, one who understands HIPAA regulations and how to supplement them with additional managed security protocol, policies and procedures. Reference the Anthem data breach, which implicated one-third of Americans and compromised the medical data of nearly 100 million individuals. As CompTIA’s study finds, security and data protection resonates with your target audience. Along these lines, compliance is becoming even more of an outsourced IT adoption driver for SMB owners, especially with regard to PCI security standards, since many businesses offer e-commerce on their websites.
3. Proactive approach to maintenance
This is a benefit of managed IT services that we discuss a lot because it is so important. Your clients don’t want to have to think about their daily IT operations. They don’t want to have to second-guess the reliability and speediness of their network connection. Similarly, they don’t want to have to worry about what the state their IT environment will be when they commute in to work each morning. They choose to work with an MSP because you can provide 24/7/365 coverage. Services like RMM and the security suite you offer detect potential disturbances and vulnerabilities, allowing you to resolve these problems before they develop into more critical threats. When you offer fully managed IT support, you can often troubleshoot and remediate glitches or bugs before the client is any the wiser. Again, they’re paying you to worry about these things for them. Does a CEO have the time to verify that the backups his company has taken actually worked? We already know that data management in the cloud is expected to yield more managed services revenue in 2016. In working with the right MSP, key executives can take advantage of proactive BDR solutions that offer business continuity by combining RMM intelligence with regular, encrypted backups, cloud computing capabilities and IT virtualization.
4. ROI/cost savings
One of the biggest business values of managed services is greater cost savings, but it’s one respondents have increasingly reported less, according to CompTIA findings. In fact, whereas in 2011, it was the number one factor in choosing managed services, only 30 percent of study participants maintain it’s their top reason today. Perhaps MSPs have to do a better job of explaining how their IT services reduce costs and increase ROI. IT budgets consist of many items: hardware costs, software and network infrastructure costs and maintenance costs, to name a few. Recall how in point number one we state that MSPs can offer all the latest technology. This in turn smooths out the latter listed maintenance costs that accompany outdated hardware, which internal IT departments may not have the budget to upgrade. Don’t forget about the expense of IT labor, which can be the most volatile over-time. Maybe the company you want to work with needs to reduce the size of its IT department because the cost of paying their current staff is far too high. It could also be the case that the company has no dedicated IT team and employees are forced to compensate by performing technical tasks that are outside of their core area of expertise, slowing productivity and preventing the business from being able to grow. With the managed services business model, customers are able to more easily predict their IT costs on a month-to-month basis. Clearly break the ROI of managed services down for them, and explain how freeing up more staff time to devote to higher value projects they’re properly equipped to manage increases productivity overall. Then, be sure to review these cost savings in your quarterly business reviews (QBRs). These meetings will help you prove that your services are indeed valuable and will help clients understand the part you play in helping them reach their business goals.
5. Free IT staff to work on strategic projects
Finally, an argument for managed services we’ve been hinting at all along – their IT employees can increase productivity by concentrating on those projects and assignments they’re the best suited to tackle. As we’ve already established, the cost of labor is significant for any business, but especially for SMBs who rely on MSPs. As such, the business owners you appeal to will want to ensure that they are getting the most out of what they’re paying for. It doesn’t make sense to pay a full-time employee with little-to-no experience to migrate their on-premise Exchange servers to Microsoft Office 365 when they could outsource the same task to a technician with the appropriate level of skill and experience, at a fraction of the cost. Ask these prospects what their IT staff spends the majority of their day doing, and then ask what it is they’re prevented from doing? Your managed services will help them maximize employee productivity and satisfaction. By partnering with an MSP with a help desk call center, for example, internal IT staff can free up time wasted recovering emails and resetting passwords and instead focus on strategic, revenue-generating objectives. The decision makers you sell to will appreciate that your business model helps them better utilize individuals’ IT talents, increasing operational efficiency and decreasing employee turnover.
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