Reseller News

​Top 6 ways to build a profitable managed IT services business

Onus on channel to change practices in the wake of as-a-service offerings.
Moheb Moses - Channel community director, CompTIA A/NZ

Moheb Moses - Channel community director, CompTIA A/NZ

The proliferation of as-a-service offerings has changed the face of the IT channel.

As a result, most organisations can no longer focus simply on selling “beige boxes”; instead, they must find ways to leverage new product delivery methods and customer needs to develop new revenue streams.

“To build any business effectively, you need to start by understanding what your target customers need to meet their objectives,” CompTIA A/NZ channel community director, Moheb Moses, said.

“Successful managed service providers (MSPs) provide the types of unique support their customers need, and the cost-effective nature of managed and cloud services can create a win-win.”

According to recent CompTIA findings, more than a third of organisations characterise MSP relationships as “strategic”, encompassing the majority of IT functions.

Businesses favour proactive providers that overcome the complexity of implementation and support services, and 60 per cent describing managed services engagement as a “collaborative arrangement” between an internal IT department and an outsourced partner.

“Customers understand that managed services reduces their need for capital outlay and that this gives them greater flexibility with their operating budgets,” Moses added.

“Highly successful MSPs provide more than just proactive IT monitoring and support: they build portfolios their customers rely on to help run and grow their businesses.”

Looking ahead, Moses has six industry best practices to help channel companies build a profitable managed services business:

1 - Evaluate the real opportunity

“It’s essential to conduct thorough research to understand where your firm will fit into the marketplace,” Moses said.

“It’s then essential to create a business plan that articulates your value proposition, assesses your current skills base, and defines the market and opportunities.”

2 - Build a dynamic offering

“Offering a portfolio of services that addresses customers’ comprehensive business requirements is essential,” he added.

“You must understand your target customers’ tactical and strategic objectives, IT systems, policies, and compliance concerns.”

As a result, Moses said channel organisations need the tools and expertise to support the entire portfolio 24/7 to be effective.

“Automation, repetition, and ‘one-to-many’ deliverables are the hallmarks of a successful MSP model,” he added.

“This means your organisation needs to have the proper systems, processes, and resources in place.”

3 - Create a marketing plan

Moses believes MSPs need to create a valued brand, build a prospect list, create a preferred prospect list, and start executing tactics to attract customers.

“This should include seeking vendor market development funds (MDF),” he explained. “They can provide valuable support to help bolster your marketing efforts.”

4 - Build a sales plan

For Moses, selling one-time or periodic transactions require a very different approach to selling long-term, recurring service agreements.

“It requires a strategic approach that focuses less on network enhancements and device upgrades than on a broader, forward-looking program of support,” he added.

5 - Convert prospects into valued clients

While getting a signed agreement is crucial, Moses said MSPs need to focus on creating long-term clients by building tangible relationships.

“They can do this by taking a proactive, highly-engaged approach, positioning themselves as trusted advisers by demonstrating value at every opportunity,” he said.

6 - Build an MSP business highly valued by clients

Maintaining momentum through adaptation is key.

As explained by Moses, this means focusing on quality of service, high visibility within the client organisation, conducting strategic marketing activities, expanding where possible, and more.

“Every MSP business should validate that skills, processes, and tools against industry standards,” he added.

“By doing so, and by following these steps, channel organisations can improve managed services revenue opportunities, enjoy greater vertical market success, and grow the value of their business.”