Managed services providers face various problems more times than they want to. However, if you want your business to succeed, then there is no other option but to overcome these problems. Even better, why don’t you establish procedures and tactics so you can spot signs of these problems and execute precautionary steps to avoid or limit these from fully becoming cloud managed services provider problems?
The Cloud Trend
Most of today’s technology innovations are centered on cloud including cloud-first and cloud-only. This is to retrofit the technology to on-premises tools and other functions or services. In addition, as more businesses see the benefits of adopting cloud services, they also prefer getting these needs provided by managed services.
In fact, cloud computing is now the mainstream so many businesses adopt the cloud to support some aspects of their businesses. As a way to keeping up with the quickly transforming digital marketing world, public and private IT cloud services are also evolving and becoming widespread.
What Is The Role Of A Cloud Managed Services Provider?
As the digital world accelerates, business owners also look for a private managed services provider like you to guide them, troubleshoot their problems or issues and assist while migrating to the cloud.
So how is your cloud managed services provider different from other service providers? It’s that you not only provide technical and troubleshooting support but also help them accept this new technology. As a result, you should help them from cloud migration until they are able to manage the cloud. Lastly, being the expert and effective cloud MSP that you are, you must also help them with cloud cost optimization.
In line with this, business owners are realizing the value of managed services provider and most of them acknowledge the vital role you have in the digital transformation projects of their businesses. There is a steady increase in employing MSPs like you for implementation and management and are willing to pay for experienced and effective service providers.
8 Problems Of Cloud Managed Services Providers
Managed cloud services are evolving faster than many business owners realize. The needs of cloud customers are very different from the traditional service needs after all. Due to uncertain variables, you as a managed services provider face challenges that you need to overcome to be able to provide the full potential for the business owners you cater to.
Here are 8 problems that cloud managed services provider like you may encounter and have to find a solution to.
1. Quick Cloud Adoption
As a managed services provider, you know that cloud is your main opportunity driver towards the future. However, due to the changing technological trends, you must be able to adapt quickly and find solutions to manage whatever problems or issues you or your clients suddenly encounter. Another challenge is that cloud selling needs special training and expertise that can be costly and time-consuming. In the end, you must provide added value to your clients since they look to you as their cloud MSP expert.
2. Commoditization Of The Sector
Commoditization remains a worry for a managed services provider. This is because almost all service providers look the same. This makes it difficult for you to stand out in a cloud market, where almost all MSPs are offering similar tools and solutions with various features at reduced prices.
In such occurrences, clients often wait for things to be more stable before deciding. Or your clients may play safe and hire branded companies or famous experts instead of checking out any new or small managed services provider that has the potential to provide prime support and guidance at lesser costs.
3. Changing Client Behavior And Rising Expectations
As millennials, your customers may have higher expectations and different demands than the traditional clients you catered to. They may also expect prompt communication and almost immediate solutions and innovations on anything related to managed services. Personalized solutions are becoming quite the norm so you must be able to address all of these whenever the need arises.
Remember that most businesses nowadays are better informed and educated on digital as well as cloud-based solutions. As a result, their buying behavior has resulted in often over-analyzing a selling and buyer situation. Thus, they tend to delay purchase decisions, giving them time to calm down and re-think what would have been an impulse buy. As such, a managed services provider must think of ways to add value and provide satisfactory offers to these kinds of clients.
4. Consistent Provision Of Quality Services Minus Automation
What is one of the problems encountered by a managed services provider?
- Provide quality service
- Prompt and budget-friendly service
- Maintain a strong professional relationship with clients
A cloud managed services provider must be able to deliver services on-demand or in a proactive way. This requires you to manage a lot of internal systems to provide the service needs of your clients while handling various communication and interoperation complications or issues.
You must realize that handling multiple management functions can expose your work to inaccuracy, time consumption, and cost. Imagine yourself handling application discovery, pricing management, provisioning, billing, invoicing, remote monitoring, handling backup, support, ticketing, and other management functions handled by a managed services provider. On top of this, you still have to cater to other specialties needed for you to provide the proper solutions for software-related problems.
5. Pricing Methodologies
Pricing is also tricky since you are expected to cater to multiple management functions possible all at once. However, to win clients over and hire you, you may need to undervalue your services or create pricing models that allow an optimum profit. There is danger, though, that some service providers will ask for very low fees.
These two present pricing problems to MSPs:
- Price increase makes it difficult to get contract renewal because clients balk at the increase.
- Commoditization plus margin erosion may result in lowered rates as MSPs compete to win clients over.
6. Cloud Billing Plus Management Of Multiple Accounts
Another major concern for a managed services provider is cloud billing and handling several accounts. Catering to multiple clients will require proper consolidation and multi-cloud services and solutions. Make sure that you can handle every aspect that you offered so you can maintain all your clients.
Here are some things to do to achieve this:
- Have visibility on all clients including their multiple accounts
- Keep records and accounts updated; verify account synchronization
- Upfront account deployment
- Proper resource removal
- Customer coordination
7. Integration Of Applications And Service Delivery
This managed services provider problem stems from:
- Adjusting workloads to another environment
- Justifying the operational lifecycle
- Maintaining constant and strong infrastructure
- How things run off-premise
Unfortunately, hard-coded values, lengthy and manual start-stop procedures and tightly coupled apps make it very challenging to manage operations. Before integrating applications, make sure the applications are compatible with each other.
8. Employee Churn And Decreasing Margins
Employee churn happens when you lose a staff technician or two to your client. Employees would want to stay with you if you offer stable hours or a regular job, better pay and more incentives. Consider offering better incentives so you can overcome employee churning.
On the other hand, shrinking margins are brought about by MSPs competing against other MSPs with pricing as the sole consideration. To address this problem, work towards having better offers by leveraging on whatever skills or technology is available to you.
6 Ways To Overcome MSP Problems
Here are some ways to overcome managed services provider problems:
1. Know your clients and their needs
Know and understand your clients and the technology they need. Discover their company needs, future plans and cloud solution interests so you know what managed services you’ll most likely need to offer and provide for them. This will make it easier for you to consider you for cloud buying.
2. Make a sound business plan
To do this, you have to evaluate your skills and competencies. As an established MSP, you have to gear for value-added and necessary services. This will enable you to offer prime services that can land you contracts. Ultimately, establish superior response time, application uptime, and resolution time. Strive to become the go-to MSP for your clients to maintain existing ones and get new ones.
3. Set levels of investments
Consider investing in technology that will allow you to eventually offer automation, advanced analytics and deep security offers. Basically, your goal must be to upgrade your services by investing in skillsets and technology to upgrade your service offers as well.
4. Create a details P&L Analysis
Set detailed pricing strategies incorporating costs, operating expenses, comprehensive breakeven with ROI analysis. Analyze and set how much to charge for a set of services and how to bill your clients. Whether it is per device, per user, per app or a fixed fee covering a set of services and/or solutions.
Make sure you match your pricing with your service offerings and set a competitive package. Factor in seller compensation with your new cloud pricing. After setting these, you can check if these are reasonably priced in the viewpoint from your target clients.
5. Be a “cloud orchestrator”
This is achieved if you have the ability to manage and integrate various IT environments competently and effectively. If you can be a conduit for every aspect of the cloud, you will become an indispensable managed services provider for your clients and other businesses. Success in this area will ensure continuous clients from old and new ones.
6. Leverage a unified management platform
Can you handle more than a couple of cloud consumers at one time? If you can manage the complexity of attending to myriad functions from multiple clients all at once, then you are on your way to success. Having a unified management platform will help you achieve this sooner rather than later.
Formulate or invest in a cloud business process management platform will help you manage these management functions:
- Remote monitoring
- Application discovery
All in all, being a managed services provider is complex and requires a lot of functions from you and your service offers. These complexities coupled with more demanding needs and requirements from clients will result in various problems that you have to learn to overcome if you want to succeed in your business. With the proper knowledge and support group, you can succeed.