Streamlining service delivery operations: Achieving growth and efficiency for modern MSPs

The managed service provider (MSP) industry is primed for massive growth over the next few years, opening up new opportunities and challenges for MSPs hoping to successfully scale their business.

To help ensure MSPs are prepared for the changing industry landscape, this blog will dive into the current state of the MSP market and the critical factors for streamlining service delivery to achieve sustainable growth and increased efficiency.

The current MSP market outlook

By 2025, the small and midsized business (SMB) technology market is expected to reach $500 billion in managed services revenue—representing a 100% growth over five years. There are several factors that are fueling this rapid expansion, including:

• Increased complexity: The cybersecurity threat landscape has grown more complex, so MSPs must provide additional cybersecurity services to properly safeguard clients
• Compliance burdens: Remaining compliant can be challenging with new regulations frequently emerging, so MSPs must serve as virtual CIOs to guide clients through it
• AI and advanced technology: SMBs now have access to advanced tech, so MSPs must deliver expertise in implementing and managing these new solutions
• Outdated software and hardware: Legacy hardware and software is aging out, requiring a widespread initiative toward modernization and opening an opportunity for MSP growth

Clearly, MSPs have an unprecedented opportunity in front of them, but taking advantage of this growth potential will require overcoming key challenges around efficiency, scalability, and service delivery.

Embrace automation

Automation is essential for MSPs seeking to streamline operations. The first step is to optimize business processes through documentation and analysis, as it's challenging to identify areas for automation without clear visibility into the processes that are currently in place.

It's important for MSPs to create maps that detail each workflow step, the roles that are involved, and the time required to accomplish each task. This will allow you to analyze the processes to find bottlenecks or repetitive tasks, and it can help benchmark the impact of automation.

Once the processes are documented, you can introduce automation that specifically addresses the redundant, high-volume tasks that were found. Some examples of targeted automation include:

• Ticket workflow automation: Automatically escalate overdue tickets, route tickets to the correct boards or teams based on criteria, and trigger notifications when SLA milestones are near
• Business logic automation: Flag tickets exceeding defined time thresholds, identify recurring issues that point to larger problems, and collect customer satisfaction feedback using surveys
• IT task automation: Streamline common IT maintenance procedures, automate data backups, system monitoring, and patch management, and leverage RMM automation to reduce technician workloads

The benefits of automation are both numerous and profound—workflows become more efficient, technician productivity increases, and customer satisfaction improves. But, of course, achieving these gains requires optimizing processes first.

Leverage alternative staffing methods

The current labor market poses significant challenges for MSPs looking to scale. The demand for skilled IT workers exceeds the supply, driving up salaries and turnover rates. Plus, hiring and training new technicians requires a substantial investment.

Rather than increasing your headcount to try and solve the problem, it may be beneficial for MSPs to consider alternative staffing models that maximize flexibility. There are several ways to take advantage of alternative staffing models, including:

• Leveraging shared services: Some common MSP services require specialized staff and extensive tooling, which creates high barriers to delivery at scale. Shared service options such as SIEM monitoring, SOC services, help desk support, and backup management can cost-effectively fill these gaps in their service portfolio without a major upfront investment.
• Building a hybrid workforce: Blending internal employees and subcontractors creates workforce agility. Subcontractors can provide niche expertise and handle overflow work during peaks, which helps align labor supply with fluctuating demand. The key is cultivating relationships with skilled, trusted contractors so that MSPs can meet growth goals without exponentially growing headcount.
• Standardizing with consistent toolsets: Minimizing the number of unique technologies used internally streamlines service delivery and allows your technicians to become proficient with that toolset faster. Consolidating onto platforms such as ConnectWise also improves visibility—with data unified in a single professional service automation (PSA), it's easier to identify resource gaps and allocate work efficiently.

Create a culture of excellence

Ultimately, the people behind an MSP determine its ceiling for growth, which is why company culture and the work environment are so crucial. MSPs must not only build an organization that attracts top talent but also foster an environment that incentivizes them to stay. Some strategies for fostering a culture of excellence include:

• Emphasizing professional development: Provide clear career pathways for employees to grow, as employees who feel challenged and valued will often contribute superior work. Be sure to consider your company's plans within your professional development to ensure you're preparing your team for the future, such as priming tier 1 technicians to become project managers.
• Encouraging knowledge sharing: Institute forums for technicians to share insights to reduce duplicate work, speed up resolution times, and improve overall service delivery. This could include Wiki libraries to document common issue fixes, lunch and learn sessions for peer knowledge sharing, chat platforms that facilitate real-time collaboration, and more.
• Focusing on work/life balance: The MSP industry is fast-paced and demanding, so without a proper work/life balance, burnout is inevitable. Leading MSPs encourage employees to recharge and spend time on personal wellness with small perks such as flexible schedules or remote work options. Ultimately, MSPs must foster a sustainable work environment for the long haul to achieve long-term success.

Looking ahead

As the pace of technological innovation continues to accelerate, MSPs are looking for ways they can transform their operations to unlock new levels of scale and efficiency.

By leveraging the key pillars of enhanced service delivery—automation, strategic resourcing, and culture building—MSPs can overcome the challenges of today and capitalize on the opportunities ahead. Those companies that lag in adapting to new risks and opportunities are getting left behind.

We are committed to helping MSPs succeed in this new era. If you'd like guidance tailored to your unique business and goals, look no further. The managed services boom has arrived, and we're dedicated to helping you take your MSP to the next level.