The path to digital maturity

The growth of a Managed Service Provider (MSP) usually follows a distinct pattern. It starts with a modest number of customer accounts and a high ratio of support agents, essentially over-servicing the customer to make sure they stay happy and have no reason to go elsewhere. Most of the tasks and processes remain manual and laborious but, in recognition of the error-prone nature of working in this way, the team is dedicated to fixing any problems immediately and demonstrating fast response times.

The small MSP will typically run disparate internal systems and applications to serve those customers, and although this means effort is often duplicated, it’s not operating at full capacity, so the situation is manageable, although far from efficient. The objective is to serve the customer in any way they can, which may include a high level of customisation to serve specific customer needs. This may even develop into a deep understanding of one or a small number of industry sectors.

However, as the MSP grows and acquires more customers, it becomes apparent that over-servicing each one will start to put the engineering and support teams under significant pressure, which will negatively impact their performance. Maintaining the standard of service established with early customers would require a significantly sized engineering operation that would have to grow exponentially in line with customer demand. This operating model is simply not affordable or sustainable.

Changing ways of working by streamlining processes and automating tasks have huge benefits for tech service providers. According to research from MIT, digitally mature organisations are 26% more profitable than their less mature peers. Yet, while MSPs make it their business to advise clients on their digital strategies, it’s clear they also need to adopt the same practices in-house, if they haven’t started already.

How customers drive the need for change

Savvy customers frequently assess MSPs on their level of digital maturity before buying from them. Customers put a significant focus on the quality of their experience and according to Forrester, companies that lead in customer experience outperform competition by nearly 80%.

The technological capabilities of an MSP can be better understood by prospecting customers by examining its portfolio of services, customer reviews, and success stories. However, customers want to work with MSPs that also use the latest technology, tools, and software solutions to run their business internally. It’s simply not enough to offer the latest products and services. Internal factors are so important that they are considered of equal importance to understanding an MSP's pricing structure and value proposition.

How can digital transformation ease the burden?

There are many operational and financial performance benefits to digital transformation for companies in all industry sectors, but especially for tech service providers. Perhaps the most significant improvement is the ability to stay ahead of the competition.

By embracing new technologies and implementing more efficient automated processes, service providers can differentiate themselves, offering clients better and more innovative services with an unmatched customer experience. Improving efficiency by adopting a scalable and integrated operating model that embraces service automation helps reduce costs, while improving service levels, resulting in high levels of client satisfaction. It is also a pathway to sustained profitability for the long term, because as the business continues to grow its customer base, it no longer has to exponentially increase costs to serve them.

Tips on how to approach transformation

Getting to grips with digital transformation can be a daunting task. However, with the right approach and strategy, it is possible to get it right the first time. Here are some steps that MSPs can take to implement digital transformation and create a blueprint for success in the process:

· Assess your current state: The first step is to assess your current state. This includes looking at your technology stack, business processes, and service offerings. Identify areas where you can improve and prioritise these areas based on their impact on your business.

· Define your goals: Once you have assessed your current state, you need to define your goals. This includes identifying what technologies you want to implement and how they will improve your service offerings and business processes.

· Create a roadmap: With your goals in mind, create a roadmap that includes timelines, milestones, and key performance indicators (KPIs) to measure progress.

· Implement your plan: When implementing your plan, you may need to find a partner to work with that is experienced in the MSP sector. You may also need to hire and assign resources to the project and invest in new technologies. It's important to monitor progress and adjust your plan as needed.

· Continuously improve: Transformation is a never-ending process of continuous improvement, so remember to factor this into your cultural and organisational development. It will be important to help staff develop existing and new skills, as well as create defined career paths for them.

Get to value quickly

Executing a transformation plan requires dedicated time and resources, but how do you manage it? You can go it alone, taking full responsibility for the outcome as well as all the risk, or you can find help from a specialist partner that knows your industry and can help de-risk the project. In either case, it is important to demonstrate value to your customers and back to the business in terms of increased performance as quickly as possible. Once this is done, you can then continue to improve operations from there.

Digital maturity allows tech service providers to quickly adapt and respond to changes in the market. Your digital capability can redefine your operations and efficiencies to give you that competitive edge. When assessing digital maturity, consider the needs of all who are connected to your business,

internal and external stakeholders, customers and third parties, and then develop a strategy that has growth and collaboration at its core.