Achieving “operational efficiency” sure sounds like something every MSP (managed IT services provider) should want to do. It implies a smoothly run operation that is operating at peak levels of performance and thus optimizing all the resources on hand. We oftentimes talk about MSPs needing to “achieve operational efficiency”, but what exactly do we mean by that and how do you actually accomplish this as an MSP?
The textbook definition of operational efficiency reads something like this, according to an entry on Webopedia.
Operational efficiency is the capability of an enterprise to deliver products or services to its customers in the most cost-effective manner possible while still ensuring the high quality of its products, service and support.
Operational efficiency is often achieved by streamlining a company's core processes in order to more effectively respond to continually changing market forces in a cost-effective manner.
In plain English, a company that operates at a high level of operational efficiency is streamlined, measured and always optimizing their day-to-day operations. At an even more simple level, companies that are operating at high levels of operational efficiencies are lean, mean fighting machines. This helps companies reduce costs and increase their profitability.
Why Operational Efficiency is So Difficult
Most businesses would love to claim this title, but few do. Why? It’s just not easy to do. In fact, some companies have entire teams solely responsible for managing and improving internal operations.
Efficient operations can be especially difficult to achieve in the managed services provider space. As an MSP business owner, you have many other areas of your business to worry about. There is no cookie cutter approach to the MSP business and, like many other industries, each business has its own unique challenges and opportunities. Therefore, there’s no one-size-fits-all approach for creating efficiencies. However, there are some strategies you can leverage as an MSP that allow you become more efficient, and thus, more profitable.
Strategies for Improving Your Operations
Let’s take a look at a couple of options to consider which may help you achieve a level of operational efficiency in your business that you never dreamed possible. Keep in mind, these solutions are not simply magic pills. These are processes, not events. But sticking to these strategies can lead to many benefits for your business.
1. Use Products That Scale
One problem many MSPs encounter is that they implement custom solutions for each client. It’s definitely important to tailor your solutions based on the client’s needs, but you should leverage products that don’t force you to re-invent the wheel each time. If you do, growth is stymied and efficiencies are sacrificed.
Find products and services that can be repeated (maybe with minimal tweaks for ‘customization’) across large numbers of customers. Make sure you use a solution that allows you to onboard clients quickly and configure devices efficiently. The more clients you bring on, the more that this system will pay off for you.
2. Increase Devices Per Technician
In other words, automate where you can. Repeatable and consistent processes often require less people. The upside is that automated processes are predictable and can be relied upon. They run without someone being here. The downside is that when the human element of a high touch business is removed trust can erode and that leads to strained client relations. Make sure you don’t become too remote from your clients.
One of the best ways to become more efficient is increasing the amount of devices your technicians can handle. Employees are necessary, but they are expensive (even just finding talent for your business can be one of the largest hidden cost most MSPs don’t notice). If you can onboard more clients without needing to hire new technicians, that helps to eliminate a large cost for your business.
Finding ways to expand your capabilities as an MSP without needing to expand your staff will help you become more efficient as a business.
3. Pay For What You Use by Outsourcing
Find products and service providers that use a pay as you go method of delivery to you. The less you have to invest upfront the less risk you take on as a business. If you lose a client or they decided to downsize their services, you’re on the hook for the extra technicians you’ve hired that are now not being utilized.
All MSPs should consider outsourcing portions of their business. For example, outsourcing your service desk allows you to provide 24/7 support to your clients without taking the huge costs of hiring and maintaining an in-house service desk. Because the nature of service requests is so volatile, it’s very difficult for MSPs to maintain the correct level of technicians that ensure minimal wait times, yet doesn’t waste money of technicians being under-utilized. This is why outsourcing your service desk is such a popular option for MSPs.
Another outsourcing option for MSPs is utilizing a Network Operations Center (NOC). A NOC is an extension of your tech team, and again, enables you to pay for what you use instead of taking on risky staffing costs. And when you can combine your NOC with your RMM platform…that’s where the magic really happens.
4. Eliminate Redundancies
This may be a painful process but it may be one of the most important you will ever do. Nothing is less efficient that having two people doing the same job while other tasks are left undone. Clearly define where each employee should and should not work.
Again, this is where a NOC will benefit you. Instead of having multiple technicians receiving the same tickets and working on the same issues, you can utilize a Network Operations Center, which will monitor, resolve and prioritize tickets for your techs – and eliminate the redundancy of multiple techs working on the same issues.
There are many more ways to help achieve operational efficiencies that will allow more money to drop to the bottom line. It is often the business owner who is confident enough to take some stern steps needed to make sure his or her business is running the best that it can.