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5 Ways to Improve Your MSP Service Level Agreement (SLA)

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5 Ways to Improve Your MSP Service Level Agreements (SLAs)

SLAs are the foundation of your MSP business. They are essential to building strong client relationships and must be clear, reasonable and well-constructed.

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Why Every MSP Should Be Practicing ‘Smart Sourcing’

Posted September 2, 2014by Matt Waters

Wicked-SmartImage Source: http://marilynmonbro.files.wordpress.com/2012/06/wicked-smaht.gif

As a business owner, your business means everything to you. Giving up control over any portion of your business can be very difficult, especially for MSP owners. It’s one of the main reasons that many have started MSPs, and is why MSPs don’t like the idea of outsourcing any part of their business – because it means giving control to someone else.

However, in order to be successful, sometimes we need to let go of control. Here’s why.

Most MSPs (as is the case with most businesses) are focused on growth. However, the need for control can often inhibit your growth. When you come to this point (and it doesn’t take too long), you should be considering the option of outsourcing portions of your business to become leaner and continue growing.

What is Smart Sourcing?

Outsourcing can be a swear word for many, especially to MSPs, but it’s a very real component of business success. By definition, outsourcing involves shipping portions of your business off to be completed by individuals outside of your company. Many MSPs don’t like losing this sense of control, which is why they hesitate at the thought of outsourcing parts of their business, especially when it comes to their service delivery.

But what if the all or nothing sense that the term ‘outsourcing’ implies could be replaced with the concept or smart sourcing.

Smart sourcing is the idea that you should be allocating your resources most effectively as possible. No circumstance is ‘all or nothing’. In fact, it might be most prudent and fiscally effective to ‘cherry pick’ parts of your MSP business that could be handed off to another provider simply because they are the most expensive and least productive elements of your business.

Think of it this way: outsourcing is handing off portions of your business to a party outside of your company, smart sourcing is handing off activities to a party outside of your company. Sometimes, it just makes more sense to have someone else complete an activity rather than do it in-house, as it takes up time and resources.

Maintaining control over every piece of your business can actually slow you down as a business owner. Do you worry about taking on new clients because you won’t be able to find the technical talent or be able to support them after business hours?

If so, you should be looking to smart source certain activities of your business.

So what are some of the areas that you might consider for smart sourcing? Let’s look at a few.

Please note, as it is with most lists, this is not all-inclusive and you may know of other areas that would make sense for you to hand over to another party. That’s awesome! If nothing else, we hope that your reading of this material evokes deeper thought about your business which ultimately leads to growth and profitability. Now back to that list.

1. Maintaining a 24/7 help desk

This is one of the hardest areas for MSPs to give up. They want to be the ones to assist their clients when they need help. However, this is also one of the areas where it makes the most sense to smart source.

A great example of smart sourcing is having your technicians handle support from 9am-5pm, then offloading that help desk function for non-business hours to an outsourced, white-label help desk.

Staffing around the clock is incredibly costly for MSPs, yet there’s no telling when an issue may arise. With this solution, you’re not waking up at 2am to answer support calls, yet you’re also not paying a full-time technician to be up around the clock.

This is a smart way to allocate your resources to ensure the 24/7 level of service that is required.

2. Preventative maintenance and Project Work

What technicians look forward to performing standard IT tasks like patching updates, windows updates, directory migrations, Office 365 migrations etc. The chances are that you’re paying your technicians good money. Make sure that they’re performing work that is billable and not changing passwords and managing server patches each month.  

The more your technicians get caught up in these activities, the less fulfilled they will be with their work. Turn these basic IT tasks over to a Network Operations Center (NOC) for more cost-effective completion. Better yet, turn your technicians into “NOC Managers” and have them manage the tickets and work they send to the NOC. If they can’t address a ticket within an hour they should have a NOC team on the backend to send the ticket to. This will allow your technicians to breathe and keep them from managing alerts all day.

Again, this is a smart way of allocating your resources, and does not involve an “all-or-nothing” approach. Let the NOC take care of the routine IT projects, and keep your technicians free to focus on complex, revenue-driving activities, which is what they’re good at doing. It also helps you turn your technicians into project managers.

Additionally, you won’t need to worry about staffing up for big projects. A skilled NOC has the expertise that you need on hand; you just need to give them the assignment. No more scrambling for technicians last minute and then wondering what to do with them once the project is complete.

3. Marketing

Most MSPs don’t really think about marketing, let alone outsourcing it. Yet, marketing is an important investment you need to make in your business in order to drive growth.

However, marketing can be expensive. Typically you’ll need a full-time employee and then all they do is ask for more employees. The concept of smart sourcing can be applied to marketing as well.

It’s pretty easy to make the argument for having a full-time marketing member on staff. They work in-house and understand your business much better than outsourced marketing help. However, there are portions of your marketing strategy that you can outsource that are much more effective than hiring someone full time.

For example, should you hire a full-time social media manager, or should you turn that over to a local agency to manage for $100/month? Is there an organization that can take a look at your contact database and run some monthly email campaigns for a low monthly fee? Can you get freelancers to write blogs for you for $50/post?

Think about what things you’re not doing on the marketing side and how you can effectively and efficiently get those done through smart sourcing.

Conclusion

So while this list may be short, it’s important to understand the concept of ‘smart sourcing’. No one is asking for MSP owners to give over complete control of their business. That would be unreasonable. However, in order to become a better business owner, you need to always be thinking about return on investment. Can you get the same work done at a much lower cost somewhere else? Make sure you are constantly asking yourself these questions and exploring new ways to grow your business.

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Having been with Continuum since 2011, and currently overseeing our Partner Development and Channel Development teams, Matthew understands the pricing struggle and has worked firsthand with partners to overcome it and grow their profitability.

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