by Mike Puglia, Chief Product Officer, Kaseya
The future for the managed services sector continues to look healthy. Recent research from analyst, MarketsandMarkets projects that the market will grow from US$145.33 Billion in 2016 to US$242.45 Billion by 2021, at a CAGR of 10.8%. However, in spite of that, many managed service providers (MSPs) are struggling to keep up to speed with this rapid growth while many others would like to be growing even faster.
In reality, though, that’s often a difficult, complex challenge to address. To take on new clients, an MSP’s technical solutions, such as remote monitoring and management (RMM) software, have to scale rapidly as do internal and client business issues such as contracts, billing and project management. That’s where Professional Services Automation (PSA) solutions built specifically for MSPs come in. These tools can drive efficiencies and bring discipline to business functions, but they can also help providers both to achieve their growth goals and better manage that growth.
Many MSPs struggle here because they do not have an MSP-specific PSA in place. Some, typically the smallest ones, take the view that they can’t afford a PSA at all. In reality though, it is often the smallest MSPs that need a PSA the most. In small businesses, the owner is often the main sales person who is at the same time ‘tied-up’ handling projects and driving growth.
Without a fully-functioning MSP-specific PSA, it can be difficult for MSPs to accurately perform key tasks like tracking and managing billable hours, for their clients. Another drag on growth is the inability to plan for recruitment because projects can be too unpredictable. All of this hampers a range of operations from forecasting to new services creation, and from staff recruitment to budgeting.
The lack of an effective PSA is a serious issue for many smaller MSPs. But a wide range of MSPs who have implemented PSA solutions also face concerns. Typically, that’s because they have implemented legacy, first-generation systems that have insufficient agility to support their drive for growth. It’s a serious concern. First-generation systems are typically costly, built with obsolete technology, and loaded with unused features that frequently prevent employees from doing their jobs properly. Typically also, they were built for general purpose use rather than specific applications. In short, they are no longer fit for purpose in today’s fast-moving MSP environment.
Later, PSA tools were created especially for IT implementations. As these focused on technical projects and tasks, it represented a step forward but, for MSPs, it was not sufficient in and of itself. Solutions built for internal IT departments are overly generic and designed to be used by dozens of vertical markets. Moving forward, what is needed above all is an MSP-specific PSA. To illustrate this, let’s review some key business process challenges and consider the benefits that a next-generation, cloud-based PSA can bring.
The success of any MSP depends on the effectiveness of their RMM solution. It’s within the RMM that the work of monitoring, maintaining and fixing IT systems takes place. Meanwhile, the PSA is where the vital details of running a services business happens – tracking time and expenses, managing projects, handling billing and finances, managing the service desk, and performing CRM tasks.
Integration between the RMM and PSA is one measure of a next-generation PSA solution – and one indication that such a technology has been built with MSPs in mind.
The Right Cost
MSPs use PSA software to become more efficient in how they manage their business. But the PSA, unlike an RMM, does not drive new revenue streams. That makes it still more important that the chosen PSA tool is inexpensive, and has the functionality that the MSP needs today and into the future. This way, service providers can invest profits into new services and staff that will drive new revenue, rather than put more money into the PSA software itself.
It’s important to note here that the application cost is just one aspect of the true cost of a PSA. MSPs must also consider how much the software costs to administer, implement and manage. Here is another area where legacy PSAs fall short – they are too cumbersome (and, consequently, too expensive) to use. This is because the MSP tries to get them to do things they weren’t designed for, while at the same time trying to cut through the clutter of irrelevant functionality.
In contrast, a next-generation MSP-built PSA focuses just on what MSPs need to accomplish. This lowers the administration burden – by as much as 80%: a serious staff cost saving and, at the same time, a boost to efficiency. Additionally, a PSA purpose-built for MSPs is easy-to-use for all MSP employees, including office managers, sales personnel, technicians and billing professionals, and consequently reduces the costs of training new staff.
Ultimately, it’s more than just a question of cost. A PSA tailored specifically for MSPs makes project management more streamlined and intuitive. Such a PSA won’t simply let the MSP handle outsourced clients, it will help the provider win them as well, by enabling the MSP to be fully equipped to handle new client on-boarding transitions, thereby demonstrating the PSA’s ability to manage additional, more complex projects.
Why Flexible Architecture Matters
Providing a flexible, cost-effective integrated MSP-specific solution, of course, is just as much about having a flexible product platform and architecture as it is about rich functionality. To drive productivity and efficiency, next-generation PSA tools need to support an open systems platform with easy integration into the broadest range of client service delivery tools including remote monitoring and management, network/system management, security and cloud management systems. Further addressing the limitations of first generation PSA offerings built on ten to twenty-year-old technology, next generation solutions should utilise a cloud-based approach that provides authorised access from any web-enabled device at any time – further reducing the cost and effort associated with complex legacy PSA implementations.
This kind of flexibility is key. To achieve efficiencies, MSPs need to minimise money spent on non-revenue generating products and activities. While first-generation PSA solutions are expensive, typically built with obsolete technology and loaded with features that hamper employees from doing their jobs, next generation tools are cost-effective, scalable and business specific. This drives not only productivity but also competitive edge for many MSP organisations today.