Are Managed Services for You?

From providing on-site services, to creating, managing and implementing IT systems and providing proactive monitoring and support, there are so many types of services you, as an IT professional, can offer your customers.

As you work to ensure that your IT business is both stable and profitable, you are probably assessing the various services you offer your customers to determine the most effective and time conscious means of turning a profit.

As you evaluate your company and the services you provide, we’d like to encourage you to take a look at managed services.

According to global IT small and medium-size businesses (SMBs) research and analyst company, Techaisle, SMBs will spend upwards of $7 billion dollars on managed services in 2011, with an expected shift into double digits over the next few years. That’s huge growth in a relatively short time!

Especially in today’s unstable market, it is rare to come across a services niche that is experiencing a boom in spite of various economic challenges. Breaking the mold however, managed services have been relatively impervious to the dangers of today’s economic instability, as managed services providers (MSPs) continue to see growth in their companies.

Techaisle’s recent study also revealed that more than 1 of every 5 SMBs in the United States (companies from 1 to 100 employees) use managed services to bolster their systems, reflecting the fact that MSPs are increasingly in demand. Moreover, as an increasing number of companies transition to cloud-based systems, managed service providers are also going be increasingly in demand.

Keeping this in mind, it is probably worth it for you to consider whether or not transitioning, either in part or in full, to a managed services business is right for you.

As you contemplate this option, here are some other pros and cons worth your consideration:

Pros:

  • Fixed Payments. As an MSP, your revenue is more secure. Instead of getting paid per job, MSPs are generally paid on a recurring basis, according to contracts (monthly, quarterly, annually).
  • Increase in Sales Opportunities. When managed customers add new equipment or are looking to select or provide care for new equipment, they generally turn to their managed services providers because they already have a relationship with them. Not only do MSPs get to increase profits by helping their customers select equipment, but they also get to add recurring fees to their contract for monitoring additional equipment.
  • Working Remotely. MSPs are in the unique and enviable position of providing proactive support and monitoring to their clients remotely. As such, MSPs can work from their kitchens, some island resort, or while dressed in pajamas.
  • Happier Customers. By providing customers with proactive services, MSPs protect their customers from cataustraphic and disruptive problems, thereby keeping their customers happy and worry free.
  • An Additional Revenue Source. By adding managed services to the assortment of services you provide, you are opening up your business to an additional revenue source.
  • and many more.

While there are a number of enticing benefits to transitioning to an MSP, there are also some cons worth considering.

Cons:

  • Marketing and Sales. MSPs face fierce competition and an arduous processes of promoting their services, attracting perspective customers and signing clients. Until MSPs have signed a number of customers, they face the financial burden of having a lackluster clientele.
  • Ensuring Profitability. In spite of managed services being a less risky business venture because of recurring contracts, MSPs face the challenge of knowing how to define their pricing to ensure their businesses’ profitability. It is difficult to know how much to charge for your services without knowing how much time and energy it will take to provide the agreed upon remote monitoring and management (RMM) services.
  • Start-up Costs. Like all business start-ups, MSPs face the costs of RMM tools, licenses, monthly fees, and additional training.
  • Change. Whether you are considering converting to a managed services business or adding managed services to your current IT business, you any change to your business structure requires a lot of work. To accommodate your managed services, you would need to make changes to your workflow, time management and billing system – all of which are doable but time and work intensive.
  • and additional risks and difficulties involved with such a transition.

While you consider the advantages and disadvantages of offering managed services, it is important to remember that even though MSPs are currently in demand, services providers across the IT industry, not just MSPs, can secure for themselves a returning and satisfied client base and a lucrative business. The biggest keys to success, more than industry trends and forecasts, are being good at what you do, doing your job well, and getting enjoyment from your work.

As long as you take pride in your work, greet your customers with a smile, and do your job well, your customers will appreciate you, the services you provide, and the business you represent.

So whether or not you decide to incorporate managed services in your business, remember to do what you do well, and enjoy what it is you do.

In the long run, this is the most reliable path to success. However, it is important to remember that we live in an ever changing world. While potentially intimidating, it is always worth it to recognize the changes happening around us and figure out how to make our work contemporary and beneficial to us and the customers we serve.

Maybe managed services is the gateway to your future role in the IT services industry?

Until next time,
Success Team

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