Why Business Agility is Key to Sustainable Growth for MSPs

The industry has long talked about the value of the managed services model, and focused on the business value to both the end customer and the MSP of this transformation. The MSP model is intended to bring customers and providers closer in alignment by having their goals in sync. Both parties get predictability from a financial perspective and in the reliability of the network. On top of this, both have better control over their resources, better insight into the other and access to best-in-breed technologies to deliver on their promises. 

For all the talk of managed services, what hasn’t been addressed has been how to truly continue to innovate within the model and ensure the ongoing viability of the business. In our research, we have highlighted three core characteristics of the most successful MSPs:  

1. A focus on operational process discipline. These MSPs are built on a foundation of repeatable processes and the commitment to address and resolve big or small issues via process management. Exceptional MSPs excel at this.
2. A deep understanding of customer requirements. This means looking beyond pure technical skills, instead focusing on business outcomes as part of the delivery process. 
3. Insights into market conditions and technology progress. MSPs at the top of their game can use this information to develop new products and offerings in a way that benefits both their customers and themselves.

Our vision is bringing together all the traits required to build MSPs that will not only focus on the first two points, which have traditionally been key strengths for services providers, but also to help them embrace the third: bringing new innovations into their businesses. There is a basic formula for this business agility that we believe is the key to ongoing success. We call this the Perpetually Valuable MSP Model.

Measuring Business Agility

Business agility can be measured as the present fitness of the organization combined with future vision, and multiplied by agile development. The ability to change and adapt has not been traditionally built into the core MSP model, despite the need for constant adaptation. We have identified a business strategy formula that integrates that continual ability to adapt: Business Agility = (Present Fitness + Future Vision) x Agile Development.

• Present Fitness of a business is its ability to optimize performance in current operations. These MSPs are built on a foundation of repeatable processes, and the commitment to address and resolve big or small issues via process management.
• Future Vision is the ability to identify and understand new opportunities that will provide value for your business and for your customers, and plan a roadmap and timeline for adopting relevant options.
• Agile Development is the skill of assessing the impact of market drivers and taking fast, deliberate action to incorporate new offerings, retire offerings that are no longer valuable, and maintain predictable results.

Execution of this formula can be achieved through a number of different techniques. Most solution providers are naturally inclined towards the first two, but are often weakest in the third. This is ironic considering that the idea of agile development is a management concept developed within the IT market.   

To address this, we focused on finding patterns that identify the traits of those strong in agile development, and then understanding how they employed them to create the complete business agility package. These best practices are key to building MSPs that execute.

Among these best practices, we find that these perpetually valuable MSPs have made changes to the way they plan and forecast. Rather than conducting slow, complex annual planning processes, these companies adopt a more responsive quarterly planning cycle instead. Long-term forecasts are then adjusted according to real-time feedback, and experiences and updates are planned on an ongoing basis throughout the year.

By shifting to a quarterly type process, the organizations vision and direction can be established for a full 12 months, but it remains nimble and flexible. Plans are adjusted based on market conditions, customer needs, business changes and external forces. These plans are adaptable and always relevant, ensuring they are a core part of the business operations.

These MSPs also engage their customers differently. While they seek and review customer feedback on technical offerings and services, these providers also engage nontechnical leaders and users in conversations that deliberately avoid mentioning technology. These meetings focus instead on what the customer is trying to accomplish from a business perspective. Creative responses to business challenges often take the form of technical solutions, but they must not be initially conceived within the boundaries of current technical capabilities. These nontechnical discussions bring business outcomes to the forefront. Focusing on business outcomes ensures that the MSP is delivering.

Adding business agility as a focus for an MSP creates a business model that is perpetually valuable. The possible downside to standardization and process excellence is that the MSP runs the risk of not continuing to innovate. A drive to standards with a goal of maintaining consistency runs counter to the desire to be agile. Finding a balance of uniformity and agility helps create an MSP that is always valuable to their customer, always relevant regardless of technology, and stable for long-term growth. Building these MSPs is our vision for the channel.