The Perpetually Valuable MSP: Determining What Should Be in Your Portfolio

By MAXfocus Guest Blog 1

Each month, this column has been exploring the concept of the Perpetually Valuable MSP and covered the best practices related to it.

One of the key tenants of the Perpetually Valuable MSP is the idea of adding and removing solutions when it makes sense. Knowing when to stick with a solution offering and when to get out of a solution offering should not be a guessing game–nor should it be based on gut feelings or isolated good/bad experiences. If an MSP can develop a calculation that measures the relative value of a specific solution to the other solutions currently offered, as well as to potential new solutions, decisions about when to launch and when to decommission can be very reliable.

A common approach to prioritizing and managing investment options is known as Portfolio Management. This concept is built on a multi-dimensional analysis of key criteria, and has been well documented and demonstrated through management methods such as The Boston Consulting Group Market Matrix. (Do a Google search–you’ll recognize the four-box matrix with categories including MVP, Diamond in the Rough, Cash Cow and Laggard. The portfolio matrix we’re defining here is not the same, but it’s based on the same principle of comparing more than one element of the business opportunity to prioritize rather than simply rank the options.)

The key to applying this method to the portfolio of current and potential offerings included in the business model of a Managed Services Provider is to define the relevant metrics. What countable factors of business performance can be used to measure the value of each offering in your portfolio?

Our research process uncovered three specific metrics that indicate the value of a specific offering:

It is crucial to note that all three metrics are relative to your specific context, meaning there is no single ranking of which offering is more valuable or less valuable. It depends on you: who you sell to, how you sell and how you operate.

For some MSPs, mature offerings like remote monitoring for servers or helpdesk or security patch management may be very valuable and justify a high priority in their portfolios, while for different MSPs those very same services may produce very little value and should be de- emphasized. It depends on you, your customers and your capabilities.

So which offerings should be in your portfolio? To determine this answer, you need to conduct an analysis of your bottom line results as well as your operating effectiveness.

Using this methodology actually ensures that you are making sound decisions about your practice based on actual business performance. Building your portfolio of services has always been part of the managed services delivery process, and this methodology systemizes that, playing to MSPs’ strengths for systems. Building the Perpetually Valuable MSP takes investment, but ensures the long-term viability of an MSP’s business.

Dave Sobel, Director of Partner Community at MAXfocus, is responsible for fostering the growth and success of MAXFocus Partners. As Director of Partner Community, he helps promote collaboration, education and innovation among MAXfocus Partners and among the industry as a whole, ensures they have access to business, technology and market resources, and are utilizing the MAX Platform to achieve positive growth, enhance their offerings and become best-in-class solution providers. Guest blogs such as this one are published monthly and are part of MSPmentor’s annual platinum sponsorship.