How to Fix Your Inefficient Partner Business

The advent of cloud technology has brought about countless benefits, but also means a bit of a juggling act for managed service providers (MSPs) who must step up their service game without hiring more folks to keep the balls in the air.

In this era of business transformation, it is critical to run your operation as efficiently as possible to turn revenue into profit. Enter automated tools. From technical applications such as remote monitoring and management (RMM) and professional service automation (PSA) to line-of-business applications such as customer resource management and customer portals, automation has the potential to help MSPs run their businesses more efficiently.

But are MSPs using these tools? Are they doing all they can to streamline operations?

According to findings from CompTIA’s recent research, Operational Efficiency in the Channel, just two in 10 respondents assessed their current state of operations as very efficient. Not great when you consider all of the emerging technologies and tools out there.

So why don’t partners have faith in their own efficiency? We sat down with CompTIA senior director of industry analysis Carolyn April, who authored the report, to get her insights on the matter. At Channel Partners Evolution, Oct. 9-12, in Philadelphia, April will speak to conference attendees about the importance of staying as lean as possible in her session “Running a Tight Ship: The Impact of Operational Efficiency on Profits.” It’s Wednesday, Oct. 11, part of the business strategy track sponsored by Cyxtera.  

Channel Partners: Tell us about the CompTIA study that will serve as the backbone of your talk at Channel Partners Evolution.

CompTIA’s Carolyn April

Carolyn April: We did a primary research report on operational efficiency. It was over 100 channel firms, and we asked them all kinds of questions about their business and how they’re transforming it, how that process is going. [We] asked them to rate themselves on how efficient they think they’re running their business, what areas that they can improve. The big takeaway, I think, from this particular study, is that you can have the greatest sales staff. They’re killing it out there, and they’re bringing in money hand over fist, but if you are leaking all kinds of margin due to internal inefficiencies, you’re not going to see the full reward of all that great work that your sales reps are doing.

CP: No offense, but this isn’t the type of flash we typically hear about at channel conferences. Where are the snazzy features? The bells and whistles and promises of never-ending glory?

CA: It sounds very wonky, right? But it’s extremely important to your bottom line. A lot of the times you’re talking about ironing out a particular process for on-boarding a new customer or on-boarding a new employee, or what your supply chain would look like. All stuff that’s sitting around a conference table and just banging that stuff out and then making sure you have …
… a top-down message to all of your staff that everybody follows these repeatable processes, because it doesn’t work if you’ve got a bunch of rogue staff that don’t fall in line with how you’ve outlined the way that things are going to operate.

It’s unsexy stuff, but you’ll see a huge boost in your margin because you’re going to be containing your costs. You’re going to be running your organization as efficiently as possible so that you’re going to be able to hold onto as much money as possible.

CP: Let’s talk actionable insights. What are some things that MSPs can go home the day after the conference and start to put into place?

CA: Many companies, creating repeatable process, obviously that’s important, and those processes should extend not just internally but out to your customers and how you deal with them, to your suppliers and to your vendors. That’s probably the No. 1 thing that the respondents to the survey said that they were doing to streamline operations. The other thing was to allow management-level staff to have more access to actionable type of data, financial performance data, and be able to have the authority to make direct changes in real time for business activities. Invest in professionally trained sales staff. That was another one. A lot of companies, especially small channel firms, don’t do this, and they learn on the fly. They’re not really professionally trained salespeople who then continue to do professional development within their career, and these folks may initially demand a higher base or whatever it is you’re paying them, but they tend to be much more effective.

Allison Francis contributed to this report.