Like any business, management service provider firms are always looking for ways to reduce MSP costs and improve profits. MSPs provide critical services to their clients, so finding ways to cut costs without cutting corners is essential.
You’ve probably heard all the standard advice on cutting costs: review your pricing, renegotiate contracts, cut unnecessary expenses, and so on. But what about MSPs who are already doing all those things and are still looking for ways to save?
We asked our MSP clients for some truth on how they’ve been able to reduce MSP costs. And the results were pretty interesting but had one common denominator: network monitoring and management software (NMS) is a crucial component to maximizing cost savings in a modern MSP.
Side note: Since we happen to be one, and our clients happen to us, we’ll be using Auvik as our example (and if your network management software isn’t measuring up, here’s your opportunity to see what you’re missing!)
Here are a few MSP cost-saving tips based on real feedback from MSPs who use Auvik.
Improve Your Client Onboarding
Client onboarding is a time-consuming task. With good NMS, MSPs onboard clients faster, as solutions like Auvik automate many tasks that would otherwise need to be done manually. For example, our MSP customers told us that onboarding a client is far more efficient, as the platform’s automated discovery process is easy to use and has an intuitive graphical interface.
What does this mean for MSPs? Owners and salespeople can deploy the product without needing expensive technicians at a client’s location. Technicians can instead spend their time working on more critical tasks. This saved time can be used to onboard more clients, or provide other services to existing clients, leading to increased revenue.
Reduce Truck Rolls
Our MSP customers have also found the remote, cloud-based design of Auvik’s network management software to be highly effective in helping them slash MSP costs. With Auvik, MSPs no longer need to be physically on-site to solve issues for their clients, leading to significant cost savings for MSPs, as gas expenses and time spent on truck rolls are significantly reduced. Troubleshooting becomes a matter of minutes, rather than an entire day dedicated to one client’s issues.
It also allows MSPs to work with clients anywhere in the world, expanding potential business opportunities. With Auvik’s remote management capabilities, you can reduce MSP costs, improve service margins, and gain access to new business opportunities.
Empower Your Employees
Clients have also discovered the platform to be user-friendly enough that they don’t need to rely on senior technicians to troubleshoot and resolve every problem. Instead, with Auvik’s tools, lower-level technicians can investigate and solve many problems themselves, reducing both Mean Time to Resolution (MTTR), and the need to constantly include high-priced resources. This allows MSPs to reduce their costs by improving technician utilization.
Not only do MSPs save money and improve service margins, but they’re also able to improve their service quality and customer satisfaction. Auvik also helps empower staff, leading to higher engagement and productivity. And this translates into even more cost savings for management service provider firms.
Automate Network Documentation
For MSPs, manually collecting and organizing network documentation can be time-consuming and inaccurate. MSPs need to be able to rely on their network documentation to make informed decisions about their client’s networks, but manual processes leave room for error.
Auvik’s network documentation features allow MSPs to follow best practices for network documentation, like automatically collecting and organizing information about their client’s networks in a central location, dynamically updated every time something changes. MSPs can avoid the wasted time and effort associated with manual documentation processes. It also ensures that management service provider firms always have accurate and up-to-date information about their client’s networks without constantly checking and updating their documentation.
Auvik’s customers have found that automating their network documentation results in significant time savings, allowing them to reallocate staff to more revenue-generating activities.
Reduce the Number of Vendor Relationships
As a managed service provider, juggling multiple vendors to access the necessary tools for your clients can be time-consuming and expensive. MSPs need access to various tools to provide the best possible service to their clients, but the costs associated with maintaining multiple vendor relationships can quickly add up.
Looking for more information on the vendor landscape for MSPs? Download Auvik’s 2021 Vendor Diversity Report for free.
There’s also the issue of compatibility. MSPs need to be sure that not only are the tools they’re using working well together, but legacy devices won’t create additional problems down the line. And that’s not always easy to determine when dealing with multiple vendors.
Implement an Efficient Client Hardware Lifecycle Strategy
When it comes to ITAM (IT asset management) for clients, there are often hidden costs associated with keeping older equipment in use. MSPs need to be proactive in managing their client’s hardware to avoid these costs, and Auvik’s clients have found that our platform is an invaluable tool in helping them do just that.
Auvik’s deep network discovery process provides detailed lifecycle data from supported devices to show you whether they’re on current or expired support contracts, whether there are more up-to-date software versions available if devices are eligible to receive critical security updates, and if devices are still available for purchase. This helps MSPs avoid the unplanned costs associated with unexpected hardware failures and stay ahead of the curve regarding their client’s IT needs.
MSPs can proactively discuss upcoming hardware needs with their clients by presenting a lifecycle report and identifying supply chain consequences, such as end-of-support dates. As a result, MSPs can build strong relationships with their clients based on trust and transparency, resulting in increased net revenue retention rates, meaning MSPs can reduce MSP costs while also growing their business.
Plus, MSPs can use Auvik’s platform to centralize all their client’s documentation in one place. This allows MSPs to get a clear picture of their client’s entire IT infrastructure and to make informed decisions about which hardware needs to be replaced. A centralized information repository also helps MSPs avoid the duplication of effort and wasted time associated with managing client information in multiple siloed systems. The result is a more efficient and cost-effective MSP operation, with the bonus of improved customer satisfaction.
Other Tips to Reduce MSP Costs
Some other tips that management service provider firms can implement to cut MSP costs include:
Achieve Reliable Cost Predictability
As an MSP, it’s essential to accurately calculate the costs associated with monitoring services for a new contract. This includes staffing expenses, hardware costs, and software licensing fees. It’s important to consider not only the initial cost of monitoring the network as it currently stands but also factor in future growth. Otherwise, firms may find their MSP costs soaring and their margins shrinking.
To avoid this, MSPs must clearly understand the client’s network before drafting a proposal. This includes knowing which devices must be monitored and understanding how the network is currently being used. MSPs should also create proposals that include a mix of one-time and recurring fees to provide the most accurate estimate of MSP costs.
Auvik can help MSPs reduce MSP costs by providing an in-depth understanding of the client’s network. The platform provides MSPs with complete visibility into current network usage and which devices need to be monitored. This information can be used to create more accurate proposals.
Implement a Standardized Offer
To maintain streamlined and efficient operations, managed service providers should establish a standardized software and hardware stack. This not only simplifies the process of supporting multiple clients but also cuts costs by reducing the need for individualized solutions. Standardizing the stack allows for improved compatibility and reduces the likelihood of technical issues arising. However, it is important to regularly assess and update the stack to keep up with changes in technology and ensure that clients are receiving the best possible support. Overall, a standardized stack can greatly benefit MSPs in terms of both efficiency and cost-effectiveness.
With Auvik, MSPs can standardize their stack and reduce MSP costs by leveraging the platform’s comprehensive set of features. Auvik provides MSPs with everything they need to manage their clients’ networks, including automated discovery and mapping, alerting, config backups, traffic insights, and more.
Adopt a Hybrid Work Strategy
One potential cost-saving measure for MSPs is to give up traditional office space and adopt a hybrid work approach. While some in-person workspaces may still be necessary, many large corporations have proven the effectiveness of employees working from home. This not only saves on physical office expenses but can also increase employee satisfaction and productivity. Adopting remote work capabilities can make it easier for MSPs to hire and retain talented team members no matter their location.
Auvik makes this extremely easy to achieve due to its remote management capabilities. MSPs can use Auvik to monitor and manage their clients’ networks from anywhere in the world. This makes it possible to adopt a hybrid work strategy and reduce MSP costs without sacrificing the quality of service.