One of the things we at IT Glue wanted to accomplish with the production of our inaugural Global MSP Benchmark Report was to identify what a top-performing MSP looks like. There were certainly some surprises—such as the reality that size doesn’t matter—but a lot of what we found was fairly intuitive.
In this rapidly growing industry, there are around 20% of MSPs that are seeing both high growth (10%+ per annum) and high margins (20%+ net margin). We broke out this group, which we dubbed the Golden Quintile, and started examining what makes these MSPs so special. What are they doing differently from all the others?
One of the trends we identified was automation. A significant portion of top-performing MSPs are small shops, with four or fewer employees and recurring revenues below $1 million per annum. These are businesses that provide managed services, but also have to take care of all the sales, marketing, and administrative functions that any business must deal with.
Certainly, the sales and marketing functions play a key role in the revenue growth of these businesses. So how do they find the time to service their clients, crush tickets, and pound the phones to drum up new business?
The answer lies with the amount of automation that top-performing MSPs use. To speed up service delivery, and thus free up time for building their businesses, they rely on documentation.
Documenting clients is no easy task, but they automate as much of this task as possible. Top-performers automate documentation through integrations with their PSA, RMM, and network monitoring tools. The upcoming integration between Auvik and IT Glue, for example, will further enable this type of automation.
But it goes beyond just bringing information into a centralized data management application. The next step, one that has typically been adopted by the best-performing MSPs in the business, is to leverage documentation and automation to enhance business processes. We call this documentation maturity, and it reflects a company with a high level of operational sophistication.
A good example of this might be setting up workflow triggers so that certain events trigger actions for your team. If your network monitoring system detects an issue, you receive a text immediately to alert you to the issue. The same principle can be applied to other events, too, such as a change in the status of a process document or a password.
A checklist can then be created and referenced that will illustrate how to perform a task. With a workflow trigger to say, “This needs to be done” and a checklist to say, “Here’s how to do it,” you now have a much higher level of process automation. Your team thinks less and does more, making their use of time more efficient. They can use their brains for problem-solving instead of memorization.
All told, there’s a lot of opportunity for MSPs to automate business processes. Best-in-class MSPs consider automation one of their top priorities, and this automation involves more than just information flows. By automating processes, best-in-class MSPs do more in less time, with less hassle, and that’s what leads to high margins and more time for growing the business.