Until a decade ago, most enterprises took care of their IT needs through the break-fix model. This used to be a time-consuming process where a service engineer had to visit the site and manually fix the IT issues of their clients. We now live in a digital age where businesses cannot afford any downtime caused by IT issues. Hence, this break-fix model is no longer a viable solution for enterprises. This is where managed service providers (MSPs) come into play.

The transition to managed services was rapid over the last decade as enterprises have realized the importance of business continuity and data security. According to Markets and Markets, the global MSP market is expected to touch $282 billion in 2023 from $180.5 billion in 2018. If you are an IT service provider, now is the best time to make this transition and secure the future of your business.

The successful transition to managed services requires careful consideration of your software needs, pricing strategy, marketing and sales, and customer support process. Let's take a brief look at how IT service providers can make this happen.

What you need to consider

Before making the transition to managed services, IT service providers must consider the following factors to get an idea of how this transition will impact them:

• Existing clients: Your existing clients are used to paying for your services by the hour only when the need arises. Convincing them to pay you a monthly subscription can be a little tricky.
• Employees: Your employees are your partners in this transition. Since this is a major decision, check if they have any concerns or doubts regarding the changes in their job roles.
• Workload and capacity:You need to get an idea of how much workload you can handle after your transition to managed services.
• Business goals:If you are an IT service provider, this transition is a major business decision for your organization. Consider your strategic business goals to make the right decision on the type of services you wish to provide.

Find the right tools

You need to choose the right tools based on the services you are willing to provide. It is a good idea to start with services where your expertise lies. For instance, if you specialize in security solutions for your break-fix clients, you can start with SECaaS (Security as a Service) and find the right tools (antivirus, firewalls, etc.) needed to provide this service. With the right tools, you can proactively prevent issues for your end-users rather than reacting to specific IT events.

Formulate a pricing strategy

Coming up with a pricing strategy could be a little tricky when you first transition from a break-fix model to managed services. If your price is too high, you run the risk of losing your clients. If it is too low, it will affect your profitability and the ability to sustain in a competitive market.

Want to know how you fare on pricing compared to other MSPs in your area? Click here.

As a managed service provider, you need to evaluate your costs including technology expenses, business overheads, and staffing expenses to price your services right. Once you have figured out your expenses, you need to know if there are any additional costs you are likely to incur based on the custom requirements of specific clients. Based on these factors, you can come up with a pricing strategy that is reasonable expenditure for your clients and does not affect your profitability.

Develop a marketing strategy

If you wish to sustain in the market as an MSP, you need to find the right clients and generate new businesses. This requires a good marketing strategy. To market your products to the right clients, create a buyer persona of your ideal client and reach out to similar people in the market.

Depending upon your marketing goals, you may have to bring in demand generation experts who can create targeted marketing campaigns and generate awareness about your products. In this stage, you also need to figure out the marketing channels you wish to use to appeal to your target customers.

Plan your customer service support

When it comes to IT services, the role of an MSP is very different from that of a break-fix service provider. In managed services, you are required to provide 24/7 support to your clients. This means continuous monitoring of their endpoints, networks, security threats, and data storage facilities. You also need to anticipate issues and come up with solutions on the go. Your clients cannot afford downtime, hence the level of support you provide is critical in shaping the future of your business.

What the future holds

As of 2019, the compound annual growth rate (CAGR) of the MSP market is around 12.5%. This trend is likely to continue in the next ten years due to higher business productivity and increasing demand for cloud-based IT services.

Considering this, it is about time you break-up from the outdated break-fix model and embrace the managed services model that can help you stay competitive in the market.