How do you do more with less? This may be one of the most asked questions in business, whether you’re a growing IT service provider or a Fortune 500 organization, but it’s taken on more importance as expenses climb and customer spending remains tepid. The overall technology industry is in a period of small gains and declines; as cautious consumers and business leaders take a conservative approach to their spending. With recent world events, I expect the studies completed by industry experts earlier this year may be more optimistic than the actual growth results we’ll see posted at the end of 2011. For example, Andrew Bartels, Vice President and Principal Analyst for Gartner Research predicted that “the US tech market growth of 8.0% in 2011 will be a bit slower than the 8.9% growth in 2010.” With governments across the globe experiencing fiscal difficulties and the cost of oil and food on the rise, inflation and other economic factors may further reduce that outlook.
With the economy still a question mark, few companies wish to saddle themselves with additional costs that may, or may not gain them a competitive edge. This uncertainty poses a significant challenge to MSPs who wish to grow their footprint and profitability. How do you balance the extra costs associated with hiring employees while keeping a close eye on the bottom line?
Organizations that carefully evaluate their current business and portfolio of services— and thoroughly examine potential service offerings— have a better foundation to build an effective business plan than those who don’t. That process should include a review of the services you offer, the cost and profit of delivering each. These metrics allow you to see what parts of your business are more profitable, and allow you to alter the portfolio for long-term success. While reviewing this information, it’s also a good idea to look at the KPIs (key performance indicators) for your support team. Are these metrics up to your expectations, such as your internal costs per contact or, more critically, customer satisfaction ratings? How do these compare with the industry, or with outsourced IT help desk vendors? Of course, the true measure is when you get the latest verbal feedback from clients or they renew a long term contract. After reviewing the services information, if you aren’t confident your company’s skilled professionals are being fully optimized—or your client contracts are at risk—it’s time to look at your options.
True Cost of Your Managed IT Services Help Desk
Part of your internal services assessment should include a skills inventory of your help desk personnel. Is your first call staff overqualified for the role you have them in, resulting in higher costs for basic support? They could be qualified to be field technicians or pre-sales engineers, allowing you to use them more effectively to help reach your business growth goals. Many MSPs find they are not making the most of their bench utilization, but frequent assessments allow them to tweak their team and improve their profit potential.
The other side of the equation is what to do if you find your first call team is overqualified, and could be redeployed. Before you go to the expense of hiring additional staff, explore other options; such as outsourcing certain support functions to a qualified partner. Rather than increasing your long-term personnel costs, contracting with an experienced team of professionals to handle the routine calls allows an MSP to focus on the services and support that set them apart from the competition. That frees up your skilled team members to take on higher value projects or bring in new business, increasing your overall business revenue and profitability. This creates a cost-effective process to grow your business.
Another option for MSPs with a limited number of employees capable of providing a new service is to leverage an outsourced MSP Help Desk partner to handle customer support. When business is starting out, your internal team may be able to handle most of the implementations and support calls, with the outside team helping during high-volume call times, when employees are sick or on vacation, and as that business practice grows. For example, an MSP with two Cisco-certified technicians wants to start a unified communications practice, with VoIP and application support. Even if you determine this team would be too small to handle pre-sales needs, project design, implementation, and take all the related client support calls; contracting with a qualified help desk organization could make this happen (profitably).
Properly evaluate your organization’s capabilities and research the outsource options available. This allows you to plan a business expansion without using up all your cash reserves, while creating an efficient and flexible growth strategy. If a service offering or practice doesn’t go as planned, or economic conditions worsen, you have the ability to scale back your labor costs without losing any of your valued employees. Outsourcing all or part of your help desk could be part of a recession-proof business strategy, allowing MSPs to scale their organization and service portfolio without significant financial risk. So, after assessing your own internal service capabilities, take a look around and see how other professionals can take some of the burden off your shoulders.