March 10, 2023, 04:22 PM EST
‘The key thing of this, and the reason why this is even necessary, is our customers are changing,’ says Phillip Walker, customer advocate CEO Network Solutions Provider, at The Channel Company’s XChange March 2023 conference. ‘With that said, their demand is going up. You have margins that are falling, profitability is suffering, you have to increase sales and lower cost. That riddle is how are you going to do that and bring on more systems.’
In order for MSPs to cut costs and scale their business they must invest in and squeeze more out of automation tools, according to Phillip Walker, customer advocate CEO of Manhattan Beach, Calif.-based Network Solutions Provider.
Walker spoke at CRN parent company The Channel Company’s XChange March 2023 conference in Orlando, Fla., this week about automation for operational efficiency.
The key thing to grow business this year is using robotic process automation (RPA).
“MSPs that are using RPA processes are looking at, on average, seven to 25 percent lower costs across the board,” he said. “It’s going to drive the point to give you guys more efficiency that’s going to drive profitability [and] growth.”
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“You have to invest in systems,” he added. Having tons of techs “isn’t going to happen. You’re going to have to get to the point where you guys are using systems to do more with less,” he said.
The average MSP onboards two to three clients a quarter, he said. To outpace all of the headwinds coming on, MSPs must onboard five to seven in the same timeframe.
“That means more staff,” he said. “That means more techs. That means more service department and more hours. How are you going to deliver services, because the demand is going to go up. Customers that weren’t looking at managed services providers before are going to be looking at you guys to deliver.”
One thing Walker has learned throughout his years as an MSP is that people cost more than systems.
“The key thing of this, and the reason why this is even necessary, is our customers are changing,” he said. “With that said, their demand is going up. You have margins that are falling, profitability is suffering, you have to increase sales and lower cost. That riddle is how are you going to do that and bring on more systems.”
The downfall, he said, is that most MSPs are still using optimization platforms to deliver services and run business, but most of the tools on the market are not built for business productivity.
Another way to be more efficient is moving all customers to the cloud and getting them off-prem, “because rolling the truck to a client is costing you tons of money, time and effort.”
“When the tech is not in their cube taking tickets because he was driving across town to go check a firewall, it eats into your profitability,” he said.
He added that 51 percent of technicians waste 30 percent of their time on tickets that can be closed through the cloud. On average, it takes 14 to 16 hours to onboard a new client. MSPs must get that down to four hours, Walker said, if they want to successfully get to onboarding five to seven new clients a quarter.
Brian Ruschman, president of Covington, Kentucky-based MSP C-Forward, said he is constantly evaluating how to be more proactive with support.
“Moving customers to hosted environments that cut down on rolling trucks out to the clients offices is a big part of this,” he told CRN. “Phil hit home when he mentioned that systems centering around automation need to be implemented to continually improve and drive success. Measuring Key Performance Indicators quarterly should be a large part of the process.”