Service providers face a staggering landscape. The industry, the customers, and the work itself are changing in ways that bring new pressures.

From our own service provider customers, we hear about the many challenges they are facing in their markets today.

The Fierce Level of Competition

Competition is strong. Changes happen rapidly within the market, and customers present ever-more-specific requirements.  What makes competition even more challenging are new players. There are fresh entrants into certain shared services and service provider areas from organizations who haven’t been there before.

The Increase of M&A

Another change to the MSP landscape is an increase in mergers and acquisitions. The ServiceNow world especially sees M&A activity. Organizations that were previously separate come together and offer greater service portfolios. For existing service providers, this means more competition. Newly available offerings make it harder to secure and maintain the attention of the customers that you are trying to serve.

Higher Customer Expectations for a Digital Experience

With so many people living online for the last year during the pandemic, people have become used to the online experience. Increasingly, they expect their B2B relationships to be like their  B2C experience as customers. What does that mean for their expectations of service providers?

In an organizational world heavily dependent on email, apps, and perhaps even your own portal, customers are saying now, “Why can’t this experience just be like Amazon? Why can’t I just ‘do it online’? If I already have information in my system that I need to give you, why do I have to call someone? This is online. I want to be able to automate the business relationship with my service providers the way that I’ve automated my personal relationships with the companies that serve me.” 

For service providers, this customer expectation is a big challenge – in fact, probably the biggest from our perspective.

MSPs Hindered by the Repetition of Custom Work

The drag on progress happens partly because many service providers are still operating like a bespoke tailor. They are giving each customer bespoke development. To eBond with each customer, they develop the connection from scratch. They build something specific to that customer. In the short term, the arrangement is great from the customer’s perspective. But it inhibits growth for the provider.

  • Most providers want to increase their number of customers rapidly. How does bespoke development for each customer fit into that plan? 
  • In response to competition and demand, many providers try to change the services they offer to their customers and add new services through the relationship. How much will the additional development slow down the provider?

The provider inhibits growth if they repeat similar development efforts each time for new customers and new services. 

Service providers are seeking a way to retain the quality associated with that bespoke relationship, but more simply repeat the automations so that projects don’t require as much time and effort – by both the provider and the customer.

Barriers to Growth for Service Providers

Barrier: Unpredictable Costs

All service providers look to remove barriers to growth. And one of those barriers is unpredictable costs. If a provider does not know how long it will take to establish a relationship with new customers, then it is difficult to quote.

The following thinking takes place. “I think I know how much it’s going to cost, but there may be some scope creep in that project. They may ask me to do something that we’ve not done before.” And all of a sudden, the providers’ costs are unpredictable.

Growth for a service provider demands predictability, especially in the presale world. The provider wants to be able to promise the customer how much time the project will take, and how much it will cost. When providers meet the expectations they raise with customers, they improve the customer experience. This predictability is especially important for new customers that do not have a history with the provider. If the provider can deliver well for new customers, they raise customer trust, setting themselves up for a healthy relationship.

Barrier: Onboarding Limitations

It is a different matter for providers doing bespoke work on automations. For them, onboarding customers can be both unpredictable and time-consuming.

Providers that run ServiceNow may only be looking at ServiceNow customers right now to be their own customers. But again, they should consider barriers to growth. What if they could open up their prospecting efforts beyond those who use ServiceNow in their IT environment? Such providers could also look to the Remedy community and the Ivanti/Cherwell community.

Many providers stunt growth by limiting themselves on who their services apply to. And how do they onboard customers if their initial efforts are weighed down by trying to figure out how to connect to various kinds of systems?

Barrier: Connection Maintenance

Developing automated connections is challenging, but maintaining them is equally as difficult. And this maintenance often catches providers by surprise.

For example, a provider goes through a ServiceNow upgrade (e.g., Quebec). Their customer switches from Ivanti to ServiceNow. Having the same environment makes some things simpler. But now the provider must consider what existing integration they had with that customer’s Ivanti system. Does the provider now have to rebuild everything from scratch? Providers frequently overlook the planning for this kind of maintenance, making system changes more difficult. 

Again, the impact to that is the lack of predictability on ongoing costs. It’s not just onboarding and presales where providers need to be predictable. Providers need to be able to hit the goals and the service levels that they have agreed on with their customers throughout the service contract.

Barrier: Monitoring Progress

Providers should monitor whether they are reaching their goals – and whether the customers are as well. There may even be some obligations that customers have to fulfill to allow a service provider to be their provider. Providers monitor service performance for an individual customer, across customers, within regions, and between regions.

The detail available to a provider within their service data holds great value – as long as they can get to it. Some providers find that data built over time can be monetized and made available as a value-added service.

Once a provider has a service relationship established, they can find some additional services so that they can have mid-contract upsells. They seek out how they can expand the relationship with their clients and how they can add more value to the customers that they service.

Automation Helps MSPs Overcome Barriers to Growth

There are a number of possible barriers to growth. What service providers find is that they can eliminate many of these barriers through automation. A growing company generally does not reduce personnel. After all, they help to advance the growth that the company seeks. But where automation can help is to accelerate the work, making it more predictable with less effort to achieve either the same or better results.

There’s an entire lifecycle providers have with the customer. Providers should be able to look for the value of automation throughout the customer lifecycle, including the presale stage.

Beyond predictable quoting, automation helps providers to protect their margins. They have predictability in the service costs, knowing how much they will charge their customers going forward. Whether a provider’s costs are fixed or variable, anytime they build a price list, they want to know for themselves how much time it will take so that they can protect their margins. 

A common scenario: “Well, I thought it was going to take me a week to onboard that new customer. It actually took me five weeks, because there were surprises in the onboarding process.” That’s an immediate hit to the margin.

Automating Customer Connections

Providers may have automated connections today. (Other terms referring to this concept are SIAM and eBonding.) In many cases, those connections to customers can improve.

“How do I connect with my customer?” Some customers have to follow a swivel-chair approach of calling or emailing the provider – or logging into the portal to copy and paste all the things out of their own service desk. Instead, they should be able to pass that into their provider’s service desk just by escalating from within their system.

Automating to Deliver New Value-Added Services

Through automation, a service provider can enhance their portfolio of services that they make available to customers. The delivery of new services offers additional ways to deliver value to customers.

Such services stemming from the provider’s ServiceNow environment can include app migrations, ServiceNow upgrades, backup services, data archiving, benchmarking, and more.

These additional services strengthen the business relationship with customers, and give providers additional revenue opportunities. 

Automating to Amplify the Value of Service Data

Through automated connections, providers also gain insights into service data. The amount and detail of data available in the service history offers incredible value.

This data holds insights waiting to be found for both the provider and the customer. It lets the provider know how they are doing. They can better understand the services they are offering. They can also combine the ServiceNow data with data from elsewhere in the organization for detailed analysis.

But providers also amplify the value of service data by letting their own customers gain insights, including performance relative to peers in the industry.

Growth Acceleration Through Automation

Service providers face both external pressure from a fiercely competitive industry and intrinsic pressure from inherent barriers to growth. Automation not only frees up time spent on repetitive work, but also delivers new services and insights. The newly discovered value puts a service provider in a much better position for growth.

Want to learn how Perspectium helps providers like Accenture, Crossfuze and Fujitsu overcome barriers to growth? Let’s chat.

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