Many small and medium-sized businesses reach a point where they need to scale up operations to continue growing. However, scaling a business comes with numerous challenges, from managing more employees to increasing demand. This is where partnering with a managed service provider (MSP) can help. MSPs are companies that manage and optimize IT infrastructure and services for other businesses. By outsourcing certain tasks and processes to an MSP, you can focus on your core competencies while accessing skills and resources to scale sustainably.
This article will explore the opportunities and challenges of using MSPs to scale up your business. Read on and look at the benefits MSPs can provide, what to look for when choosing an MSP partner, and potential risks and how to mitigate them.
Opportunities With MSPs
- Access to Expertise and Advanced Technology
One of the biggest advantages of partnering with an MSP like Spectrumwise is gaining access to expertise your business likely lacks. MSP engineers are highly trained and experienced in managing complex IT environments using the latest software and tools. This can translate into leveraging cutting-edge technology to streamline your operations and infrastructure without needing to train internal staff.
For instance, MSPs use remote monitoring and management (RMM) software to oversee entire IT infrastructures remotely. This provides real-time visibility and control to minimize downtime. You benefit from high-level capabilities without having to become experts in these technologies yourself.
- Reduced Overhead Costs
Since MSPs provide managed services for multiple clients, they can achieve economies of scale that lower costs. This means you save money by outsourcing to an MSP compared to hiring expert staff, buying hardware and software, and providing training in-house. MSPs manage all the licensing, maintenance, upgrades, and security processes associated with IT infrastructure.
MSPs also provide 24/7 monitoring and support. You avoid expenses like paying for around-the-clock in-house IT staff to provide support outside working hours. The MSP handles it as part of the service package.
- Improved Compliance and Security
Keeping up with compliance, regulations, and security best practices requires constant vigilance. Government rules like HIPAA in healthcare and PCI-DSS in retail change regularly. Staying compliant while trying to grow a business presents a major obstacle.
MSPs stay on top of all the regulations and compliance standards that apply to your industry. They continually monitor and apply the latest security patches, upgrades, and protocols to protect your infrastructure and data. The MSP handles the compliance burden so you can direct your focus toward scaling the business.
- Faster Response Times
No matter how robust your infrastructure, problems will inevitably occur that could lead to costly downtime. MSPs minimize business disruptions by providing faster response times to issues than in-house staff may be capable of.
MSPs monitor infrastructure proactively using advanced RMM and analytics tools. This enables them to catch many problems before they become business-impacting failures. When unforeseen problems do arise, MSP technicians can typically respond faster than overworked internal IT staff juggling competing priorities. Faster issue resolution translates into less downtime and lost revenue.
- Increased Agility and Efficiency
Partnering with an MSP provides the flexibility to scale your infrastructure up or down as needed. MSPs use cloud computing and virtualization to provide capacity on demand. As your processing and storage needs grow, additional capacity gets spun up quickly without buying more hardware. When needs decrease, capacity can be reduced to the right-size resources and save money.
MSPs also bring strategic expertise that can optimize your operations for greater efficiency. They take over time-consuming tasks like patches, updates, backups, hardware checks, and help desk tickets. This frees up your staff to focus on more strategic projects that drive growth and innovation. The result is higher productivity and agility to scale the business.
Challenges Working With MSPs
- Security and Compliance Risks
While MSPs provide security and compliance benefits, outsourcing IT infrastructure also comes with potential security risks to weigh. MSP technicians have full access privileges to the networks, systems, and data they manage. This extends your attack surface to a third party.
If an MSP lacks adequate security controls or its credentials are compromised, it could result in a major breach of sensitive customer data or intellectual property. A rigorous evaluation of security practices is crucial when choosing an MSP. Obtaining third-party audits and certifications like SOC-2 attests to an MSP’s security controls.
Compliance risks also exist if you don’t vet the MSP’s processes. It would be best if you had assurance they follow proper protocols like HIPAA and PCI-DSS when handling your data and systems. Get contractual guarantees they will maintain compliance and assume liability for any data breaches.
- Business Understanding and Alignment
Every business has unique processes, applications, workflows, and quirks in its IT environments. MSPs manage infrastructures for multiple clients across various industries. This diversity of clients makes it challenging for MSPs to develop deep institutional knowledge of any single client’s business.
This poses potential downsides, such as MSPs making changes that conflict with your business needs. Insufficient business understanding could result in subpar optimization, misconfigured services that disrupt operations, and poor responsiveness to issues.
Clear communication and expectation setting are crucial to align the MSP with how your business operates. Provide adequate training and knowledge transfer about your environment, workflows, and pain points. You may pay more for an MSP willing to invest in learning your business versus treating you like any other generic client.
- Loss of Control and Visibility
Outsourcing IT management to an MSP entails ceding some control. You may not have full visibility into or access to parts of your infrastructure once the MSP takes over. This loss of operational control can make some businesses nervous, especially in highly regulated industries like healthcare and finance.
The MSP services contract should guarantee clients retain adequate oversight and transparency. Contract terms should allow you access to your environment for auditing purposes and obligate the MSP to provide activity reports. You may also want approval authority over changes to prevent the MSP from acting unilaterally.
- Varying MSP Service Quality
Not all MSPs are created equal. The quality of services, support responsiveness, technical expertise, and project delivery vary widely among providers. MSP sales pitches and promotions don’t always accurately reflect actual service capabilities.
The consequences of partnering with a subpar MSP can be disastrous. Poor cybersecurity practices could result in catastrophic breaches. Incompetent technicians make mistakes that harm operations. Inferior software platforms lead to inadequate monitoring and system crashes.
Extensively vet MSPs before selecting your partner. Check customer reviews, retention rates, public reputation, and financial health. Demand references and case studies prove that they deliver results that match their marketing promises.
Choosing the Right MSP Partner
With thousands of MSPs to choose from, it’s challenging to identify the right provider to help scale your business. You want an MSP that acts as a true partner and trusted advisor rather than just a vendor. Here are some tips for choosing an MSP with the right strategic fit.
- Industry Experience and Specialization
Seeking an MSP with experience in your industry or vertical market is advised. MSPs develop expertise working with clients in certain sectors like healthcare, finance, retail, manufacturing, etc.
An industry-specialized MSP understands the unique IT challenges and nuances of your vertical. This translates into delivering services tailored to your specific business needs rather than a one-size-fits-all approach. Vertical expertise is especially crucial for highly regulated industries.
- Technical Capabilities and Resources
Make sure the MSP has capabilities aligning with your current and future tech needs. Evaluate their technical expertise across servers, networks, endpoint devices, operating systems, cloud platforms, backup/recovery, business continuity, and security.
Examine if they have adequate staffing and resources to properly support your environment. Understaffed MSPs risk being overwhelmed as you scale, leading to delayed responses and inferior service.
Avoid MSPs trying to pad margins by providing the bare minimum service tiers. Look for providers willing to customize service levels and engineer solutions to fit your needs rather than pigeon-holing you into rigid contracts.
- Client Retention and Satisfaction
Examining an MSP’s existing client relationships offers crucial insight into their capabilities. High client retention rates and satisfaction scores indicate the MSP reliably delivers positive outcomes. Ask for client references and read online reviews.
Beware excessive churn, where clients frequently drop the MSP. This suggests they fail to build effective partnerships and don’t invest in understanding clients’ businesses. High churn also raises concerns the MSP will outgrow its capabilities as you scale.
- Cultural Fit and Communication
The MSP you choose should feel like an extension of your team rather than an external vendor. Look for similar corporate cultures and values between your business and the MSP. Ensure they exhibit responsive communication and take time to understand your needs.
A strong cultural fit and high-touch partnership facilitate knowledge sharing and alignment. You want an MSP acting as a trusted advisor that proactively keeps your interests in mind, not just reactively fulfilling service requests.
- Financial Health and Business Practices
An MSP that lacks financial stability and healthy business practices can place your infrastructure and data at risk. Research factors like their profitability, funding sources, growth trajectory, and business model.
Opt for MSPs demonstrating sustainable growth that is not built on unsound practices like slashing prices or overselling capabilities. Make sure they invest in their infrastructure versus just reselling other vendors’ services. As you will rely on this partner long-term, only choose MSPs built to go the distance.
Conclusion
Partnering with a managed service provider offers immense opportunities for ambitious businesses looking to scale operations. MSPs provide access to expertise, advanced technologies, improved security and compliance, increased agility, and reduced costs. This enables small and mid-sized businesses to continue growing sustainably without overburdening limited internal resources.
However, the level of quality and capabilities varies substantially among MSPs. Conduct thorough due diligence to choose an MSP that aligns with your industry, business needs, and corporate culture. Invest time upfront in a gradual implementation process and ongoing governance to build a high-touch partnership. With the right MSP relationship, businesses can confidently scale to the next level.
