The Managed Service Provider (MSP) market continues to evolve, with customer expectations of a smooth and efficient service rising, newcomers continuing to enter the market, and growth challenges facing service providers already in place.

The Global State of the MSP Report for 2023 from Datto showed an expected revenue increase during the next three years from 82% of MSPs. At the same time, MSPs see their biggest challenge as the competition.

These bring about a series of challenges that service providers should focus on now to ensure they can deliver for a growing customer base without service levels dropping from the current standards while maintaining their own profitability and growth. 

Service providers who can handle these challenges will differentiate themselves and set themselves up to take advantage of the growing market potential.

In this post, we’ll discuss four key service management challenges facing service providers and how efficient service integration can help:

• Finding the best and most efficient use of resources
  ‍
• Handling tool and process collaboration between service providers, customers, and suppliers 
  ‍
• Decision-making in tough economic times 
  ‍
• Staying competitive in the fierce service provider market

Finding the best use of available resources 

More customers mean more work, which means the need for more staff to get everything done. Right? 

There is a thought process that perhaps there is inefficiency in how service providers have traditionally addressed some of their challenges. Increasing resources (whether that be efficiently or not) is the obvious way to make day-to-day problems disappear and keep customers happy. 

But what if you ask the difficult questions:

• Can we manage with our existing resources?
  ‍
• How do we then cope when we win new deals?
  ‍
• In short, how do we make the most of our available resources?

In this scenario, there will be more demand, so you need to find a way to address some of those customers' needs without impacting your customer-facing image.

The idea of outsourcing may feel contrary to the offering. After all, you’re providing a service, and you may believe your customers expect all of the expertise to be in-house.

The truth is, there are some aspects of a service offering that providers don’t need to do all on their own — they simply need them to work.

Integrations are the perfect example. As long as they all function correctly, nobody cares as long as you can provide the full range needed.

This is where there is an opportunity to maximize your resources. By working with an expert partner for your integrations, you’re freeing up your internal experts’ time to work with your new customers.

The end result? Without increasing your internal resources, you can manage a larger base of customers and, at the same time, offer better integrations with little extra work.

Handling tool and process collaboration between service providers and customers

Every customer has their own setup of systems and processes, and even when using the same tools, they’ll likely have them configured in a unique way. This can be a challenge for service providers as it can feel like each new customer requires a bespoke solution to get everything working.

Meanwhile, service providers also have their own systems and ways of working, which should hook into the customers seamlessly. This is the essence at the center of a service provider’s offering: everything will work as you expect.

The investment in those respective systems, both financially and technically, means it isn’t realistic to expect them to change to suit. Therefore, it’s critical to find a way to make that connection between the various systems as simply and smoothly as possible.

For some service providers, the solution is using a portal, a corporate iPaaS, building an integration manually, or a combination approach.

As we’ve already mentioned, most MSPs are expecting an increase in revenue and customers, which will only complicate matters further. 

This is why integrations are so vital to the success of an MSP. Finding a way to handle the various options without incurring high costs for either party is essential to future profitability.

ONEiO exists to solve that challenge. After decades of experience in integrations, we saw service providers grow weary at the lack of purpose-built solutions that actually made it easier to operate their business. 

With ONEiO, service providers and their customers can simply continue to use their tools and processes as they want, with no need for additional licenses for ITSM tools, iPaaS, or the use of a portal to provide the service.

It just works. And that is the kind of solution that opens up opportunities for service providers to welcome customers as fast as they can win them.

Decision-making in tough economic times

Predictions for the economy, in general, aren’t great. Companies are expecting and preparing for tough times ahead by making difficult decisions, particularly regarding suppliers and service providers.  

Whether the approach is to cut costs and staff to try and weather the storm, or to look for ways to innovate their way through the situation, customers will be looking to their service providers for ways to help.

They may come and ask questions like:

• How can you save them money without loss of service?
  ‍
• Can you point to a supreme efficiency in your offering that continues to save them money?
  ‍
• How can you help them to be more competitive?

This is where having a unique offering that keeps integrations up-to-date and working smoothly with no effort on your or their part can help. Because at the end of the day, the service provider's job is to provide the service in a way that helps the customer focus on their core business, and keep their customers happy. 

There are no extra developer costs as systems update or change, and your customers can be confident that aspect will continue to run smoothly. It’s easy to overlook, but the overhead of fixing broken integrations should never be underestimated.

“Simply put, by future-proofing your integrations, you’re making yourself more competitive.”

‍Erkka Heinola, Chief Revenue Officer, ONEiO

That is it in short. Having integrations that you or your customer doesn’t need to pay to update or fix is a cost-saving they are making against their competitors and gives them an advantage.

From the perspective of an MSP, the maintenance and technical responsibility of the integrations is off your hands. This leaves you with one less thing about which to worry.

How to stay competitive in the MSP market

Let’s repeat the research from the start: MSPs ranked the competition as their biggest challenge in the year ahead. How do you make yourself stand out in a crowded market?

“Service providers should ask themselves: what is our core business, and what should we be doing? Where should our focus be? On the core product, not the ancillary parts.”

Erkka Heinola, Chief Revenue Officer, ONEiO

Focus. That’s the key ingredient. Do what you’re good at and utilize expertise on the rest, so all of your attention is spent on what makes your business great. 

There are all sorts of flavors of service providers. The biggest reason you will win business is that you specialize, rather than because you can offer the services a customer expects as standard.

Think about it. What do you do? Are you a cybersecurity company? A cloud service provider? A telecommunications provider? If the answer isn’t ‘we build integrations’, then time spent building integrations would be better invested in your core product and service offering.

In fact, by working with a best-of-breed provider to take care of your integrations, you will achieve faster time to value. When getting an integration up and running takes days instead of months, you’ll be working on billable customer projects much sooner. So this is a challenge that provides an opportunity to be more competitive and create more revenue. 

Take ONEiO as an example: as an integration service provider, we take all of the technical headaches out of integrations, speeding up the process and providing ongoing maintenance and technical responsibility, so you’re freed up to win and onboard new customers.

Further reading: The IT Service Provider’s guide to building an integrated service management ecosystem

IT service delivery doesn’t happen in a vacuum, and neither providers nor customers can operate as if their business exists on an island anymore. To stay competitive, you need to be able to collaborate – and seamlessly. 

In our recent guide, we dive even deeper into why (and how) service providers should build a fully integrated service management ecosystem.