How the Right PSA Can Drive MSP Growth


The MSP market is growing fast. According to the report Managed Services Market by MarketsandMarkets, managed services will rise from $145 billion this year to $242 billion in 2021. That’s a healthy Compound Annual Growth Rate (CAGR) of 10.8%.

Unfortunately not all MSPs are growing that fast, and many of those that do would love to grow even faster.

To take on new clients, your technical solutions, such as your RMM, have to scale to support that growth. However, there are also internal business issues and client business issues —such as contracts, billing and project management that ―have to scale as well. That’s where a Professional Services Automation (PSA) solution built especially for MSPs comes in. It makes running your operation more efficient and brings discipline to many business functions. And yes, that PSA will help you achieve growth goals and manage that growth.

Impediments to Growth

There are many hurdles that keep MSPs from growing at a healthy clip. One problem is not having the right business tool such as that MSP-specific PSA. Smaller MSPs don’t think they can afford a PSA, so don’t bother getting one. As you’ll learn later, price should be no barrier to gaining PSA capabilities – provided you choose the right vendor.

The irony is the smallest MSPs probably need a PSA the most. In very small shops, the owner is often the main sales person, and at the same time is hands-on handling projects and driving the growth strategy.

And without a PSA, it can be difficult to properly perform critical functions such as tracking and managing billable hours, or take care of trouble tickets by matching the problem with the right technician.

Another drag on growth is the inability to plan for hiring because projects can be too unpredictable. To the extent which your MSP handles break/fix work, this type of reactive work is widely variable as well. All this uncertainty hinders forecasting, strategic thinking and planning, creation of new services, staff planning and hiring, and budgeting.

Grow Through Effective Hiring and Project Management

Proper project handling is one the best things you can bring to your MSP business. “Assuming the MSP can demonstrate externally and internally that they can manage these transition projects flawlessly, the MSP will be able to secure AND deliver on the very lucrative managed service contracts to outsource large-scale operations with the larger SMBs,” said Fred Voccola, CEO of Kaseya. “Strong project management capabilities for an MSP-focused project management system automatically tracks and manages all inventory, people, contracts, billing, and so on that are tied to each and every project.”

Kaseya’s recent white paper “The MSP Growth Problem: How to Surpass Industry Expectations” details the difficulty figuring who to hire and why:

“Intelligent hiring decisions cannot be made without an understanding of the complete financial landscape. For the majority of SMBs, payroll is the greatest operational cost. Generally speaking – assuming ordinary business and sameness in personnel – it will remain a relatively fixed percentage of overall expenses. Given that this is the case, it is a straightforward task for the IT business owner to build a model that calculates the impact of potential hiring decisions on overall margin.”

Managing Employee Time to Maximize Profits and Productivity

Understanding your actual workloads is a first step to informed hiring decisions. You can fine-tune further by carefully managing work time.

This type of careful employee orchestration requires deep insight into key tasks, what talents are required to perform them, and what the variables may be. And this insight has to be based on data you gather, and requires workers to log the hours they devote to a designated task or project.

PSA-derived data is the key, as our whitepaper details:

“This provides the manager with an opportunity to assess problems that might exist across any one of those dimensions (employee, task, project or client). Even more insight can be gained if the manager is assigning budgets or time estimates to the various tasks based on the overall project scope. From an IT project management perspective, time tracking is really the baseline foundation for any sort of analytics whatsoever regarding employee utilization, project ROI and the margin on any given project. Time tracking enables managers to understand which employees are performing and which are not, where estimates are accurate and where they are not, and which clients are profitable and which are not.”

Manage Your Business Through Deep Understanding

An MSP can’t manage what it can’t understand, and this lack of understanding isn’t just an impediment to growth, but can cause your business to go backward. Ironically, as our whitepaper highlights, this risk is often caused by the exact management tools that helped the MSP initially manage their business:

“There is a critical juncture in the lifecycle of many MSPs where attempting to keep business tasks coordinated and on-schedule via email is impossible. There is a point where common collaboration tools become woefully unsophisticated and stymie – rather than promote – growth. And, at this juncture, the successful MSP will adapt and adopt a suite of tools that fits its lifecycle stage, whereas an unsuccessful IT  firm will cling to the tools and processes that it has used up to that point in time.”

A next-generation PSA solution made especially for service providers lets you understand all aspects of your operations, and at the same time makes these key functions far more efficient, whether that be invoicing, managing projects, tracking billable hours, launching and managing services, and scheduling work.

The PSA also offers a single way to store, track and share all communications relevant to tasks and projects, keeping everyone on the same page and creating a record of exactly what occurred.

Kaseya BMS is Your Next-Gen PSA

Earlier this spring, Kaseya introduced Kaseya BMS – the first next-generation PSA built 100% for MSPs. With it, you can free staff to focus more attention on strategically selling new services, scoping and deploying these service, then running them in a profitable way. At the same time, you’ll spend far less time dealing with non-revenue-generating work such as project management and billing.

With BMS, you can:

  • Define and deploy new services rapidly
  • Manage client IT projects effectively
  • Monitor service deliver with 360 degrees of visibility

The price is specifically designed for fast MSP adoption. At $25 per user per month, it is a third the cost of competitive solutions, and includes all modules. And BMS is free for a year for MSPs moving off a competitive product.

With Kaseya BMS, everything is built from the project out. BMS also schedules all resources for the MSP. At the same time, you can track and manage inventory as well as people, contracts, and with billing all tied to projects (and all dependencies). Finally, BMS takes into account scheduling activities that aren’t project activities.

Other attributes include:

  • Low cost to implement, administer and manage
  • Rapid implementation time
  • No need for dedicated administrator (or redirecting staff time to manage)

For more product details, click here, sign up for a free trial, or get a price quote.

Posted by Doug Barney
Doug Barney was the founding editor of Redmond Magazine, Redmond Channel Partner, Redmond Developer News and Virtualization Review. Doug also served as Executive Editor of Network World, Editor in Chief of AmigaWorld, and Editor in Chief of Network Computing.
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