When discussing digital transformation vs operational efficiency, many people fall into the trap of treating them as oppositional or interchangeable forces. In reality, one enables the other. MSPs must experience digital transformation to achieve operational efficiency, which is based on improved processes and resource allocation.
This relationship plays a key role in why digital transformation is more than a buzzword—it’s becoming big business. A study by Markets and Markets stated that the digital transformation market size is projected to grow at a compound annual growth rate of 24.1%, from $695.5 billion in 2021 to $3.1 trillion by 2030.
Let’s explore the relationship between digital transformation and operational efficiency, how this relationship helps MSPs, and what resources you should invest in to future-proof your business.
What is digital transformation?
Digital transformation is a business’s integration of digital technology to create and modify its services, products, and operations to deliver value to customers. This can include any number of digital tools, such as cloud computing or AI. For example, if an MSP pivots to cloud computing to monitor and manage inventory, they are facilitating digital transformation. Other key elements of digital transformation include:
- Cloud migration. Moving from physical servers and software to cloud servers and SaaS tools not only helps MSPs save on precious resources, but also enables them to better service their clients from any location at any time.
- Data analytics. As MSPs scale, they need to maintain the ability to process growing amounts of data to service their clients. Implementing a business intelligence dashboard can help consolidate and arrange this information to drive operational efficiency.
- Scalability and flexibility. When deciding the platforms and processes you are going to onboard, choose options that you can scale with your needs as your business grows.
- User experience (UX). Any tools you turn to or solutions you implement need to be accessible and usable not just across all your internal teams, but potentially by client stakeholders as well.
- Cybersecurity. Digital transformation, by nature, requires adding more and more digital platforms to your security stack. And larger transitions, like moving to the cloud, present even more potential risk vectors. To balance this, MSPs may benefit from investing in a more powerful, tailored security stack to help manage increasing threats and clients’ regulatory demands.
For MSPs, what digital transformation aims to do is innovate and improve the experience for both clients and internal team members. This goes hand in hand with the greater goal of operational efficiency. By bringing more technology and automation into processes, this results in less wasted time and labor across the board, letting your technicians focus on mission-critical tasks.
Why is digital transformation so important?
Building a profitable MSP business model is about fitting the current business world, and digital transformation involves many innovative tools and strategies to help keep your business efficient, adaptable, and streamlined. This digital evolution has even been redefined due to the global pivot toward remote work. Some of the benefits of digital transformation include:
- Improved customer experience – You’re able to provide clients with a more seamless experience through streamlined, user-centric processes and more tailored interactions.
- Increased productivity – Automating tasks increases productivity since you are more able to focus on the other responsibilities that require a human touch. For example, this can include automating baseline help desk tasks in order to give your techs more time to review data from your monitoring dashboards.
- Expanded global reach – Centering your operations online widens your reach without geographical limitations. This includes remote management and cloud services that can be accessed at any time and any place.
- Increased cost-effectiveness – Infrastructure costs are reduced through the use of cloud services and automation. This increases cost-effectiveness across the board while allowing for resources to be allocated in other essential areas.
- Deeper data-driven insights – Since digital transformation can offer data insights and analytics, these insights can be used to improve areas of your business through new innovations and strategies.
- Enhanced cybersecurity – Online security solutions make it easier to protect your business from cyber threats that could compromise crucial data, like operations or customer info, since their main priority is on combating hacking, viruses, and malware.
For MSPs, specific and critical steps are necessary to achieve operational efficiency through digital transformation. We’ll profile some of these best practices and solutions ahead.
How to achieve operational efficiency through digital transformation
MSPs should focus on these specific strategies to build a digital transformation roadmap that will help drive operational efficiency:
Perform an honest self-assessment
It’s easy to fall into the trap of one-size-fits-all when it comes to digital transformation. While there are certain aspects, like cloud migration, that will be almost universal, you need to know where your gaps are and how your efficiency can be improved. This is why one of the most important first steps toward digital transformation is reviewing your processes and your tech stack to determine what is holding you back the most.
Prepare for cloud migration
Cloud migration is one of the largest shifts an MSP can undergo to improve overall operational efficiency. The self-assessment will help a lot here in terms of setting the stage, but MSPs will also need to evaluate their cloud providers of choice, establish a migration plan, and do intensive testing and troubleshooting while the migration is complete.
Embrace automation
By implementing automation tools to handle repetitive tasks, you’re saving time and energy for bigger projects and tasks that need a human touch. This boosts efficiency twofold by streamlining data entry, reports, and other time-consuming tasks while ensuring there are fewer errors. A core commitment to integrating automation into as many relevant tasks as possible is essential for long-term MSP success.
Integrate systems
A key step in digital transformation is ensuring all the new systems and technologies you are upgrading or implementing can work together in harmony. System integration can be time-consuming, but freeing your business from siloed operations can be well worth it. Common solutions for integration include APIs, middleware, and specific cloud-based services designed for integration. MSPs are best served here by working with partner platforms like the ConnectWise platform which has integration capability with a large selection of third-party tools.
Artificial intelligence/machine learning
While all industries are learning how best to integrate AI into their workflows, MSPs are in a unique position to take advantage of what it brings to the table. Whether it is helping automate alerts and processes or helping parse through large datasets, AI has the potential to take operational efficiency to new heights in the field. ConnectWise is using AI in many different ways to help drive efficiency, including:
- Generating content, with expert oversight, to be used for products and services.
- EDR deep visibility to provide self-contained threat protection
- SIEM anomaly training
- Serving as a “force multiplier” for internal teams
- Generating PowerShell scripts based on user input
We also have built-out policies ensuring the ethical use of AI.
Unify analytics
Consolidated analytics platforms can provide a holistic view of client and internal environments for a more comprehensive look at operations. In addition, having critical business data in one place makes it easier to implement automation and AI solutions, which can then help mine data to surface actionable insights. Tools like BrightGauge also support here by funneling relevant client and internal data into a singular, custom dashboard.
Keeping data privacy at the forefront
One of the biggest concerns with the rise of digital transformation is how this impacts the security and privacy of user/client data. By definition, digital transformation can result in the storage and analysis of vast amounts of digital data. Failing to protect this information can lead to catastrophic financial, legal, and reputational damage to an MSP. ConnectWise is working to stay at the forefront of data privacy with a blend of administrative, technical, and physical best practices to keep client data secure. We also adopt measures complying with international regulations for global security.
Endpoint security solutions
A full MSP digital transformation introduces a wide variety of new endpoints into your ecosystem, from IoT devices to cloud servers to potentially new physical and virtual endpoints. This makes investing in a strong endpoint security solution more important than ever, ideally supplemented with advanced cybersecurity tools like encryption protocols, AI-driven threat detection, and multi-factor authentication. This helps offset some of the inherent security risks of digital transformations.
Prepare your staff
A digital transformation is only as effective as the staff that is managing it. As you evolve your digital practices, it’s essential to invest in training resources to get your staff familiar with new tools, processes, and regulations. Even if you have a perfect digital transformation in place, you won’t be able to reap the efficiency benefits until your team is on board.
Upgrade or sunset old/outdated tools
One of the biggest obstacles to operational efficiency for MSPs is reliance on old or legacy tools. While there is the familiarity and comfort factor, you and your clients are also exposed to greater cybersecurity risk as well as potentially dwindling support resources and lower compatibility with other tools.
When it comes to replacing these outdated solutions, though, equally important is the quality and nature of the replacement. Compatibility and flexibility are key, and onboarding tools that can adapt to the needs of physical and desktop infrastructure, or a mix of both, will allow you to support a more diverse client base.
Software solutions to support digital transformation
As with any new venture, exploring the ways digital transformation can aid your team is not without its challenges. Internal resistance from your team, added cybersecurity risk, compatibility concerns, and managing the training learning curve all pose potential issues. Some baseline options to overcome them include:
- Adding gradual migration to transform different aspects over time.
- Upskilling your teams so they know how to adapt to new processes and tools.
- Implementing policies and standards to ensure different teams are all following the same best practices.
- Staying informed about regulations to avoid any compliance issues.
- Maintaining a flexible project management approach, as client needs and business needs may change.
All businesses (including ConnectWise!) must navigate the unique challenges that come with digital transformation. For a glimpse into the business management solutions available to assist MSPs with this process, check out our webinar, ConnectWise Business Management: Exploring the Way Forward.
When it comes to embracing your own digital transformation, ConnectWise is here to support with best-in-class business management software and solutions. From business intelligence dashboards to automated billing and invoicing, take the next step in your journey toward digital transformation and operational efficiency by starting your free demo today.
