How TMB profitably transitioned from VAR to MSP with ConnectWise Command
Technology Means Business
Technology Means Business (TMB) is a London-based managed service provider (MSP) with decades of experience in the IT services space. A few years ago, Director of Technology Richard Shuker began exploring the prospect of transitioning from a break/fix, value-added reseller (VAR) model to the more modern managed services model.
“Prior to transitioning to an MSP business model, we noticed that we were generating more overage invoices for customers. That would, in turn, generate more invoice queries, driving up admin and tech costs.”
– Richard Shuker, Technical Director of Technology Means Business
Making the transition from VAR to MSP seamless
Marketplace demand for the MSP model was rising. Predictable pricing made it attractive to technology service providers and customers alike. As Shuker evaluated the MSP landscape, two things became apparent: There was a demand for this service model, and there was a sizable maturity disparity amongst existing companies calling themselves MSPs.
“Most organizations calling themselves MSPs were still using break/fix practices. At the same time, others with 10-plus years of experience were incredibly mature, process-led, and value-driven,” explains Shuker.
This disparity in definition versus delivery caused Shuker to dig deeper into what a true MSP model entailed as well as how to navigate that transition successfully. Since he didn’t have ten years to invest in a shift, he knew that finding experienced technology partners would be essential to launching a mature and profitable model in a matter of months.
The profitability problem with the break/fix model
The paradigm shift from break/fix to recurring revenue is quite significant. Shuker explains: “Prior to transitioning to an MSP business model, we noticed that we were generating more overage invoices for customers. That would, in turn, generate more invoice queries, driving up admin and tech costs.”
The managed services model, on the other hand, is about streamlining operations. This means greater automation and outside support, fewer tickets, fewer invoices, and more meaningful strategic work for technicians.
Partnering to achieve a mature MSP model faster
TMB opted to replace several existing tools from different vendors with a unified management solution called ConnectWise Command. This solution not only equipped TMB with a more comprehensive, single-pane-of-glass RMM platform but also an outsourced NOC. These two capabilities enabled the organization to deliver 24/7 support and monitor 3,000 different system requirements for customers.
“Over years of creating, refining, and maturing their RMM, ConnectWise Command created and automated 3,000 checks to run across customer servers. That’s way beyond anything we had the resources, time, or capability to create in-house,” says Shuker.
As a result of more comprehensive monitoring tools, the number of tickets initially rose quite a bit. However, this was a temporary and essential part of delivering more robust and secure services.
“Upon deploying agents across our customer base, tickets were coming up for things we’d never thought to check. For example, one customer had a domain controller that was misconfigured with a dynamic IP address. ConnectWise Command found that straight away, and we resolved the issue immediately,” recalls Shuker.
Over time, the number of overall tickets TMB received decreased by 50 percent. Thus, the initial spike proved to be a worthwhile investment that solved root problems, reducing recurring issues.
The 3,000-point system checklist in the ConnectWise Command RMM solution helped TMB better define onboarding standards. Instead of making a list of outdated hardware to be replaced eventually, TMB now requires certain critical hardware items to be replaced before moving to a managed services contract.
Three essential steps to service delivery model transformation
Reflecting on TMB’s transition from VAR to MSP, Shuker recounts four factors that made the journey a success: planning, KPI tracking, and culture change management. Below, Shuker explains how he approached each of these steps.
1. Create a plan
To ensure a proper grip on the new service model, TMB invested time in aligning their new service definitions with ConnectWise Command capabilities to ensure accurate expectation-setting with clients.
Additionally, TMB determined which KPIs to track, educated technicians on the new solution using ConnectWise University, and created a gradual client transition plan.
“We transitioned our clients as contracts came up for renewal or as circumstances dictated it was the right point with that customer—to go hand-in-hand with a migration project or similar activity,” explains Shuker.
2. Decide what to measure
“Have a strong set of KPIs, but not too many,” Shuker advises. “We focused on measuring and benchmarking activity level [tech time, number of tickets, invoices], customer service, and work quality through and beyond the transition.”
3. Help your culture transition
“It’s normal for engineers to be masters of their current RMM. Moving to a new system means starting over, so it’s normal for them to oppose such a change. You must help engineers see the value in the new service,” states Shuker.
Beyond product adoption, this requires new mindset adoption as well. Instead of generating new projects under a break/fix model, engineers should aim to optimize efficiencies within the platform—generating fewer tickets, better service, and greater profitability.
Results: increased scalability, fewer tickets, and greater profitability
“With our outsourced NOC from ConnectWise Command, we can onboard hundreds of servers in one go. Beyond automating software deployment, the solution deals with all the issues found in the estate, so internal teams don’t get stretched beyond capacity,” explains Shuker.
Increasing profitability from the get-go, TMB’s transition from VAR to MSP enabled the organization to reduce the number of service tickets by 50 percent while broadening service offerings and growing revenue by around 40 percent over 18 months.
“As the ticket load and backlog decreased, our operation became real-time with same-day ticket resolution. What’s more, our service desk is now one of the most profitable parts of our business in terms of gross profit percentage—and that includes the ConnectWise Command costs in that department,” concludes Shuker. To learn more about ConnectWise Command and how it can help your organization deliver and scale a managed service offering quickly, click here.