Understanding the MSP Value Chain

Author: IT Glue’s Joshua Oakes
Author: IT Glue's Joshua Oakes

In management literature, the value chain is a tool by which executives understand how the different activities their organization conducts contribute to the value that the organization generates. The point of understanding the value chain is simply to understand where your organization creates value, and where it might be leaving some value on the table.

Let’s look at a basic ticket. The basic workflow of a ticket is to create the ticket -> investigate the ticket -> solve the problem, or escalate. Borrowing from classic value chain concepts, you can see opportunities in how tickets are created. You can’t automate all ticket creation, but I think we can all agree that the combination of a RMM, expiry notifications and a PSA all streamline the ticket creation and management process to substantial efficiency gains.

Solving the problem is a combination of identifying assets and processes. A well-documented environment makes it much easier to learn what you need to know about configurations, passwords and other key pieces of information. SOPs and schematic diagrams help you navigate the process of solving the problem. Make all of this information easier to find, and you’ll add value by lowering your cost of doing business. In fact, great SOPs can help lower the labor cost because you’ll need fewer senior techs if juniors can handle more.

Documenting when you set up an environment in the first place is a clear path to value creation, because it’s easier to do it right from the beginning, and then you can automate a lot of the updating. Setting up comprehensive, structured documentation makes all the downstream processes smoother, too, compounding the value creation.

Labor is one of the biggest costs any MSP faces, so anything you can do that lowers your labor costs by making your techs more efficient is a no-brainer. This is doubly true in markets (most of them!) where finding good people is hard. This is where putting information at their fingertips adds value.

You can actually do whatever you want with that value. When your operating margins are better, you can compete on price to grow revenues, or you can pocket more profits to reinvest in growing the business. The choice is yours - and it starts with finding ways to extract more value from everyday operations.

Joshua Oakes is a content writer at IT Glue, which develops documentation software for MSPs. Read all IT Glue blogs here.