4 Common MSP Challenges To Look Out For (+ Their Solutions)

Mehedi Hasan Shoab
January 3, 2023
min read
September 19, 2023
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Thinking about how to combat MSP challenges now and in the future? Here’s what you can do, plus answers to a few burning questions.
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Large enterprises are turning to MSPs to extend their overburdened IT departments. There has never been a better time for MSPs. As technological adoption accelerates, the need for remote monitoring services is growing.

Organizations are looking for reliable partners that can provide consistent service and support. However, they themselves are more likely to merge disorganized systems, anticipate downtime, and deal with the inevitable internal clashes. 

Plus, managing complex IT environments can be very difficult. So, it’s bound for them to come across MSPs challenges your organization may encounter. Some of these are more outrageous than others. If you’re experiencing any of these issues, it may be time to learn what you can do to fight them.

What does an MSP do? — A brief overview

According to Gartner, “A managed service provider (MSP) delivers services, such as network, application, infrastructure and security, via ongoing and regular support and active administration on customers’ premises, in their MSP’s data center (hosting), or a third-party data center.”

In layman's terms, MSPs perform administration services on particular IT subfields, like data storage, or particular vertical industries, such as legal, financial, healthcare, or manufacturing.

They’re in charge of handling the day-to-day technical difficulties and keeping systems running smoothly. This can help organizations focus and be more productive in their core functions.

MSPs can support your IT implementation plan and your organization's expansion. They often begin with an evaluation to identify the company’s current technological state, growth potential, and ways to support business objectives.

However, collaborating with so many people may not always be smooth sailing. MSPs come across multiple issues as they begin working with a new partner.

4 Major challenges that MSPs face & their solutions

For enterprises of all sizes, using the services of a managed service provider (MSP) can change the game. But managing complex IT environments may be quite challenging. Kaseya’s Datto Global State of the MSP Report surveyed 1,800 MSPs worldwide and they ranked their biggest challenges as follows:

  • Competition – 29 percent rated this as their top concern.
  • Revenue growth and profitability tied – 28 percent ranked these as pressing challenges.
  • Acquiring new customers and hiring tied – 24 percent felt these were difficult for them.

Understand that these challenges can range from minor to severe. It might be time to find out how these are all tied together to prepare yourself better.

Challenge #1: Regulate security risks

Cybercriminals are increasingly targeting MSPs. In fact, from 2020 to 2021, there were 67 percent more attacks against managed service providers. The greatest MSP will therefore be a cybersecurity expert who incorporates security services into its services. Phishing and hacking incidents are more common than you might think. Often these problems can become quite expensive and can affect overall revenue.

Solution #1: Be on top of cybersecurity updates

No matter what industry MSPs are operating in, they must be updated on all the security measures. This means they must train employees to recognize potential security risks and various indicators of cyberattacks. 

Plus, employees are working in a hybrid or remote work environment. This exposes them to even more security threats, risks, and vulnerabilities. It should be a serious concern if MSPs don't deliver new cybersecurity solutions nearly every quarter.

Challenge #2: Difficulty integrating new technology solutions

The COVID-19 pandemic has caused remote work and cloud adoption to the peak. With the rapid increase in security attacks, the cloud is seen as an effective way to enhance data security. Shane Sloan, CEO of Access Technologies, also stated the importance of cloud adoption:

“Staying up to date with all of the emerging cloud services, which ones are here to stay and which are valuable to our customers.”

However, selling these solutions requires an entirely new approach. This means additional training and specialization for the sales and marketing team, which can be costly and time-consuming. Adding new services can increase revenue but shrink margins for MSPs (at least in the short run).

IoT is also transforming current business practices, so it’s become increasingly important for MSPs to get with the times.

Solution #2: Keep up with technology trends

With more new technology on the horizon, looking into a proper digital adoption strategy is important. Recognizing changing tastes, many MSPs should already add specific specializations to their service packages. They must offer their customers the management, deployment, and development of their new technological infrastructure.

Challenge #3: Customer retention

In the increasingly difficult managed services market, retaining customers is just as important as acquiring new ones. According to Statista, 39 percent of survey respondents from EMEA stated acquiring more customers will be a leading challenge for managed service providers (MSPs). 

New MSPs emerge and challenge existing MSPs with lower prices for nearly the same service package. So, they must remain vigilant and provide third-party operations, including controls, network management, expert support, ongoing maintenance, system updates etc.

Solution #3: Provide value to customers

Demonstrating value to their customers is the best way to counter this. Be honest with your customers about their concerns and build trust through clear and constant communication.

Holding regular meetings, and building good relationships with customers. Also monitor the quality of your solution after implementation and perform integrations. If communication is lacking, MSPs can't provide everything their business needs, which becomes a challenge. 

Retaining customers also allows you to grow your customer base even further. This could add new customers to your list if you manage your service well.

Challenge #4: Maintain customer & own productivity

Business leaders recognize the need to prepare for all kinds of contingencies and organize themselves to face an uncertain future. COVID proved that MSPs must initiate comprehensive and robust business continuity and disaster recovery plans to meet changing demands.

Keeping employees happy is the best choice for doing so. With security training and updating technical knowledge, employees and MSP providers are burdened with multiple tasks. This hampers the efficiency of completing more important functions.

Solution #4: Embrace automation in the workforce

To differentiate yourself as an MSP, automate as many processes as possible.

Automation makes life easier for MSPs too. It increases productivity and reduces operating costs so they can focus on other important things like proactive customer support.

By using automation tools, MSPs can:

• Reduce time spent by IT consultants on routine and repetitive tasks.

• Free technicians for revenue-generating activities.

• Reduce service delivery costs.

So choosing the right automation solution for MSPs is crucial as it can directly impact company performance. The best way to save time is to use MSP documentation software like Scribe.

Here’s a simple Scribe to integrate Salesforce with your Gmail account:

When integrating new technology, always be on the safe side. A lacking security plan can leave your organization vulnerable and lead to various issues, including access logging, compliance, and security when employees leave the company. 

So it helps MSPs up their game and beat the competition. Or they can fall behind.

Overcome MSP issues using Scribe as a solution

In a growing market, managed service providers (MSPs) are looking to attract new and existing customers through innovative, value-added that drive revenue growth. But that alone isn’t enough to ensure a profitable business. 

MSPs' biggest challenge is streamlining the workflow process in an organization. Scribing training guides and manuals can help complete tasks more efficiently. You can even edit and update them if procedures are updated over time.

Here’s what one of our users has to say:

So, with the tools in hand, get started on sharing best practices across the organization.

MSP FAQs with top questions & answers

Q: What problems does MSP solve?

Ans: An MSP identifies all current threats and creates emergency communications plans. In that case, they develop an evacuation strategy and a business continuity plan.

Q: What makes a good MSP?

Ans: MSPs should focus on making their products and services the best they can be. For example, some MSPs may be working to provide impenetrable network security to various industries around them. This can later be applied to other verticals.

Q: What challenges MSPS face when protecting SaaS application data?

Ans: MSPs and their clients are exposed to significant cyber risk due to the rise of remote work. Most industries do not properly protect their SaaS tools and use multiple providers. This creates even more threats to the organizational infrastructure.

Ready to try Scribe?

Scribe automatically generates how-to guides and serves them to your team when they need them most. Save time, stay focused, help others.