Managed Service Providers (MSPs) that excel in aiding customers make holistic strategic decisions about which functions to outsource are most likely to achieve success, as per Greg Jones (pictured), Vice President of Business Development EMEA at Kaseya.
A key motivator for outsourcing is the role of MSPs in simplifying the complex journey of digital transformation for their clients. Additionally, numerous businesses, hindered by slow innovation, are turning to MSPs for assistance in determining which processes need transformation and in strategising the progression of their digital initiatives.
“Leaving the technology, and the related security, to the experts takes the headache away from digitalisation and allows SMEs to focus on their core business,” said Jones. “Furthermore, tech talent is hard to find and expensive, so many businesses can’t recruit the technical resources they need, fuelling the outsourcing trend.”
Outsourcing is becoming prevalent in various industry sectors, yet there is a specific kind of company increasingly seeking outsourced services. “Typically, those organisations with ambitions to grow, want to do more with technology and leverage automation,” commented Jones. “The pandemic has brought more technology awareness, and the most ambitious businesses are striving to gain a real competitive advantage through technology.”
Demand for security
According to Jones, security services are in highest demand because they are not only crucial for all organisations but also challenging to implement effectively.
“Next are consultancy services, as businesses are seeking guidance around how to embed technology into their organisation to boost innovation,” he added. “There is also an element of having to adopt market leading technologies to become an attractive employer. The younger generation of employees especially have certain expectations when it comes to the tools they use in their daily work. Not just collaboration tools, but also tools specific to their profession. For example, case management platforms in the legal sector.”
Jones also noted an increase in the use of customized services, with a significant rise in demand for social media, web development, marketing, public relations, and design. “Businesses are outsourcing services across the spectrum as they need more scalability and agility,” he said. “This is not limited to ICT outsourcing. We are seeing functions that used to be handled in-house such as HR, legal and finance being outsourced. Additionally, platforms like fiverr.com are becoming popular among businesses wanting to work with freelance designers, copywriters and more.”
Outsourcing is broadening its scope to include new areas such as innovation and R&D, Jones pointed out. “Nowadays, it’s possible to outsource almost anything and some companies are doing exactly that so they can focus on their core business,” he added. “It’s possible to claim research and development (R&D) tax reliefs but many SMEs don’t know what they can offset under R&D. MSPs can provide valuable advice in that area, as well as advice on key innovation projects. It’s worth bearing in mind that innovation doesn’t always mean implementing a new technology. Some of the biggest results can come from transforming existing business processes. Again, partnering with an MSP can help SMEs drive this innovation forward.”
Emerging technologies
The primary areas for growth opportunities at present are in Artificial Intelligence (AI), Machine Learning (ML), automation, and security. This observation highlights that MSPs are increasingly integrating AI into their software and platforms, often in a behind-the-scenes manner, which in turn offers indirect benefits to their small and medium-sized enterprise (SME) customers.
“ML is increasingly playing a role in functions such as customer service,” he added. “For example, you can use ChatGPT to write customer emails, and the skill is in how to brief ChatGPT to get the desired result. MSPs can play the role of educators here and will have to keep up to date with the rapid technological developments.
“Bridging the digital and physical world will be vital as we move forward with technologies such as AI, ML, Web3, the Metaverse and quantum computing.”
According to Jones, outsourcing is changing the way businesses work as the focus shifts from completing tasks yourself to managing the outsourced relationship. In that respect, new and different skillsets are required to get the most from outsourced services. From an MSP’s point of view, they should think carefully about how they procure, manage and deliver new services.
A major challenge involves staying current with the rapidly evolving market and seizing the new opportunities emerging from trends in outsourcing. “We’re at the beginning of a new wave of outsourcing and I expect that in the future businesses will outsource most of their non-core functions,” stated Jones. “MSPs will have to keep up with this demand and how they support their clients in making outsourcing work for them. Also, we are shifting into a more collaborative era where not only MSPs and their SME customers, but also third parties all work together. End customers will no longer just buy a product or a service. Instead, there will be several parties involved in any business process flow. Communication will be key. MSPs can support this with the right consulting services.”
Jones states that we are currently experiencing 'exceptional times'. “The evolution and convergence of technology and business is incredible, and it will become even more important for MSPs and SMBs to quickly embrace change as we enter the new digital era,” he enthused. “Bridging the digital and physical world will be vital as we move forward with technologies such as AI, ML, Web3, the Metaverse and quantum computing.
“We are only just now seeing what is possible with technology. For businesses to thrive and succeed in the rapidly approaching new digital era they will need to allocate time for training, development and education – all of which represents a compelling opportunity for the channel’s future-focused MSPs.”
