MSP Contracts to Avoid in 2024: The Importance of Cybersecurity and Workflow Optimization
In the ever-evolving landscape of technology, Small and Midsize Businesses (SMBs) are witnessing a significant shift in IT needs.
With the need for support and maintenance rapidly declining, SMBs positioned for the future are investing far fewer dollars in MSP-provided infrastructure services and reallocating that investment to workflow optimization and cyber security – both of which rely heavily on AI.
This article aims to guide SMB leaders in allocating their IT investment for the most value in 2024.
The Original Need for Managed Services
The traditional managed services model emerged in the early 2000s when operating systems were prone to unexpectedly shutting down or “blue screening.” At the time, businesses with as few as five employees like had an exchange server for email and file servers in their offices with substantial resources allocated to keep systems up and running.
Managed Service Providers (MSPs) automated and standardized the maintenance of these environments, creating a win-win for the small business to have stability for the technical infrastructure and for the MSP to have a profitable business providing that much-needed service.
Decline in the Need for Managed Services
Several factors have significantly reduced the need for Infrastructure Managed Services, including:
- Cloud Software as a Service – Complex Servers like Exchange for Email and SharePoint for File Sharing and Collaboration are now hosted and managed by Microsoft in the Cloud. No more patching these servers on “Patch-Tuesday” and hoping they run Wednesday morning.
- Windows 11 Stabilization – Microsoft has been working on significant stability improvements for Windows 11, which could lead to fewer system issues and lessen the need for IT support.
- Helpdesk Automation and Self-Service – Numerous factors have empowered end users to quickly resolve far more problems independently. Just some of these are vendor-curated knowledgebases, advances in search engines, ready-access to media libraries that are content reach with how-to’s such as YouTube, and now AI’s reasoning engine and large language model are readily accessible via tools like ChatGPT and Bing.com/Chat.
IT Spend is Still Critical
While these factors may reduce the need for traditional managed services, they don’t eliminate the need for IT Services. Cybersecurity, workflow optimization, and other IT needs remain critical.
Rise in Cyberthreats and Protections
In “Harry Potter and the Half-Blood Prince,” the British Prime Minister converses with the Minister for Magic. The British Prime Minister, overwhelmed by the gravity of the situation and the threat Voldemort poses, exclaims, “But you’re wizards! You can do magic! Surely you can sort out — well — anything!” In response, the Minister for Magic, Cornelius Fudge, says, “The trouble is, the other side can do magic too, Prime Minister.”
This is like our challenge with Artificial Intelligence (AI). It can be a great way to protect, but the hackers also have access to AI to attack. Threats are rapidly changing, and organizations must continue up their defenses.
In response to this escalating struggle, SMB IT investment in cybersecurity is increasing. About a fifth of the IT budget is dedicated to security. 47% of SMBs planned to invest in cyber security risk mitigation in 2023.
A primary driver for Cybersecurity capabilities is Cybersecurity Insurance. Rates and coverage are often affected by ongoing security policies in the software, MFA, anti-phishing testing and training, business-grade cloud VPN, third-party backups, and EDR.
Workflow Optimization and AI
Workflow optimization involves streamlining processes within your organization to increase efficiency and productivity. This can involve everything from automating repetitive tasks to implementing new software that helps manage workflows more effectively. In 2021, two-thirds of SMBs said automation allowed them to compete with larger companies.
Some of the more common workflow optimizations we have designed and built for our customers are:
- Task Creation – This keeps the team on the same page regarding which tasks have been completed and which still need to be done. Examples include the referral qualification process and invoice collection processes.
- Template Creation – This standardizes document management. Examples include creating folders and subfolders to reflect process lifecycle steps along with standard Excel and Word templates for each step. Templates are implemented in all areas of the organization, including sales, operations, and back office.
- Alerts – These are triggered when tasks are late or neglected. Examples include opportunities without defined next steps, support cases without activity in the past 24 hours, and accounts without account management activity in the past 90 days.
Rethinking Long-Term Contracts
Long-term contracts are not in the best interest of SMBs.
MSPS and software publishers often strive for high-margin profitability in the later years of their contracts.
However, as technology continues to change, it is critical to have the flexibility to shift that IT spend from maintenance of older stabilized technologies to critical newer strategic innovation, such as workflow optimization. These require short-term annual or even month-to-month agreements.
In Conclusion
The landscape of IT for SMBs is changing rapidly.
While annual or even 3-year managed services and help desk support were once the primary focus of IT spending, the trend has shifted away from these as they are not needed as much, and they are not flexible enough to face the rapidly changing world we are in today.
Instead, invest in a strong SAAS foundation managed by the software publisher (e.g., Microsoft 365 Business Premium, QuickBooksOnline). Take those savings and invest them in critical areas today – cybersecurity and workflow optimization.
By understanding these trends and adapting accordingly, you can ensure that your organization is in a good position for the future.
