Managed service provider (MSP) operations involve managing and maintaining a client’s IT infrastructure, including networks, servers, security, and applications. The aim is to allow businesses to focus on their core functions rather than managing day-to-day IT tasks.
These services are critical for businesses today, and challenges like cybersecurity remain at the top of their minds. For example, over 60% of small and medium-sized businesses (SMBs) experience cyberattacks. This is one reason nearly 90% of SMBs use an MSP service or consider investing in one.
Meeting such a huge demand requires seamless and efficient MSP operations—MSPs must step up to streamline their services and cater to all types of businesses' unique needs. Every customer touchpoint and service, from initial consultations to payment processing, must give different clients the same peace of mind and confidence.
Below, explore actionable tips, helpful tools, and powerful strategies that MSPs can use to streamline operations and enhance efficiency.
What are MSP operations?
MSP operations involve managing and maintaining a client’s IT systems to ensure consistent system performance, prevent cyberattacks, improve customer experience, and support business continuity.
An MSP’s operations provide different services to companies depending on their selected package(s), including:
- Network monitoring
- Security management
- Infrastructure management
- Backup and disaster recovery
- Compliance and risk management
- Patch management
- Help desk support
- Reporting and analysis
- Capacity planning
For instance, a partial package can include monitoring and maintenance, whereas a full support package entails monitoring, management, help desk support, and capacity planning.
These services directly impact client satisfaction (and that of clients’ clients), service delivery, and profitability. Accordingly, MSPs must ensure efficient operations to support their clients’ day-to-day, let alone scaling.
Common challenges with MSP operations
Despite their efforts to improve service quality, MSPs still contend with multiple challenges that impact their operations, including:
- Managing increasing client expectations: Client expectations are dynamic, influenced by trends, new technologies, and growing operations. A spike in expectations can overwhelm MSPs, sometimes impacting the quality of services and stretching out existing resources.
- Scaling operations while maintaining quality: Scaling an MSP business presents a challenge regardless, but without a well-crafted plan, this pursuit becomes exponentially more complex. The team must manage varied costs, products, personnel, and service level agreements (SLAs) without compromising client quality.
- Keeping up with new tools and technologies: Technology advancement is a double-edged sword. It provides new tools for improving operations while demanding costly investments and integrations. Implementing a new platform will deliver considerable returns on investment (ROI) in the long run, but only after choosing the right one for a given MSP or MSP client. Understandably, up to 32% of MSPs report that integrating new solutions presents the biggest challenge when developing a new partnership.
- Security and compliance challenges: Security threats have become more advanced and sophisticated, requiring MSPs to continually enhance their services to address new tactics and comply with various regulations, such as NIS2, HIPAA, PCI DSS, and GDPR rules.
As the cyber landscape evolves, MSPs face challenges in addressing new threats and keeping up with fast-changing technology. Per one survey, 35% of respondents revealed competition was their top challenge in 2024, while in another, 39% reported setbacks when integrating advanced security technologies.
How to optimize MSP operations
These challenges are typical for MSPs, and with the right strategy, they can be addressed. Here are best practices for optimizing MSP operations to ensure efficiency and manage challenges.
Audit your existing processes
MSPs must audit their existing processes to understand their IT environment and pinpoint inefficiencies and bottlenecks. They can leverage employee surveys and IT health dashboards to get invaluable insights into their processes and performance. Third-party audits can also provide an invaluable outsider’s perspective and identify hidden gaps.
Improve your client relationships
Clients are the heart of any business, so it’s vital to ensure excellent customer service. To exceed industry averages, MSPs must aim for a ‘first-contact resolution’ rate (i.e., the percentage of support tickets and requests resolved during the affected party’s initial contact) of around 80%.
To that end, they must focus on:
- Understanding clients’ unique business objectives and needs
- Providing tailored solutions
- Ensuring proactive support to address issues
Evaluate customer service based on ticket response times, churn rate, average call answer time, and customer satisfaction score (CSAT) to identify and granularly track improvement areas.
Provide open communication and accurate reporting to keep clients updated. Also, ensure and consistently meet effective SLAs to let clients know what to expect and improve contract management.
Create an excellent team culture
A great company culture attracts and retains the best talent. Employees are 10 times more likely to quit due to poor culture. Instead, MSPs must create an excellent team culture to boost retention rates and customer experiences by:
- Listening to employees
- Offering training and development programs for career growth
- Helping employees appreciate their work’s value
- Encouraging open and honest internal communication
MSPs must also be thoughtful with benefits and perks. For example, they can offer work-from-home (WFH) or flexible hours to boost productivity. Commuter benefits like bike, train, bus, and car options can go a long way in motivating employees.
Team culture is critical in a field where as many as 70% of IT professionals report feeling burnt out.
Stay on top of your finances
Great financial health is key to seamless MSP operations, particularly monitoring and improving cash flow. Organizations must track KPIs like revenue, margin, cost of goods and services sold (COGS), and effective rates to ensure financial health.
Although these remain complex or time-consuming manual tasks, MSPs can use invoicing software solutions to:
- Reduce errors and delays via automated invoicing and billing processes
- Achieve real-time visibility into financial health
- Improve cash flow and financial decision-making
Depending on their packages, MSPs should also consider different pricing models for businesses. Common examples include per-device, per-user, tiered, value-based, and a la carte—most MSPs use a combination of per-user and per-device pricing models.
Focus on proactive monitoring and maintenance
For quality client services, MSPs must prioritize continuously monitoring clients’ IT infrastructure to identify potential issues before they escalate. This involves using predictive analytics and automated alerts to identify trends and stay on top of critical situations. Regular maintenance tasks like hardware checks, system backups, patch management, and software updates can ensure consistent performance.
Develop a robust security framework
A robust security framework is essential to protect an MSP’s IT infrastructure and client network from data breaches, cyber threats, and potential system interruptions.
MSPs must develop policies and procedures to prevent such risks, which involve:
- Establishing a cybersecurity policy and effective communication channels
- Creating an incident response plan
- Developing compliance strategies with standardized processes
- Drilling strategies and response plans for preparedness
These steps are vital building blocks for security incident identification, prevention, containment, eradication, and recovery. To stay compliant, policies and strategies should also consider rules provided by industry and security standards, such as CMMC, NIST, ISO 27001, and HIPAA.
Embrace automation
Up to 95% of MSPs believe that automation is necessary to channel resources to core functions and strategic goals. Leveraging automation tools enables MSPs to simplify and streamline workflows like billing, monitoring, and ticket management, resulting in better efficiency, faster service, cost savings, and scalability. Automation eliminates manual and repetitive tasks, allowing teams to focus on more complex work.
Leverage tools and technology
MSP operations can’t be successful without modern tools and technology like security information and event management (SIEM) systems, backup and disaster recovery (BDR) tools, remote monitoring and management (RMM) solutions (e.g., remote firewall administration), and professional services automation (PSA) software.
These tools simplify and streamline IT management services tasks like network performance monitoring, issue detection, and backups. Sometimes, it may also be worth developing partnerships with other service providers, such as a third-party data center or a cloud provider facilitating remote application hosting.
However, remember to leverage technology for purposes other than direct service delivery. The right implementation is particularly important for tasks like billing and invoicing. For example, MSPs can automate these tasks to avoid chasing payments.
This is possible with a solution like WisePay, which empowers MSPs to:
- Configure automated payments to streamline payments
- Offer flexible payment options to clients
- Eliminate human input to avoid manual errors
- Get real-time financial visibility with up-to-the-minute reporting
Payment automation can streamline end-to-end financial processes, from invoice management to payment collection. This results in benefits such as improved cash flow, error reduction, faster payments, and real-time notifications while also reclaiming employee bandwidth.
Review your operations regularly
MSPs must periodically assess their operations, including technical infrastructure, client management, internal processes, customer service, and service delivery. This is crucial to pinpointing bottlenecks, identifying areas for improvement, optimizing efficiency, and ensuring they’re meeting client needs. Establish regular review schedules, action plans, and performance metrics to address detected issues and implement improvements.
Trends shaping MSP operations in 2025
As MSPs adopt a proactive approach to enhancing their business operations, it’s crucial to pay attention to trends that are defining the sector, including:
- Artificial intelligence (AI) and machine learning (ML): MSPs are increasingly adopting AI and ML to automate repetitive tasks, implement predictive maintenance, and improve efficiency. For instance, AI-automated recurring billing can reduce manual workload and ensure timely payments.
- Integration of multi-cloud management tools: MSPs increasingly rely on multi-cloud tools to ensure flexibility, scalability, remote support work enablement, and effective data recovery.
- Advanced cybersecurity: As attacks become more sophisticated, advanced cybersecurity becomes increasingly critical to ensuring proactive threat detection, incident response automation, and compliance management.
These trends continue to shape and redefine the industry as MSPs adopt more proactive, data-driven approaches to managing IT infrastructure. They prioritize security and adaptability to evolving business needs.
Improve your MSP operations with automation
Growing a successful MSP demands streamlining operations to manage every client task. MSP automation can simplify tasks like payment processing, patch management, ticket routing, client onboarding, data backups, and reporting, allowing teams to focus on more complex issues.
Automation ensures operational efficiency and eliminates human errors in MSP operations. It makes it simple to scale your MSP and improve clients' experiences. It’s truly redefining!
WisePay, for example, automates payments for MSPs to streamline accounts payable and receivable management. MSPs can generate invoices automatically at set intervals and eliminate error-prone manual entries. With fully automated payment reconciliation, WisePay saves time for accounting teams and offers real-time visibility into cash flows.
Explore how WisePay will transform your business into a thriving MSP.
