Service agreement tracking could be the fix your MSP needs to succeed

Missed obligations. Revenue leakage. Dissatisfied clients.

For an MSP, the root of these problems often comes down to a mismanaged service agreement.  

Relying on a patchwork of spreadsheets and emails to manage service agreements can lead to a fragmented view of your performance metrics, not to mention time lost in manual processes. 

This fragmented approach can result in overlooked renewals, missed billing opportunities, and an inability to gauge true profitability. It also complicates compliance and risk management, as there is no centralized view of all client agreements and their associated metrics.

The solution lies in transforming how service agreements are tracked and managed. Moving from manual processes to integrated, automated tracking systems allows you to gain a comprehensive, real-time overview of your commitments. 

Let’s explore why automating service agreement tracking isn’t just a necessity but a strategic benefit for MSPs. We will discuss the significance of agreement profitability, its impacts on business strategy, and why traditional manual tracking methods are no longer viable in a rapidly evolving industry.

The cost of tracking manually

Manually tracking service agreements involves hours per week of time and effort, is vulnerable to human error, and sometimes results in outdated or incomplete information. The lack of a unified system to track agreements leads to inefficiencies and missed opportunities.

When monitoring your agreements, keeping track of the long-term trends in the agreement metrics can also be difficult. MSPs agree that getting data out of ConnectWise PSA is hard enough, but tracking that data over time to look at the historical trends at a high level is even harder. 

That’s why MSPs are innovating through automated tools, like Cognition360’s business intelligence tracking. Moving the tedious data monitoring and collection tasks to an automated, accurate system allows your MSP to avoid human errors and hidden costs.

While manual tracking might seem cost-effective at first glance, it carries hidden costs:

• Administrative Overhead: Staff takes time to review data, determine the right filters, and compile it into a report. The hours each week spent on this process could be better utilized on work progressing the business forward, generating value for the MSP. The time burden scales the wrong way too – the more you succeed and grow, the more you spend reviewing and reporting.
  
• Revenue Leakage: Overlooked billing and untracked service costs can result in revenue loss. By adopting a more accurate, automated business metrics platform, your MSP can see the trouble spots in your processes and work to address them.
  
• Opportunity Costs: Inefficiencies in tracking can lead to delays in identifying and capitalizing on new business opportunities. You might miss potential opportunities because your well-intentioned processes are slowing down your team. Or they might need more resources to catch up on backlogged work.

Automate your way to service agreement profitability

By tracking the ongoing metrics of your service agreements, your MSP can measure the financial health and efficiency of the services you provide for your clients. MSPs need to understand the revenue generated versus the service costs, ensuring that each client agreement contributes positively to the bottom line.

For example, an MSP may undercharge clients due to untracked additional services, leading to substantial revenue shortfalls over time.

Understanding the profitability of each service agreement allows MSPs to:

• Identify High-Value Clients: Focus efforts on clients and agreements that generate the most profit. By watching the metrics and tracking the trends in your business, you’ll be able to see which clients demand the most service relative to their service agreements and the expenses that service demands. Armed with the knowledge of how the client relationship is performing will help MSPs identify what makes a good client for them and can use that knowledge when onboarding new clients.
  
• Inform Pricing Strategies for Low-Value Clients: Make data-driven decisions on service pricing to maximize profitability. By analyzing service agreements, MSPs can see the objective realities of their business agreements regarding their pricing structure. If an MSP wants to adjust their pricing, they’ll make a more informed decision based on objective data. Low-value or unprofitable clients need to have their agreements realigned to reflect the service you’re delivering, or you need to reconsider keeping them on.
  
• Optimize Service Delivery: Allocate resources to areas that create the highest returns. Just like with pricing, consistently monitoring your metrics allows MSPs to make informed adjustments to their workflow, staff resources, and processes. With the backing of objective data from your own business, you’ll be able to find the right balance between sustainable operations and high-quality service.

How automating service agreement tracking impacts business strategy

Metrics are the lifeblood of informed decision-making and can help MSPs make decisions. But long-term success needs a long-term plan. That’s where business strategy comes in. Using the data and trends, MSP leadership can set short-, medium-, and long-term goals and develop a plan to accomplish them.

Let’s say an MSP discovers that many of its support tickets are tied to one type of issue. While addressing the problem at the time, the MSP should also investigate the root causes behind why that was happening and create a plan to address business-wide going forward.

This type of planning leads to increased client satisfaction and better team performance, which can help keep clients and earn new ones.

Metrics enable MSPs to:

• Drive Service Improvements: Use data to refine service offerings and enhance client satisfaction. MSPs can see if staff is being slowed by internal processes and make changes to the workflow or provide the team with more resources to help them provide better and faster service to clients.
  
• Strategically Plan for Growth: Leverage insights to find opportunities for projects and long-term goals. Seeing historical data and trends in your business metrics makes long-term planning much more impactful. MSPs can optimize resource allocation, staff time, and the tools used to achieve their goals.
  
• Adapt to Market Changes: Quickly respond to evolving client demands and industry trends. With insight into your own business, you’ll be able to see how your business operates and can adjust your operations to adapt to new innovations, strategies, and technology as the market evolves. 

Take the next step in metric tracking

Knowing how your business operates on a deeper level can be the key to a more profitable and growing business. Relying on old methods is time-consuming, inefficient, and expensive, and it will leave you behind the competition.

Cognition360 helps MSPs of all sizes leverage business data to grow and scale.

As a centralized platform, Cognition360 makes it easy to aggregate ConnectWise PSA data to get you the metrics you need. Increase your profitability by following where your expenses are, drill into reports to find root causes, and make better decisions and long-term plans.

Want to see how Cognition360 works for yourself? Check out our on-demand demo today.