OperationsChapter 2
Business operations
Improved measurement and employee engagement help MSPs operate better.
Business operations:
Managing projects and growth prove challenging—but better measurement and employee engagement could unlock efficiencies
MSPs are looking to mature their operations in 2025, with project management and sales and marketing growth being key concern areas. Those who rigorously track staff efficiency and the client experience are finding more success. However, opportunities for employee growth—especially among customer-facing roles—could unlock even better operational performance.
Most MSPs focus on tracking productivity and resolution times; Leaders go deeper on staff efficiency and client service
Operational metrics MSPs track
Technician productivity
Employee turnover
The most popular operational metrics MSPs track is technician productivity at 54%. Other popular metrics focus on consistency and speed of service, like average resolution time, service uptime, and ticket volume. Employee turnover is also a closely monitored metric for 44% of respondents, which may reflect concerns MSPs have about the costs associated with replacing experienced talent.
Within an MSP, different roles tend to focus on different metrics. For instance, those in customer-facing roles (account managers, customer success managers, etc.) are much less likely than executives or technical roles to say they track ticket volume, resolution time, and mean time between failures. Ideally, customer-facing teams should partner closely with technical service teams to get a clear picture of customer health so they can speak to any issues with their customers confidently.
Those with high annual revenue, ARPU, and projected growth rates are more likely to monitor some of the least tracked staff productivity and customer service operational metrics (compared to average respondents, including:
- Escalation
- Rate
- Resource
- Utilization Rate
- First Contact / Level
- Resolution Rates
- Aggregate Service
- Desk Productivity
- Mean Time Between
- Failures (MTBF)
Project management, sales and marketing top list of inefficient business areas for MSPs
Inefficient business areas
Project management and delivery
Sales and marketing
When asked what the most inefficient area in their business is, MSPs responded overwhelmingly with one answer: project management and delivery. These project management issues may be why only 34% of MSPs sell Project Management and Delivery as a stand-alone service.
Concerns around project management efficiency were true for MSPs regardless of their size or performance. In fact, high performers across a number of areas (including APRU, recurring revenue, total revenue, CSAT scores, and staff utilization) are _more_ likely to feel that project management is their least efficient area. This suggests that being concerned about project management may positively influence client success, staff efficiency, and, ultimately, revenue.
The next most common weakness was sales and marketing efforts, at 34%. Mid-to-large size MSPs are more likely to place sales and marketing inefficiencies as their top concern—meaning maturing these operations is vital for scaling for larger MSPs. Those with high client retention rates are also more likely to feel sales and marketing are inefficient. Perhaps they don’t feel supported by sales and marketing when it comes to driving customer retention—which should be a cross-company initiative.
MSPs overwhelmingly felt project management and delivery was the least efficient area of their business—no matter their size or performance.
“Many [MSPs] don’t have a project management background. They don’t understand how to run a project, properly estimate it, or communicate during it—so I understand why 86% of MSPs said it was inefficient. We always write a project plan before we execute on the project, and then it's reviewed by the team.”
“MSPs often use an engineer who is really good at delivering the project, but not at understanding the project framework that needs to be followed. That's really the most important. We have project managers and we find that our framework is very effective. That helps keep us—and the customer—on schedule and prevent scope creep.”
Strong business plans lead to better outcomes, but some MSPs may fear long-term planning
Business planning horizon
Have developed a business plan
Plan at least 6 months ahead
Plan for the year ahead
No formal plan
The vast majority of MSPs (85%) have developed a business plan. 40% of respondents have a strategic business plan for at least the next 6 months, while the next biggest group (33%) have one for the year ahead. Small MSPs are more likely to have no formal plan, while larger MSPs are more likely to have year-long or multi-year plans.
Compared to ScalePad’s 2024 Trends report, more MSPs are engaging in formal business planning for 2025. In 2024, 11% said they had no strategic plan, while this year only 9% don’t. Those with sixth-month plans increased by 5% in 2025. Interestingly, year-long planning stayed flat while multi-year planning decreased 7% this year—suggesting that MSPs may be worried about longer-term planning due to economic or regulatory uncertainty.
Regardless of size, it’s worth noting that high performers across a number of categories (including CSAT, retention rates, and staff utilization rates) are more likely to have a business plan for the next year or few years—proving that creating concrete, long-term plans can drive better business outcomes.
Account Managers and Customer Success Manager roles are less likely to say their business has a long-term plan—which may suggest they’re either unaware of the bigger picture or don’t see the growth or development of their department reflected in these plans.
MSPs rely on CRMs and ticketing tools to run their business, overlooking business intelligence and collaboration solutions
The most common non-technical solutions MSPs use to help run their business are customer relationship management tools, help desk and ticketing software, and project management software. Clearly, MSPs see the value of having solutions for tracking customer relationships, managing support effectively, and confidently leading client projects.
Even though 41% of participants have project management software, MSPs overwhelmingly rate project management and delivery as one of the most inefficient areas of their business—which may suggest solutions aren’t meeting their needs or that software alone isn’t enough to execute projects effectively.
About a third use time tracking, quoting/invoicing, documentation, internal collaboration and marketing automation tools. MSPs who want to improve both staff productivity and the customer experience may want to consider increasing their use of these efficiency and client communication tools.
Professionalizing business operations with software tied to higher client satisfaction, retention
MSPs with best-in-class customer satisfaction scores are more likely to use vCIO, business intelligence, and documentation software. MSPs with high retention rates are more likely to use project management, time and resource management, and documentation software. They’re also more likely to use invoicing software, as are those with high staff utilization rates. Professionalizing how MSPs handle billing, consultation, projects, and reporting through software clearly plays a role in improving client satisfaction, retention, and overall productivity.
Employee productivity + retention
High staff utilization rates tied to higher CSAT, client retention, and ARPU
Staff utilization rate
26-75% utilization
76%+ utilization
Over half of MSPs (64%) say their utilization rate is between 26% and 75%. Close to a quarter (18%) are high performers with rates of 76% or more.
Small MSPs are slightly more likely to have lower utilization rates than their larger peers—but they’re also less likely to be tracking it compared to their peers, meaning it may not be a priority to them. However, when we look at utilization rates by MSP size across those with the highest revenue, rates are fairly consistent, regardless of size—suggesting that small MSPs focused on this metric may perform better financially than their similarly sized peers.
Those with higher ARPU, CSAT, and retention rates are more likely to also have higher utilization rates (above 75%). This suggests that businesses who maximize their staff’s productivity can impact both the customer experience and the bottom line. It also helps MSPs judge workloads and when they may need to hire new employees.
75%+
The staff utilization rate those with higher ARPU, CSAT, and retention rates are more likely to have.
“ In the past, our goal was to have our people operating between 85% and 92% utilization. By tracking this, we could forecast when we needed another engineer or technician to come on board to take care of the clients that we either currently have or are about to have. It really solved the problem of what comes first: the new client or the engineer/technician?”
Employee upskilling priorities technical training and education over peer-based learning
Employee upskilling priorities
Technical training
Formal mentoring
Career planning
The majority of MSPs (67%) develop their staff’s skills by offering technical training, and about half offer higher education support and conference attendance. Formal mentoring and career planning fall in the middle at 43% and 42%, respectively, while personal learning stipends and memberships in professional communities fall in the bottom third.
Overall, most MSPs seem to offer a few different learning opportunities to their staff—suggesting that if they’re having trouble growing or retaining highly skilled staff, they may need to revisit their professional development programs and think outside the box to improve outcomes.
Large MSPs are more likely to offer higher education support, event or conference travel, and formal mentoring programs to train employees than smaller MSPs. Small MSPs may have to find creative ways to compete with these perks on a tighter budget. It should be noted that MSPs with the highest revenue, regardless of size, are much more likely to offer technical training and higher education support than the average. However, small MSPs with high revenue are more likely to lean into formal mentorship programs, while large revenue leaders focus on educational events, learning stipends, and long-term career planning.
Customer Success Managers and Account Managers are less likely to say they get technical training or formal mentorship, and slightly less likely to say they receive support for conferences or higher education. If MSPs want these vital, customer-facing roles to perform better, they may need to explore different programs and training than they’re used to for more technical roles.
Revenue high performers, regardless of size, are much more likely to offer technical training and higher education support to employees.
“We brought in a learning management system and combined it with a learning path program that defines engineer career pathways, so if someone's just coming in they know what steps they need to take to get to the next level. But the other component is to competitively pay them. We’ve found if you put too much into the bonus, it's too much of a variable. So you should try to give them better, consistent pay.”
Peer learning and career planning help high performers pull ahead
Those with high ARPU are more likely to offer formal mentoring programs to employees, while those with high CSAT scores are more likely to offer community memberships and formal career planning. Leaning into peer-to-peer skills building and personalized career development may play a key role in unlocking service excellence and commanding higher prices for your work.
Employee retention efforts center on pay and flex work, but culture and time off may offer an edge to smaller MSPs
The majority of MSPs are focused on using competitive pay and bonuses to retain staff, with flexible work arrangements, and career growth planning and promotions rounding out the top three tactics. Paying for travel to work-related events and generous time off policies are the least likely to be used.
Small MSPs are less likely to offer career planning and comprehensive benefits to employees, while large MSPs are slightly more likely to offer competitive pay, career planning and promotions, and team bonding events. Large MSPs that are high-revenue earners are more likely to offer nearly all of the retention initiatives in the survey—while smaller high-revenue earners are more likely to lean into team bonding events. This means smaller firms may want to focus on pay, career growth, and, perhaps most importantly, company culture to retain top talent.
Those with high client satisfaction and retention rates are more likely to offer generous time-off policies—suggesting well-rested staff may stick around longer and serve clients better.
To retain customer relationship managers, revisit pay and mentorship opportunities
Account managers and customer success manager roles are less likely to report that they’re trying to retain employees with competitive pay than other roles—meaning their department may feel underpaid or tight on budgets. Executives, who are more likely to say they offer competitive pay, should use compensation data or employee feedback to get a clear sense of market rates. Since this group is also less likely to say they receive technical training or formal mentorship in their roles, MSPs should ensure these team members are technically proficient and receiving guidance from more senior leaders—whether that’s inside or outside of the business.
MSPs plan on sales and marketing driving growth in 2025
2025 hiring demand
vCIO/vCISO roles
Trailing the list
Sales and marketing roles are the most in-demand new hires for MSPs 2025, followed closely by customer success managers and security specialists. Overall, the most common roles MSPs want to hire for are non-technical, customer-focused roles, implying the need for a holistic approach to acquiring new clients and improving the customer journey (not just technical delivery).
vCIO/vCISO roles trail the bottom of the list at 13%. This advisory role can be a strategic boon for client satisfaction since MSPs with higher CSAT scores are more likely to already have this role. If MSPs want to prioritize growing existing accounts through a more consultative approach, they should prioritize this role.
Small MSPs are less likely to be hiring for HR roles. Since we saw in the previous two sections that smaller businesses may struggle to offer the same perks and training opportunities as larger MSPs, investing in HR could help improve the employee experience and offer small MSPs an advantage in a competitive talent market.
Those in non-management technical roles are more likely to say they’re hiring help desk support or general technicians, while senior technical managers are more likely to prioritize security specialists and HR support. It may be important for technical delivery teams to align on the resources their whole team truly needs to excel—and not just the roles that will immediately benefit them the most.
13%
plan to hire a vCIO/vCISO in 2025—but those with high CSAT are more likely to have one.
Relationship managers see operations differently than other departments
Account managers and customer success managers are more likely to have a different view of their MSP’s operations compared to technical and executive survey respondents in the following areas:
More likely to list consulting services as an inefficient area of the business
Less likely to say they have proper project management and BI tools
Less likely to say their business has a long-term plan
MSPs should uncover where this lack of alignment comes from with customer-facing roles so it doesn’t impact the client experience. Revisiting what tools and data these teams have access to, how their goals are embedded into long-term planning, and ways to make client consulting practices stronger are good places to start.