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Project management gaps cost MSPs profitability and efficiency

Only 30% of MSPs effectively use project management tools while a staggering 50% of executives say PM challenges are impacting profitability.

Moovila has released a new report highlighting the critical challenges faced by MSPs in managing complex projects and optimizing resources. The report, titled State of the Industry 2024: MSP Project Management Trends & Impacts, provides insights based on survey data collected from MSP leaders and executives, offering an in-depth view of current project management practices, pain points, and opportunities for improvement.

According to the report, 62% of MSPs recognize project management as a critical component of their operations. However, despite the growing adoption of project management tools, many organizations still struggle with key areas, such as project execution, risk management, and resource utilization. Only 30% of MSPs currently use the project management module within their professional services automation (PSA) platform as the primary method for managing projects, which leads to operational inefficiencies, misalignment, and lack of project visibility.

These gaps have real consequences: 50% of senior executives and CEOs surveyed indicated that current project management practices impair profitability, while inaccurate project timelines – often due to shifting schedules and unplanned tasks – were cited as the top-ranked factor negatively impacting the ability to manage work effectively.

“MSPs face immense pressure to deliver accurate, on-time project outcomes for their customers, all while adapting to a rapidly evolving technology landscape,” said Mike Psenka, CEO of Moovila. “This research highlights the increasing need for more advanced project management solutions to ensure MSPs meet client expectations, enhance service delivery, and reduce costs.”

Key findings from the report:

Operational inefficiencies: Over 65% of MSPs reported difficulties in managing project timelines and meeting client expectations, indicating a strong need for better project visibility and proactive risk management.

Resource allocation challenges: Nearly 70% of MSPs struggle with resource management, leading to project delays and increased operational costs.

Demand for automation: More than 80% of respondents expressed interest in adopting AI and automation technologies to improve project management and reduce manual tasks, signaling a growing trend towards digital transformation in the MSP space.

The report outlines actionable recommendations for MSPs to bridge these gaps, including adopting AI-powered project automation platforms, integrating real-time risk management tools, and prioritizing data-driven project management strategies.

Moovila found that MSPs who have prioritized advanced project management tools have experienced substantial improvements in several areas, including:

Improved revenue and margins

Enhanced resource utilization and risk management

Operational efficiency and overall business growth

Increased client trust and confidence 

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