How MSPs Can Meet Growing Client Demand for Compliance Services

Managed Service Providers (MSPs) are facing a significant shift in client expectations. What began as requests for technical support and infrastructure management has evolved into demands for comprehensive compliance solutions. Many MSPs find themselves unprepared for this transition, lacking the specialized knowledge and tools needed to effectively address regulatory requirements like HIPAA, SOC 2, CMMC, and others. However, with the right approach and tools, IT providers can successfully expand their service offerings to include compliance without overwhelming their teams or compromising quality.

The Compliance Challenge for MSPs

The growing demand for compliance services stems from several factors:

1. Increased regulatory scrutiny across industries
2. Rising cybersecurity threats and data breaches
3. Client needs to demonstrate security posture to their customers and partners
4. Insurance requirements demanding compliance certification

It’s not uncommon these days for an MSP to be caught off-guard when long-standing clients suddenly ask, “Can you help us become HIPAA compliant?” or “We need SOC 2 certification — can you manage that process?” These requests often arrive with urgency, leaving MSPs scrambling to develop expertise in complex regulatory frameworks.

Common MSP Pitfalls When Approaching Compliance

Without proper preparation, MSPs typically fall into several traps:

• Underestimating complexity: Compliance isn’t just a technical checklist—it involves policies, procedures, documentation, and ongoing monitoring.
• Lack of specialized knowledge: Each framework has nuanced requirements that require specific expertise.
• Resource constraints: Building compliance capabilities from scratch requires significant time and personnel investment.
• Project scope creep: What begins as a simple compliance request can quickly expand into a major undertaking.

The Strategic Opportunity

Despite these challenges, compliance services represent a significant revenue opportunity for managed IT providers. Clients are willing to pay premium rates for these specialized services, and compliance engagements typically lead to long-term relationships with recurring revenue. Additionally, offering compliance services positions MSPs as strategic advisors rather than just technical support providers.

How Blacksmith Empowers MSPs to Deliver Compliance Services

Specialized platforms like Blacksmith enable MSPs to quickly develop compliance capabilities without the steep learning curve. Here’s how such tools transform the compliance delivery process:

1. Framework-Specific Guidance

Blacksmith provides pre-built templates and workflows for major compliance frameworks, eliminating the need for MSPs to become overnight experts in HIPAA, SOC 2, CMMC, or other regulations. The platform guides users through framework-specific requirements, ensuring nothing is overlooked.

2. Document Management and Evidence Collection

Rather than manually tracking hundreds of controls across spreadsheets, Blacksmith streamlines the assessment process. The platform can:

• Collect and organize evidence
• Track progress toward compliance goals in real-time
• Generate reports for auditors or stakeholders
• Integrate with popular PSAs like ConnectWise Manage

3. White-Labeled Client Portal

MSPs can present a professional compliance experience to clients through Blacksmith’s white-labeled portal. This allows clients to:

• View their compliance progress
• Access required documentation
• Complete necessary tasks
• Maintain a central repository for all compliance-related information

From Struggling to Success

Consider an MSP facing repeated client requests for HIPAA compliance assistance. Initially, they attempt to manage the process manually using spreadsheets and checklist documents found online. The result is inconsistent delivery, missed requirements, and frustrated clients.

After implementing Blacksmith, this MSP can standardize their approach, streamline evidence collection, and provide clients with a clear roadmap to compliance. Within a few months, this scenario typically results in an MSP with greater compliance opportunities. They can become experts with common requests like HIPAA compliance processes, and can expand their offerings to include services like SOC 2 preparation. With the right implementation, MSPs have shown that compliance services can represent upwards of 15% of their total revenue, with higher profit margins than their traditional managed services.

Putting It All Together

The shift toward compliance services represents both a challenge and an opportunity for today’s MSPs. Rather than viewing compliance requests as a burden, forward-thinking MSPs recognize them as a chance to deepen client relationships and develop new revenue streams. With platforms like Blacksmith, MSPs can confidently step into the compliance space without overwhelming their teams or compromising on quality.

By leveraging purpose-built tools and following a strategic implementation approach, MSPs can transform from technical support providers into trusted compliance partners—creating more value for clients while strengthening their own business.

–