We just finished our first ever live 3 day Managed Service Productization boot-camp in Banff, Canada. With 25 participants we worked to crack the code in scaling up the managed services. Jam-packed with real work, the workshop groups created amazing content and generated ideas that have been sparkling. I wanted to capture some of the more intriguing ideas the MSPs came up with.
I’ll be elaborating on these topics in upcoming weeks, since I see each topic as worthy of more than a blog post, but here are the main ideas. These are my personal Ah-ha! moments.
Traditionally, the ad-hoc organic development of services and service catalogues creates major confusion for clients and employees. This has limited the scalability of MSPs. It doesn’t define your services nor categorize services into service categories and service bundles. The problem is the failure of proper categorization, service definition and articulated value propositions leaving too much room for interpretation of services. Luckily, we’ve experienced the power of service wireframing exercises which can lead to a well defined service catalogue.
Selling stand-alone vCIO services is easier by starting specific productized projects. The vCIO can be an intimidating and abstract concept for some clients: while the vCIO activities are solving their problems, they have no grasp of the how those abstract deliverables like IT Strategy, Quarterly Reviews, Monthly Reports, Budgets, Project Scoping or Stakeholder Interviews are working. It’s easier to visualize canned, productized project services solving one specific problem in demonstrating the vCIO work. In advance of developing ongoing vCIO services, therefore, it’s much easier to develop one-time vCIO projects in a productized way.
A systematic approach is needed to realign clients annually, as a response to many changes in tech and the environment. Either the client’s expectations change and they feel under- or over-served, or our profitability drains from additional work. Every year we need a version change on the service offering. Over the course of a year the service provider is developing, changing services as part of the development process. New services are available to all clients as "beta" functions through the year, and at the end of the year all beta services go to official services and clients make decisions whether they need the new services (they pay for) or stick with the old package. Everything beyond this gets relegated into the realm of too much communication and too many agreements in the air.
One company demonstrated a great use-case, to charge $4,500 per client prospect as an IT Strategy development process. It served to qualify and differentiate the prospects, as well as to release unqualified prospects from the funnel quickly. This strategy helps acquire higher maturity clients.
Another company's strategy was to push low maturity prospects through a very systematic and specific onboarding process to get their maturity to a manageable level. The final step of the onboarding was an IT strategy creation which defines the next steps once the understanding is set.
The strategies are perfect capturing the value for the different maturity prospects.
All the promises you make to a client, all the expectations you set, even unintentionally, are potential drains in your profitability. The problem with non-productized services is their vagueness. Unlike a coffee mug where you see the shape, size and quality these services are not tangible. So make services tangible! Fix the big hole first! Create a totally new service offering by making your current services so well-defined they won’t slow you down during your company’s development period.
A lot of MSPs set their Value Proposition as a mission statement. While it is inspiring, it doesn’t give specific direction. Breaking up the big Value Proposition into smaller value propositions helps distinguish service categories. Breaking down further defines the services. Everything stems from an MSP trying to make their clients more competitive with technology, and drilling down to specifics is what’s missing. Without it the message is too general, doesn’t engage the clients and doesn’t focus direction to the service provider.
Seeing the team slow down and merge away from the day to day operations to a higher level focus and headspace was amazing. We went through over 20 exercises over the 3 days. The impressive small group and larger group interactivity was able to dig out major issues and opportunities and create actionable items from vague ideas. The collaboration was most notable from Australia, US, UK, Germany and Canada. I think I underestimated level of wisdom, experience and knowledge in the group. This also made me aware of the need for major initiatives like implementing stand-alone vCIO services or productizing a service offering for that type of environment to make an effective change. Some things can’t be learned in days of emails, meetings and other distractions.