What is the one business skill MSP leaders can teach their clients?

If you look at any well-run IT managed services provider, there are plenty of robust, systematized and documented processes in place. Service businesses are built on process management. Service desk, deployment, migration, and communication processes always require tweaking to be stay efficient, and efficiency is vital to a great MSP.

To enhance this process we use tools like PSA, RMM and dashboards full of metrics to quantify health and successful management. If you’re doing this you’re already in the top 1% of MSP leaders.

In all of this you must analyze processes, written process documents, education of your staff and colleagues, and staff metrics and management. Essentially you become a practitioner of business process management.

Most of your clients need that type of knowledge and experience to boost their companies as well. You can use these to kick off the business discussion and show some value in an area that is natural to you.

Now that we know you have the faculty let’s learn how to act as a IT consultant in the conversation. We have a sheet dedicated to “power questions” for this process in our MSP 2.0 Quickstarter Kit.

Try this: setup a meeting with one of your clients and focus on just one business area, using some of the power questions in the Quickstarter Kit. Choose something like sales, operations, logistics or procurement. Ask about their processes and procedures, where they feel they excel and where they struggle. I bet you can find a technology solution related to the latter. Don’t take my word for it, just try it. Have fun.

What makes a good vCIO?

Typically there is a certain type of personality that is best suited to the vCIO role.

• They have some consultative background.
• Their “down to earth” mentality suits working with small to medium business.
• They tend to be systematic, process-oriented thinkers.
• They understand how to put technology solutions into a business solutions context.

Chances are you possess many if not all of these traits. But who else on your team also fits the role? The idea here we’re looking at here is nurturing and developing ideal vCIO candidates to build a hyper-successful MSP in the modern marketplace - something one can't do alone. Let’s take a look at what that will require. 

STRUCTURE, MANAGE AND AUTOMATE YOUR ACCOUNT MANAGEMENT AND VCIO PROCESESS

You might guess the ERP guys, former consultants or business analysts and even some tech employees are perfect fits, but this isn’t necessarily so. The real skill lies in understanding what it means to be a virtual CIO in the modern MSP 2.0 ideology. Most IT managed services providers who offer a vCIO solution are still using it as an extension of the infrastructure support offer, only on a higher level. As long as the solution is grounded in supporting networks and servers instead of the business and people, it will remain an undistinguished commodity and replaceable by the next, cheaper competitor.

The MSP 2.0 vCIO does much more: everything from managing all the IT strategy and policies based on ongoing goals of IT competitiveness and profitability, to all technology, vendor and channel management. This virtual CIO meets with the heads all departments and purposefully learns their needs. This vCIO knows the “why” of the goals of the CEO and of the company. Of course servers and networks are a part of this, but far from all of it. This is a way to open up substantial business opportunities. More information is available in our MSP 2.0 Quickstarter Kit.

Are your ideas for candidates shifting? Who do you think might fit this position best now?

We are offering some short but exciting webinars that cover many of these topics

Do You Know Your Customers?

Knowing to whom you want to sell your services is as important as knowing what you’re going to sell, if not more. Think about it an airline...would WestJet or Southwest Airlines be as successful as they are if they were trying to sell their frill-free economy class seats to the wealthy first-class traveler? Starbucks and Apple only offer products priced well above the average for coffee or computers with people lining up to pay. In fact I’m enjoying my Venti-Americano as I write this. So what makes these companies so successful at whatever they do? They’ve defined their ideal customer so well that now we as consumers identify ourselves with their products.

The good news: your business can do this too.

When MSP business owners are asked to describe their ideal customer they give a wide range of answers, ranging from “the kind I can find” or “the kind that pays their bills on time” to some superlative customer that can be the saving-grace for their struggling business. These same business owners are also likely shelling out monthly to attract more. What’s usually and most troublingly overlooked are the following two simple ideas:

They have not defined:

1.  whom they WANT as customers (buyer personas)

AND

2.  whom they DON’T WANT as customers (negative buyer personas)

It can be easy to confuse the two, especially when cashflow is tight. But even worse, the customers we don’t want take up the most time and resources and will rarely help us grow a stable, profitable business beyond the short term.

So who is your ideal customer?  

• Who has purchasing authority? Probably the CEO/COO/CFO.
• What problems can your IT managed services provider solve for them? Hint: these problems need to be in their language...they probably don’t think about the technology of virtualization or the cloud.
• Where do they look for solutions? Friends? Google? Who or what is their authorized source?
• How to they make purchasing decisions? Are they looking for a special price, a good customer testimonial or something else
• What size is the company? How many seats? 10, 50 or 100+ positions?
• What is their level of technical complexity? Do they need any industry specific solutions?

We need to also consider that most businesses have a few different buyer personas. It’s wise to define as many as you need and key your inbound marketing efforts toward each of them specifically. We also need to define the ones we don’t want. Just don’t be afraid to rule out or “fire” a few prospective customers. Focus will serve your business well in the long term.

Where can your ideal customer be found?

Every business has problems and every problem has a solution, ultimately supported by some kind of technology you can offer. But don’t confuse the two...buyers care about the solution, not the technology. Don’t take my word for it...try having a conversation with someone in a language they don’t speak. You could both be thinking the same thing (the solution) but without translation (the technology) you’re not going to get very far.

Start speaking the same language in your inbound marketing and with your ideal customers and pretty soon they’ll be lined up to order Grande-Misto-Backups and Pumpkin-SaaS-Lattes!

Trusted Advisor or Technician, Which Pays More?

Most IT managed services providers we work with suffer a fundamental problem: the definition of who they are. The lack of a clearly defined definition of the business can be the biggest obstacle they face to success in the MSP 2.0 environment. The statement "I am a tech" needs to change to "I am a IT consultant." Unfortunately people often underrate themselves because they lack an MBA or they’re uncomfortable with so called “sales.” This limits them and their teams in engaging with more clients and prospects in a meaningful business way.

However, being a business consultant is just a role, a mode of operation, a mindset and the subject can be anything technical. Consulting is a behavior, a set of skills and tools that anybody can learn and implement. We are creating a series about being a consultant so you can harness the power and reframe how your clients see you.

In this first blog episode I will show you the circumstances in which it is better to act like a "consultant" rather than an "technician"

What is the consultative (trusted advisor) vs. tech (technician) mindset

First, many MSPs are under the false impression that they are having business conversations with their clients.

Be aware of this! For your clients, discussing the ROI of a VOIP is still just tech talk. Even having a chat about the financial aspects (OPEX, CAPEX) of the cloud is still tech talk. Discussing how a CRM could boost their top line is still tech talk.

The reason these are all tech talks is that in many cases the problem is created by the solution, not the other way around. This means we need to switch the conversation to talking about a potential business opportunity which the given tech-related solution could exploit. In most cases, the client did not say: "I have too much telecommunication expense", "I have too much CAPEX and want to transfer to OPEX" or "I have a sales problem” but with your expert consultation, they will be able to relate those to a technology solution you can offer. The client might be relating to these ideas in mind, but not in heart. Purchasing decisions are made using emotions backed up by logic, not the other way around.

Unfortunately the logical mind of a technician wants to speak of solutions in logical terms. That is the "I know what is best for you" mindset. And that is the telling mindset. This serves your business more than your clients, and ultimately makes your offering an expense, rather than an investment.

What if we address the business issues first and let them come to the conclusion that they have a problem? Spending time on questions and going deep into the subject not only means we understand them, but that they feel understood. Every solution we bring will be the result of a dedication to solve the problem stated. In this case, the tech projects become business projects.

This is the vCIO consultative mindset we need, and has nothing to do with having an MBA or wearing Armani suits. It is about sequence, tool set and mindset.
Let's have a look where we could use this mindset in our MSP practice:

All meetings with prospects

Every time we have a meeting with a prospect, we should wear the consultant hat. If we do, we immediately stand out in a big way. The main differentiation is that prospects usually expect to have a tech talk with a geek instead of a business conversation with an informed and experienced business consultant.

If we do not overshoot the role but just ask the proper questions and be genuinely curious about their business, we might hear something like: "Hey, I have been talking to other vendors and nobody was asking these questions..." This is the distinction we need to make..

Be open and try not to sell; you will make the sale eventually. If we trust ourselves and are courageous enough to go off the solution and focus on the issues and the problems that could form, then we are smart enough to convert those problems into tech solutions.

Firing up solutions without the business context is only noise for the client, and a false assumption for us that we have created interest.

Quarterly, yearly client meetings

I have reviewed many mature MSP's Quarterly Business Reviews. My conclusion is: reviewing MSP services like technology roadmaps during meetings is not the right way to engage clients. A consultative role lets us ask questions about their sales performance, obstacles of growth and the processes with which they are are struggling. We have to find out why the CEO is not able to sleep at night, and then help with that. In this case the meeting would be the review of their business instead of a review of ours.

Let's be proactive and challenge our clients. The best way is to start where we have experience. Every managed services provider is a process machine. Our MSP business model is all about processes, streamlining and automation. That is why every managed services provider leader has great experience with processes, human aspects, software automation, and so on. Let's start analyzing the client processes. You are going to find holes and great solutions that you can implement. These will come from your core business competencies.

Before and during projects

Technology Projects are a great way to leverage our consultative mindset. Before the project we should understand why the results of the project are required. What business benefits or deliverables will the project provide? Create a simple "Vision Statement" collecting the expectations of all stakeholders; this is a small investment of time but can be put to use during and after the project.

Use the "10 points exercise" from our MSP 2.0 Quickstarter Kit to have a better, common understanding about the goals, benefits, and expectations.

And believe me, not so many IT companies have asked the accountant or the operations manager what their expectations of the project are beforehand. So focusing on their problems and them as individuals will pay off in the long run and distinguish you now.

Any request, call we have from the client's C level

Of course, if a C-level executive calls you with a problem, there is something behind it. Most of us tech people immediately jump to conclusions, and search for solutions and so on. But our consultative mindset has to make the hard stop and ask "why?" Why do we even have a problem? Why do we need a solution at all? What are the goals, the circumstances, the context? In most cases, this is what the client really needs - to think through the problem with someone with an outside perspective who can help them to see different points of view. After a session like that you will get more phone calls about solving business problems than about fixing routers… (don’t worry, you’ll still get those calls too).

These are great ways to engage clients and open up discussions about problems that need to be solved. From this point forward nothing is going to be a tech-based project, initiative or conversation.
 

Conclusion

If you can just change this one thing about your communication it will pay off heavily. It differentiates you; it teaches your people how to communicate and it shows your client who you really are. This will help you to define your purposes and to communicate them accordingly. It will help you to stay always curious and focus on what matters to the client, instead of the perspective of the tech.

12 mistakes most MSPs make with their vCIO services

The virtual CIO phenomenon is not new, yet the promises of the role have not been realized across the industry. Some mature IT managed services providers who believe they have a functioning vCIO practice, on closer inspection, still show challenges with delivery, scalability and profitability.

While we could go in depth to identify the root of these problems, instead here we'll highlight the twelve most common mistakes MSPs make with their vCIO. At the end of this article there is a questionnaire where you can measure yourself against other IT companies.

vCIO Strategy, Transformation Planning:

Mistake #1. Packaing the MSP and vCIO contracts together

Selling the vCIO built into the MSP contract makes you Virtual CIO of the IT Infrastructure. In this there are two pitfalls.

First, the vCIO capacity of the contract does not scale with the size of the organization like the other MSP related services do. It scales up with the complexity, changes and developments of the clients. That means ball-parking a user based price for a virtual CIO is unlikely to be appropriate. This results in either the price being too much for the market (they don’t want to buy it), or the contract being more work than revenue supports (you don’t want to sell it).

Second, creating a solid offer on virtual CIO involves capacity time with a very expensive resource. That makes the MSP offering more expensive compared to the competition. For the client, the results and benefits of the "vCIO of the infrastructure" do not make much sense. Customers are apt to compare prices ‘apples-to-apples’ between competing managed services providers but rarely are the service offerings that comparable.

Virtual CIO can deliver a major competitive advantage. It needs a separate service offering with a distinct pricing strategy.

Mistake #2. Not creating the necessary budget to get results

Let's say we have a 50 seat "sweet spot" client set up with the needed virtual CIO core services like: yearly, quarterly, monthly and weekly cycles. This could eat up 70 - 170 hours easily with automation. (We refer to the virtual CIO here as a general one taking care of every IT-related business aspect: reporting, management systems, applications, budget, vendor management and so on.) If you use a base $150 hourly rate it could reach $2.000 service price per month or $40/user. Your MSP contract simply does not have the space for that.

Further you do not have the necessary processes or approach for that, and you can’t afford that much time, so you under-deliver on your promise of virtual CIO. This damages the concept and the possible future of the service.

Again, if you are not able to create the viable budget for the monthly recurring service fee and communicate the value, either you do not profit or don’t sell the service.

Mistake #3. Not using a framework to develop the system

The vast majority of the managed services providers we’ve been able to talk to do not use any framework for their virtual-CIO-related activities, so they don't have a system in place to successfully deliver them. Instead they operate as "consultants" or arm’s length managerial resources for infrastructure-like projects.

This means they are not able to implement a standardized IT management structure with proper plans, documents or databases that align services across the IT ecosystem. Nor are they able to streamline communication of the duties, tasks, deliverables and responsibilities of the virtual CIO correctly. This makes it hard to achieve the expectations of the client for the role.

Demand Generation

Mistake #4. Not attracting the right audience

Demand generation needs to target the right audience. The virtual CIO job is best suited for companies with 50-150 office workers. If the MSP wants to target a 20-30 or even a ten-seat client, there will likely come a painful realization of the lack of interest and of financial background. Those in higher tiers are left to figure out some system for managing IT. We can go there, but with coaching and support, as a complement the CIO or the IT manager.

Mistake #5. The wrong content

The partner of the virtual CIO is not an office manager, not the CFO or COO. The partner of the virtual CIO is the president/director/CEO - the top-level manager of the company. We know that placing this role that high is a challenge for the average technology-oriented service provider, like most MSPs, but it needs to be there.

Most CEOs are not interested in backups, new MS Office versions or the cloud in general. They spend their time on increasing cash flow, boosting sales, organizing their companies, servicing their clients, and developing their management team. The MSP’s marketing content has to reflect those perspectives and turn those opportunities into solutions supported by IT.

This content has to be consistent across the website, emails, blogs, calls-to-action, in lead-nurturing drip email campaigns, in LinkedIn and other social media communications and in marketing collaterals: ebooks, guides and whitepapers.

Mistake #6. No clearly defined buyer’s journey

The buyer's journey covers the process that a prospect follows, from the first access of content to becoming and remaining a client. While a lot of MSPs have a decent website with a blog most of these blogs lack a call to action - no next-steps for the prospective customer, such as a downloadable e-book on the relevant topic.

These websites talk about available services instead of highlighting vision, possibilities and opportunities. The sales meetings are wired not to serve the clients and create instant value, but to "qualify" the techs - a focus on our opportunities instead of theirs.

The lack of a well designed buyer's journey will fail to attract the right prospect (the CEOs) to the website and assure them they will find the kind of service that will focus on their opportunities. The content needs to attract, engage and interest the right prospect with the wide scope on the business - make them eager to initiate contact and get a demo or have a meeting with the MSP.  

Sales

Mistake #7. Not using consultative sales

Consultative sales is all about selling solutions. In solution selling our approach is not geared toward what to sell to the client. Instead we have a process to ask the thought-provoking questions that reveal overlooked opportunities and potential benefits. It is a process of discovery, of business opportunities where the MSP's solutions can help achieve their vision.

Virtual CIO is not a boxed product so it doesn’t have a standard price. Deep understanding of a customer's business is required before the solutions can be presented. Selling without context and understanding will put the virtual CIO in a very ineffective position, making it difficult to manage expectations.

This method is slower and takes more time, but necessary for engaging the client and crafting the offering within their business context. However exploiting business opportunities, and supporting them with technology solutions will mean more and higher value sales.

Mistake #8. Not selling the vision with stories

The virtual CIO's purpose is to make the client’s business more competitive in its marketplace, with the use of technology, to drive more revenue, cut costs and maximize the business continuity.

These general terms have to be in the context of the client and industry; we cannot really engage the client without selling the vision of competitiveness: being a better company, producing more revenue, and surpassing their competitors.

To sell the vision we have to craft compelling stories that grab the imagination of the CEOs.

Mistake #9. Not confronting reality with numbers

The reality of the situation - the hard data on the current state of business maturity, people, systems and numbers - sets the tension of the proposition. This tension helps make the buying decision.

The “score” needs to be readily attained and easy to understand in order to be compelling. That is why a business IT questionnaire that measures a company’s competitiveness with IT is a must. Without this, even if the vision is clearly defined, there are no quantifiable parameters to achieving it.

Imagine having a vision to run a marathon: a good start would be a full physical assessment. Make clear how hard you have to train, the time frame and the resources you’ll need to accomplish your goal.

Delivery

Mistake #10. Not using vCIO tools like automation or collaboration

Most MSPs are trying to use their existing PSA solutions like Connectwise or Autotask to manage their virtual CIO activities. It just doesn’t work, period. Again, the MSP 2.0 virtual CIO does not just focus on infrastructure. The virtual CIO has to manage people, processes and systems while communicating with the team, vendors and customers.

Most virtual CIOs do not have an integrated approach to managing all their activities in one place, or a system in which they can store all the IT management-related documents, memos, projects, databases, plans, budgets, and so on. Missing an integrated platform wastes a lot of valuable time for the virtual CIO.

Mistake #11. No clear differentiation between onging and project activities

Just as maintenance teams are separate from project teams because of different utilizations, focus, experience, etc.,  so should be the virtual CIO team.  

One virtual CIO needs to manage the core virtual CIO cycles, like yearly planning, quarterly activities, monthly follow-ups, reports, weekly meetings, and so on. An average virtual CIO could manage 10-18 clients, depending on the complexity of that focus.  

Another virtual CIO has to manage the individual projects separately. It needs a different personality, different skills, tools and different daily and weekly routines.

Mistake #12. IT-related service instead of business-related service

In a quarterly session, discussion should include questions about the client's cash flow, marketing initiatives, sales performance, internal projects, and competitor's moves first.

Then it can become a session with reports on the execution of the IT strategy, the quarterly plan, and the plans for the next quarter. It should not be focused on the technology roadmap or IT-related issues, problems, and challenges. It has to be focused on the business, processes, numbers, and business terms.

This can be difficult - there are so many cool IT projects an MSP can propose to a customer - however the conversation needs to remain about the business benefits and business accomplishments.

A successful CRM project is a great example. It highlights the improvements on sales collaboration, alignment, processes and results, instead of talking about the features of the technology solution.

Summary

Please check for these possible flaws in your practices. To improve on those, we strongly suggest signing up for the MSP 2.0 Quickstarter Tool. It has the tools to market and deliver the virtual CIO role right. If you would like to know more about the modern vCIO approach, let’s check this page.

Building up a 45 people rock solid MSP

Chris Day is a Maverick in the MSP world. He is running one of the most advanced and mature IT managed services providers with his partner Sharleen Oborowsky. I had a chance to have a chat with him and to dig deep on how they achieved that success in a short time.

Chris seemed to crack the code on growth: people and execution. He is an avid book reader, community builder, leader, and an authentic down to earth guy.

You can expect: great hints, tips, honesty, bold statements and no nonsense. If you are just a little serious about your managed services provider it is a must-watch video.

Develop and operate a scalable and structured account management and vcio operation in 30 days

My key takeaways:

• How to build a rock solid company culture
• How to price for double profit
• How to "interview" your clients before you "hire" them
• How to attract the best people in spite of labour shortage
• The principles of the execution and absolute accountability
• Processes and operational maturity for scalable growth

Visit Chris's Website 

Visit Chris's cool Initiative

6 Vital Elements of a Successful Business Building Process
REX FRANK AT SEA-LEVEL OPERATIONS
Watch this interview with our MSP operation excellence expert guide, Rex Frank, to learn how to make a profitable operation by familiarizing your MSP with the Annual Strategic Operations Plan’s best practices to leverage your RMM and PSA tools that will drive down costs, manage your engineers and guide behavior

Why inbound marketing works for MSPs

Let’s begin with what makes inbound marketing great in general. It draws your target audience to you, so you don’t have to go to them. You become a trusted authority on your subject matter in your market. The concept is simple but there are some key points I see people often overlook.

First and most important to remember when you’re building your inbound marketing campaign is that you need to be continually adding to the content your audience is looking for. Your MSP’s clients are out there right now trying to find ways to make their businesses more efficient for less money.

If you’re not providing them the information they’re looking for, your competition will. Even if they aren’t actively shopping around for your services they are seeing articles, blog posting, and comments on their social media feeds. There’s a good chance you’re reading this right now because you saw it in your LinkedIn news feed. This is how inbound works.. 

We at Managed Services Platform feel that you should be speaking to the C-level executives who have the authority to buy your services. They probably care about virtualization about as much as they care what brand of light bulbs are in their office (not much). They only care how their business can make more money and expend less doing it.

Let’s make sure we construct our content with that in mind. We’ve ditched the sales pitch, now we’re ditching the tech talk. Here’s a great example:  The MSP 2.0 Service Offering in the 7C IT Management Framework. See how that provides lots of great insight a CEO could be interested in? Did you notice the most important part at the end? The often overlooked Call To Action!

If consistent quality tailored content is the first thing to remember for inbound, having a great call to action is the last. Everything else fits in between. Always think “where is my reader going next?” This is known as the buyer’s journey. Let’s define our buyer, then provide them a road map to not only finding us, but to find out what’s distinct about us, and hence to buying our services.

Follow these steps to be sure your inbound campaign is working:

1. Define your ideal client. Often your business will have several. Usually they are a CEO, CFO, CIO or COO. They have the purchasing authority to buy your services. Write content that speaks to them.
2. Define how they will go from finding your to buying from you. A typical buyer journey goes something like this: they see and choose to read an interesting article you published on linkedIn, then follow your call to action and subscribe to your blog. A few blog posts down the road they follow another call to action and download a checklist. This generates an email from you offering a complimentary report on their IT competitiveness quotient. Now you get to show them how your MSP can give them a competitive advantage in their market. You just found a new customer.
3. Create and distribute great content with blogs, emails, social posts, infographics, quality landing pages and a responsive website.
4. Always have a call to action that moves the viewer along the journey as you defined it.

Our first book: MSP 2.0 - The Managed Service Revolution

I have to admit we haven't done a lot of blogging lately and there hasn't been a lot of new content, sorry. We do have an excuse: we have completed a book about the MSP 2.0 business model.

We got your awesome feedback on our content- thanks - including the observations that our ideas were all in little pieces, lacking real connection. We needed a more comprehensive and linear format to digest this new concept, and thought that the best way to do so was to write a book. Have a look at what we have to offer in this format, and how you can become a contributing part of the story.

The concept of this book is first to analyse the current situation and then to create the practical but holistic approach to make MSP 2.0 a reality. We wanted to deliver a business-minded explanation about the industry we are in. We have an MSP (Hauser Canada) that we plan to make successful over the next 5-10 years. Everyone sees the problems and the turmoil in the industry, but not the complete solution. We didn’t want to talk tactics, or how to sell the cloud, how to price, or package better. We wanted to show a very viable strategy toward the next evolution of the MSP model and what is needed to move quickly on that path.

We observed that while there is proven prosperity in the MSP program, on the ‘break and fix’ model, but we didn’t have a complete business strategy. It has been a long process to change the model, and most IT managed services providers still have a majority of these contracts. Our goal is to clear the slate and see what’s next:

Introduction:

The MSP 2.0 business model is a great blend of the MSP fixed-fee model combined with the much broader scope of IT Consultancy. This book illustrates that new model such that you can see how an MSP can build a scalable business around it.

Chapter 1: Business Focus or Technology focus:

Many IT companies says they are "Business Focused" but what does that really mean? What are the prerequisites to be able to make that claim? What is behind the value proposition?

Chapter 2: Why the MSP 1.0 model is broken?

Unfortunately, the initial Value Proposition of the IT managed services providers is broken. Nobody really cares about the infrastructure any more. It is a commodity, like electricity, and thus the subject is not part of the C level conversation. 

Chapter 3: Opportunity of the MSP 2.0 model

Meanwhile a substantial untapped potential is arising from the client side: the quest to be more competitive with the help of IT...to grow faster, service clients better, and communicate more efficiently. How do you address this huge opportunity?

Chapter 4: Why is it so difficult?

Do you remember how hard it was to switch from the ‘break and fix’ model to the MSP? There are two major obstacles along the way to implementing the MSP 2.0. This is going to be work too, but there are shortcuts.

Chapter 5: Requirements of the next generation program

If we want to tackle this in a systematic way, what do we need to address - the hurdles along the way we need to prepare for eliminate? What should be the scope for such a program, and what types of components should it have?

Chapter 6: The first Complete MSP 2.0 program

The complete program has many layers, like the framework, education, software, community, business building, and processes for each and every stakeholder. The client, who gets the value, the virtual CIO who delivers that value, and the leader of the MSP who is building the business.

Chapter 7: The Client Perspective

What does the client need to achieve competitive edge? Reduce the complexity of the IT, create transparency and a systematic approach to progress, ensure accountability, and effective collaboration.

Chapter 8: Virtual CIO Perspective

What the Virtual CIO needs to deliver is value in a scalable and efficient way: quick client discovery, implementation of core vCIO services and an IT management framework, effective management of IT Projects including collaboration with the clients.

Chapter 9: The Leader of the MSP perspective

What does the leader need to build a business? A Transition Blueprint Program, Self Assessment, Business Model Analysis, Creating the MSP 2.0 Value Proposition, Inbound Marketing Engine, Lead Generation engine, Predictable Sales, and Implementing the Virtual CIO services.

Chapter 10: The Roadmap for success

What is the typical roadmap for IT managed services providers of different maturities, size, and service offerings? What are the foundations and services needed to implement immediately and grow quickly?

STRUCTURE, MANAGE AND AUTOMATE YOUR ACCOUNT MANAGEMENT AND VCIO PROCESESS

How does the current definition of "IT" hurt your MSP business?

There was a State of IT Budget Report - a microscopic view of North America IT spending in 2014 from Spiceworks (RMM tool) during the weekend. It was all about analysing IT expenditures based on a 450 sample size "IT Pro" survey.It was a good report, well-thought out and executed, but there was something bothersome to me that wasn’t the fault of Spiceworks: the general industry definition of scope of IT, and because this is the industry definition, it’s usually our clients’ as well.

Differentiate yourself from your competition and

become sales ready in 30 days

I would like to highlight the flaw in an MSP defining their arena of activity based on the same definition. There is a debilitating pattern of industry players limiting the scope of the possibilities of their clients (MSPs) by limiting the scopes of the definitions of what they do.

OK. See how Spiceworks sees the "world of IT":

Hardware:

• Networking
• Server
• DesktopLaptop

• OS
• Productivity
• Virtualization
• Security
• Database

• Online backup/recovery
• Email hosting
• Web hosting
• Application hosting
• Productivity solutions
• Content filtering

• Connectivity/bandwith
• Storage/backup/archiving
• Hosting
• IT service providers
• Consulting

You can download the report from here. Again, it’s a good one.

I think this is a very good classification of the different items a general client is buying now. However, it doesn’t at all address some great opportunity aspects. This is just the traditional MSP 1.0 classification.

1. I don’t see any "new" budget sections that somebody could create based on services addressing client's problems, and suggests that they are not shopping around. The biggest missing point is IT management services. I see a category for IT consultancy, but IT management services are not consultancy. Vendor management, IT reporting, IT budget reconciliation, managing SaaS subscriptions, NIST cyber security compliance in general and so forth are not consulting services, but I don’t see the place for those.

Because these are quite new services, clients aren’t yet aware of these solutions - though they do know the problems right now. Service providers should now create budgets for these types of these types of MSP 2.0 services. This is also putting into practice what we learned from the book "Challenger Sale."

2. I also can’t see an "IT Budget" for ERP, CRM, B2B, B2C, custom software developments, online marketing, etc. These are not just "consultancy" or "software" categories. A lot of progressive IT managed services providers are making money on third-party evaluations, project managements, etc.

It is clear that the report reflects only the "IT Infrastructure" type software and has nothing to do with other "enterprise" or internal process management, reporting, and client services like software. This report would have been better titled "2014 State of IT Infrastructure Report." In my opinion, it is critical, not just semantic, that the definition of IT not be limited to infrastructure, software, and hardware.

We limit ourselves in the perception of our clients as well. When we say "IT" or "technology," their definition will be the infrastructure, and if we support this we’ll get more isolated into this slot. 

What does it mean to you?

If you are talking to your clients, they are likely to think of "IT" the way Spiceworks' termed it: infrastructure. But of course you are thinking on a broader perspective: Everything that is made of '0' or '1' is IT. If you do not address that, the new IT-based opportunities such as MSP 2.0, vCIO, reselling cloud-based business applications are not going to be a part of your portfolio.

You have two options:

1. Reframe your clients. Check this short video about reframing what IT can do for a client. This is a 10-minute presentation that shows how easily it can be done. We use this type of discussion with clients to make sure we define what IT really means, and we "redefine" IT using stories.

2. Use different terminology: In this case, you try to introduce new terminology, words, and phrases that help you create the difference in understanding. This is more difficult as you’ll regularly be trying to speak in jargon they won’t understand, like "holistic IT" or "business-focused IT".

Conclusion:

The IT industry has created a world that could limit you, where IT gets defined as IT Infrastructure. This is a limiting factor to you because you are in the IT industry. You need to differentiate yourself either by reframing your client's understanding of your trade or teaching them new terminology.

Monetizing Client Apps and SaaS Solutions the Smart Way

If you’re like me, you’re often evangelizing cool applications, services, and vendors to your clients. You have a cool feature on your Todo application, or you were able to integrate your CRM with LinkedIn, or you just collaborated with your team with an awesome project management tool. We spread the idea because we are advisors by nature. The question is how can we capitalize on this habit? How do we create service offerings around SaaS-based applications?

I hope you have read our monster blog article about the business model changes of the MSP. In this model there is an item called "Marketplace" in the partnership section, there are revenue streams called "Marketplace Commission" and "3rd Party project management," and there is an activity called "Resell Vendors, Applications."

The idea here is quite a common practice among IT managed services providers - finding a problem on the client side and helping them with an application. After deploying, manage the usage, subscription, and processes of the application. IT companies are mostly infrastructure providers, so they do these types of activities but in an ad-hoc way. What’s new here is the proactivity and a defined structure for these types of services.

PROBLEMS - VALUE PROPOSITION

Your clients have probably been using a lot of cloud-based applications for a while now. The average 20- to 50-seat company solves niche problems with niche applications. Some examples are sending bulk emails, using surveys on websites, organizing meetings and schedules, taking notes, sharing files, managing online marketing and sales activities, and automating processes.

The problems they have are the following:

• Finding out if there is an application for the specific problem (discovery services)
• Finding the right application for the problem (evaluation services)
• Buying the application or managing the procurement (negotiation services)
• Deploying the application to devices (deployment services)
• Creating the necessary processes (process management services)
• Integrating the application to other systems (integration services)
• Teaching the application to people (educational services)
• Supporting the application (support services)
• Managing the billing (vendor management services)

So, in a way they have the same problems they had in the good old days except they now with "technological" problems like installation, server setup, etc. We usually refer to this as an "IT management" problem. Usually clients simply swipe their cards to get access to applications in no time. They don’t know or understand that buying an application is only 10% of the entire process. It is easy to get onto this slippery slope. Users buy applications, then have problems, stop using them, and conclude the technology failed. The trick is education and storytelling.

My favorite story for this is Evernote's business-card-scanning feature. This is a nearly-free tool that can scan business cards, send LinkedIn invites on the spot, and then populate their CRM application with the contact data. I usually go through the process with clients/prospects and explain how it works and that it’s very affordable, because very few people use and leverage its true functionality. They just get it and use it, but the non-obvious features are going undiscovered. After this story, they understand what they are missing. This is a small reframing :-)

The value proposition here is to make your company more effective and vital by harnessing applications.

SERVICE DELIVERY

The delivery side is not rocket science, and very close to what traditional IT managed services providers are doing. However, to do it seriously, there are a couple things to think about:

Problem - Solution library:

Creating the problem library means you collect all the non-obvious problems you could solve with applications. Populating a CRM with Evernote’s business-cards-scanning feature is not an easy one to realize; it might be connected to a CRM through Zapier's integration feature.

You should create a knowledge base of the different business pains of CEOs and package your solutions for that. I bet you have a couple of geeks in the team who know every cool and popular service and app around.

There are also ready sales in managing people, meetings, delegating tasks, managing calendars, personal effectivity tools with the integration of mobile devices. Here, you could offer a bundled solution with to-do applications and shared project management tools, etc.

Integration method:

To make the process happen, you need to use a cloud-based integrator platform like Zapier to connect Evernote and the CRM application. It’s a pretty neat tool - you just drag and drop the two applications you want to connect, select your triggers and actions and you’re ready to go.

Partnerships:

Most of these applications have a partner model. That means if you sell them, you receive a commission. The best win-win way to use it is to share this commission with the client. In this case you remain independent, while still getting the client to choose your recommended provider - they enjoy the benefits of a discount and trust of your partners.

Pricing and packaging

There are many options here, but sooner or later you are going to shift to the managed model, which is very clear and easy to enroll.

Just think about it—they want to buy this service for the same reason they would want to buy a cloud based-application: as a service with a monthly flat fee, a package of their choice, and within their budget.

This is a flat fee based on application per user. You could use Light, Medium, and Pro classifications based on the difficulty of the application. For example, a ToDo app is classified as a Light app while an Online Marketing Tool is classified as a Pro app.

Then, you need to categorize your services, for example into Silver, Gold, and Platinum. The Silver covers basic services, but the Platinum includes integration with five other applications. A must-have is the hard edged definitions of the service, clearly stating what is included and what is extra. This is critical to smart delivery of the service.

At the end you are going to get a decent sized spreadsheet with all the applications and all the packages. The big idea is to aim at managing all their applications, so consider a quantity discount.

Of course, for bigger projects like a CRM or Accounting Package, you could always use the "3rd-party project management" method to monetize on the evaluation and implementation after the application of a flat fee. These are not just "apps"; these are serious business applications.

CONCLUSION

There are huge opportunities in the application world because even when there are no technical problems it doesn’t mean MSPs have nothing to do. There is plenty of work that can propel the success of our clients but they aren’t aware of it...the apps come from the cloud, so they must be ready to go with no more concern.

Teach your clients to build their own marketplace, deliver services, and create more recurring services!