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
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
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
Cloud:
- Online backup/recovery
- Email hosting
- Web hosting
- Application hosting
- Productivity solutions
- Content filtering
Managed Services:
- 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!
Practice-building or Business-building Discussion
James Vickery, a very progressive MSP CEO, had a couple of thought provoking questions. We’ve created a short talk to cover the issues he was curious about.
The main issues we are talking about:
- Scalability of the consulting type businesses
- The capacity of an average MSP 2.0 vCIO
- Training and retaining high profile virtual CIOs
- Managing, motivating and keeping virtual CIOs
- Building the practice for ourselves or building a business
- Transitioning to the MSP 2.0 business model
- Importance of checking the current and future business model
- Importance of very consciously developing services
Check the audio file for the 20 minute talk here:
Open the audio in a new window: MSP_QandA_with_James_Vickery
More about James Vickery and his managed services provider "I know IT" here:
If you too have questions like that, let me know and set up a short session like this!
START GROWING WITH MSP Business Building RELATED RESOURCES FOR FREE
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 managed services provider 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
Webinar Takeaways on Selling IT Security and Compliance
It was a really engaging talk with Steve Rutkovitz CEO of Choice CyberSecurity. He is a very successful MSP practitioner specializing in IT Security and Compliance.
We were talking about MSP challenges, strategies, IT consultative sales processes, IT security and compliance opportunities and partnerships, and I learned the following:
Generate client engagement
with five cyber security roadmaps in 30 days
- there are surprising similarities between the mainframe to PC era shift and the PC to Cloud era shift
- To become a successful MSP one of the most important traits is having best-in-class partners
- When you move up streams, you have to make sure you are able to manage management type people
- You have to develop a solid marketing / sales engine to teach your clients and prospects
- The Challenger sales is a great way to leverage the natural teacher inside IT managed services providers
- You can sell NIST Cyber Security and Compliance solutions without doing the delivery side
- The business model of selling IT security solutions through a partner
- The best foot-in-the-door tips and tricks to get front of CEOs
- The complete MSP sales process from “access to address” that maintains the IT security issues
- The natural advisory mindset of IT companies and the potential contained within
Thanks to Steve Rutkovitz for the wisdom and the honest, straightforward answers. I believe his thoughts could help IT managed services providers in any size and any maturity. You can bet this won’t be our last discussion with him.
Nist Cyber security Framework Quickstarter Pack
The MSP 2.0 service offering in the 7C IT Management Framework
The theories behind the business models are distinct from those behind the actual delivery. The MSP 2.0 model could be overwhelming as we’ve observed that changing the value proposition and solving the clients' IT management challenges means we must make numerous significant changes in our business approach.
We’ve developed the 7C IT Management Framework to solve this exact problem. It comprises a full suite of processes to enhance the IT management of clients in the 20-300 seat segment.
Upsell your clients with strategic QuaRTERLY BUSINESS REVIEWS and IT strategy meetings
Frameworks in general are good for:
- helping the service provider see all the client’s functions and service delivery areas
- helping the clients understand their situation and the context within a clearly defined system
- measuring the current state against the framework benchmark, define the goals for both parties, and attain team alignment
- creating a transition between the current state and the future state - the action plan
The goal is to move from an ad-hoc attack strategy to more systematic thinking.
This approach is more likely to give a comprehensive perspective so you can make an informed decision where to invest and where not to.
The 7C IT Management Framework was designed to solve the problems of small and medium sized companies. These companies do not usually have a full-time, fully trained CIO or VP of IT, and without a skilled person in that role, IT decisions are made by the wrong people, such as:
- The COO, CEO, or CFO, doing the job part-time, without the requisite experience of the full range of technologies and trends;
- The IT Administrator, doing the job but with no experience in managing projects or understanding business needs; or
- The outsourced, managed-service provider, with no understanding of the scope of the infrastructure and too technology-focused to have the most effective and productive strategy skills.
In many cases all employees work together on IT management. One will prepare a budget, another will plan the infrastructure, and a third will manage the projects. Often as IT managed services providers we are in the middle of this tornado, with no clear responsibilities, deliveries, or measurements. Everything is a bit foggy, but we try our best to do our best for the client.
The 7C IT Management Framework creates the following alignment:
- defining all the necessary elements that could be leveraged to get a competitive edge with technology
- measuring the current IT management maturity through a simple scoring system
- discovery of the business needs through a goal setting workshop
- creating an action plan to get to the target scores
distributing the work and the responsibility across the IT ecosystem
The benefit is a competitive edge for the clients through technology:
- more revenue to leveraging technology on the Value Proposition, Marketing, Sales, and Customer Loyalty parts of the company
- lower expenses in leveraging the technology on the Operations, Business Processes, People, and Systems parts of the company
- maximized business continuity, ensuring smooth operations and minimizing the impact of ‘disasters’ on the performance of the company
The 7C IT Management Framework
The 7C IT Management Framework covers 7 critical management areas of IT and asks these questions:- Continuous: What is the level of the IT security/NIST Cyber Security?
- Competent: How efficient and professional is the IT ecosystem?
- Charged: How proactive and responsible is the IT ecosystem
- Conscious: How strategy and business focused is the IT ecosystem?
- Controlled: How measurable, governable is the IT ecosystem
- Clear: How transparent or clear is the IT ecosystem?
- Cost effective: How well are costs controlled in the IT ecosystem?
These seven Cs are the key questions every CEO has to answer in order to have a competitive edge in IT. That also makes them the areas in which every MSP has to provide service, in order for the same goal.
As an MSP, you are providing value-added services to your client like backup management, disaster recovery planning, IT strategy building, and providing proactive services.
However, if you do not create a clear structure for clients you won’t inspire confidence. These are interrelated services, but if there are no defined boundaries, structures, or systems built around these individual services you will fail to maximize their potential.
7C, like any framework, is intuitively and expansively organized. The backup management and the disaster recovery are in the Continuous block; The IT strategy is on the Conscious block and the Proactive Services are in the Charge and the Competent blocks. If you can map every service you are doing and show your clients every management area in which there are deficiencies you’ll become aligned and effective.
Use 7C to map all your services and show the clients the big picture. It will also help discover the maturity level of your current service offering, and what services you should develop next.
7C is not a delivery framework. Its goal is not to tell you how to do better backups, or how to develop a better IT strategy. Its goal is to help clients understand what you are doing as an IT service provider, and for you to be able to get aligned on the service with prospects and clients.
One of the most important parts of 7C is the IT competitiveness quotient, which measures all of the 7C building blocks on the client side. It is an award-winning tool, which measures current maturity and generates an action plan based on the client's delivery areas.
Let's look at the defined service delivery areas based on different building blocks.
Upsell your clients with strategic QuaRTERLY BUSINESS REVIEWS and IT strategy meetings
1. Continuous: Services to Increase the level of NIST CYBER security
Backup management implementation
Keep the data safe and sound, without any chance of data loss as a result of any single point of human error, lack of responsibility, or technical failure.
- Backup policy, regulation implementation
- Backup process implementation
- Backup process responsibilities setting
- Data recovery testing & implementation
- Offsite backup implementation
- Data recovery plan implementation
- Offsite backup solution implementation
Disaster Recovery Plan implementation
Have a plan for when a disaster happens. It is a practical document that walks through all possible scenarios in case of an emergency event.
- Business Assessment
- IT Assessment
- Disaster Recovery Plan development
- Disaster Recovery Plan implementation
- Disaster Recovery Plan audits
IT security best practices implementation
Implement the best practices that can help to drive a smoother, safer, and more secure environment. This involves both systems and people.
- Corporate Information Security policy and regulation implementation
- Corporate Information Security guidelines, education & implementation
- User role and Lifecycle management implementation
- BYOD management implementation
- Password management implementation
- Risk management implementation
- Ethical hacking testing services
- Physical IT Security protection implementation
- IT Security, policies and procedures implementation
- IT Security governance implementation
Basic IT security management implementation
Implement some very basic tools to increase the protection of the IT environment, devices, storage and systems.
- Mobile Device Management implementation
- Encryption management implementation
- Access management implementation
- Onsite data access management implementation
- Online access management implementation
2. Competent:Services for a more Efficient and Professional IT Ecosystem
Managed Service Implementation
Create the most advanced and efficient IT service environment. The infrastructure management is a core functionality and has to be done in a very professional manner. Using the latest automation and management tools, centralized services, and monitoring key to success.
- RMM Service Implementation
- PSA Implementation for Ticketing, Project Management, and Asset Management
- Knowledge Base implementation
- NOC service Implementation
- Disaster Recovery Plan Implementation
- Asset Management Implementation
Proactive Services Implementation
Achieve high level proactivity. IT is here to maximize overall productivity, but often even if we have the latest software in place, the client team is not aware of the advances and can get frustrated when the interface moves buttons. There is no shortage of personal productivity tools around but they are losing their potential business impact when the team is not shown how to use them to create a personal operation system with to-dos, calendars, and emails.
- Proactive End User Training Program Implementation
- Proactive Internal Self Service Knowledge Base Implementation
- Proactive Personal Effectiveness Program Implementation
- Proactive Business Process - IT Alignment Practices Implementation
- Proactive System Integration Practice Implementation
Uptime Extension Services Implementation
Create and generate as high tenancy as possible for the given budget. You could influence the uptime of the overall systems with the professional services. Most of the job is proactive maintenance, standardized infrastructure, and redundancy. Discipline is the watchword here.
- Redundant Infrastructure Implementation
- Standardized Infrastructure Implementation
- Server Side Patch Management Implementation
- Desktop side Patch management implementation
- Life-cycle, Recycle Management Implementation
Virtual CIO Services Implementation
Manage the IT ecosystem at the most professional level possible. Most IT management jobs are done by one of the C-level executives with an internal admin assistant and perhaps a third party MSP. These three roles don’t cover the needed management capacity. A Virtual CIO and a third party IT consultant need to be in place for the following activities.
- vCIO Role implementation for IT Strategy Development, and Leadership
- vCIO Role Implementation for IT Strategy Execution, and Leadership
- vCIO Role Implementation for General IT Leadership
- vCIO Role Implementation for IT Infrastructure Management
- vCIO Role Implementation for IT Security and Risk Management
- vCIO Role Implementation for IT Consultancy, and Representation
3. Charge: Services to Increase the Level of IT Service Maturity
Managed Service Implementation
Implement Managed Services not just for the professionalism but to maintain responsibility as well. That means creating a service offering around the overall responsibility and accountability of IT using tools, policies, systems, and best practices to make sure nothing falls through the cracks and customer expectations are always met through assured alignment.
- Ticketing System Implementation
- Disaster Recovery Plan Implementation
- SLA and Ticketing System Implementation
- Dedicated Service Manager Implementation
- SLA for Overtime Implementation
- SLA for Special Device Implementation
Proactive Services Implementation
Create all the necessary proactive services to prevent problems or fix them as soon as possible. Monitor, optimize, and remediate if required. This is not just related to the infrastructure but for the business processes as well.
- Proactive Maintenance Practice Implementation
- Proactive End User Training Program Implementation
- Proactive Optimization Practice Implementation
- Proactive Onsite Support and User Feedback Implementation
- Quarterly Business Analysis and Reviews Implementation
Responsibility Matrix Implementation
Manage the responsibility and accountability of many internal, external , and third party resources and vendors. On average a "Virtual IT Department" consists of at least 15 parties (ISP, Software Companies, Consultants, Hardware Vendors, and Service Providers etc.). Who is the boss? Who is responsible for what? The issue here for the CEO is that if no one is responsible then ultimately he/her is responsible. These workshops are a great tool to align and organize the team.
- Responsibility Matrix - Including the CIO Role Implementation
- Responsibility Matrix - Main Categories Implementation
- Responsibility Matrix - Education Implementation
- Responsibility Matrix - Main Categories Implementation with Ticketing System Aligned
- Responsibility matrix - Attached to the Contracts
4. Conscious: Services to increase the level of strategic IT focus
IT Strategy Planning Retreat
Create a rock solid IT strategy in a very short timeframe. Executives’ time can’t be wasted sitting and talking for days. What is the best practice for spending 4-16 hours of work to create a very solid IT concept, roadmap, or strategy? The answer includes processes, best practices, efficient data collecting, and decision making techniques.
- IT Strategy, External Review, SWOT Session
- IT Strategy, Internal Review, SWOT Session
- IT Strategy, IT Ecosystem, Infrastructure Audit Session
- IT Strategy, Business Modelling Session
- IT Strategy, Virtual IT Department Evaluation Session
- IT Strategy, Business Functions Mapping Session
- IT Strategy, Business Processes Mapping Session
- IT Strategy, IT Functions Planning Session
- IT Strategy, Strategic Initiatives Planning Session
- IT Strategy, Development Roadmap Session
IT Operational Planning
Create detailed guidance for the execution of the strategy. This should be a year long plan with all the deliverables, initiatives, projects, priorities, and responsibilities necessary for flawless execution. Most small businesses do not have these plans in place. They often see it as too much work to create them, so the cost/benefit ratio precludes it. Again the keys are the processes, templates, and best practices to do the work in the very small amount of time.
- IT Operational Plan, Budgeting Session
- IT Operational Plan, Capacity Planning Session
- IT Operational Plan, Priority Setting Session
- IT Operational Plan, Resource Redistribution Session
- IT Operational Plan Finalizing Session
IT Strategy Execution Management Implementation
Execute the plans adeptly. The agile methodology helps to create closed loop systematic rhythms around the execution. The key is to foster alignment on the deliverables and set expectations on time and budget. The most often overlooked factor is the personal time capacity planning. You have to set aside time for managing and doing all the project related work.
- Quarterly IT Execution Plan Implementation
- Monthly IT Execution Cycle Implementation
- Weekly IT Execution Cycle Implementation
- Project Execution System Implementation
- Quarterly Performance Management Implementation
Upsell your clients with strategic QuaRTERLY BUSINESS REVIEWS and IT strategy meetings
5. Controlled: Services to ensure a robust IT Ecosystem with Agile IT Governance
IT Performance Management Best Practices Implementation
The goal here is to maximize reliability through implemented best practices. Quarterly and monthly target setting measures performance and creating action plans drives costs down and increases efficiency.
- IT Performance Management Framework Implementation
- IT Infrastructure Planning and Monitoring
- IT Management Planning and Monitoring
- IT Strategy Planning and Monitoring
- IT Vendor Planning and Monitoring
- IT User Development Best Practices Implementation
Strategy Execution Best Practices Implementation
While it’s great to think big-picture during the IT strategy session and develop fancy projects we need to reach our goals, we have to use specific IT related project and program management best practices to make sure that we are not just dreaming, but executing flawlessly.
- Key IT Initiatives Management Best Practices Implementation
- Key Project Budget, Risk Management Best Practices Implementation
- Key Project Visualization, Planning Best Practices Implementation
- Key Project Change Management, Communication Best Practices Implementation
- Key Project close Best Practices Implementation
IT Audits Implementation
Ensure everything is safe and sound and works as we think it should be working. The various types of audits not only let us sleep better, but also keep up awareness of specific areas. To create such internal compliance requires a higher operational maturity.
- Independent Auditor Service Implementation
- IT Audit Process Design Based on Best Practices
- Data Security Audit, Disaster Recovery Audit, Data Backup Audit implementation
- Server Management Audit, Network Audit, Server Room Audit, IT Services Audit Implementation
- IT Management Audit Implementation
IT Organization Best Practices Implementation
Organize the IT Ecosystem. This is a virtual department with 20 to 30 different vendors. Who is the boss? Who is working together? Who needs what information? How do we assist communication? It is worth the effort to establish order to get maximum value from our vendors and internal resources.
- IT Operation Process Best Practices, IT Operation Policies Best Practices Implementation
- IT Operation Manual Best Practices Implementation (Knowledge Base, Administrator's Guide, Responsibility Areas)
- Collaboration Platform Implementation, Ticketing, Project, Yearly, Quarterly Planning, Alignment
- IT Organizational Chart Design
- Competence Management and Personal Growth Plans
6: Clear: Services to maintain transparency of the IT ecosystem
IT Reporting Practice implementation
Develop the necessary reports to be able to measure the performance of all departments and groups. What we can't measure, we can’t manage. This is not an exercise in flooding the C level with reports. It means delivering critical weekly, monthly, quarterly, and yearly metrics of business performance.
- Reporting Framework Implementation
- IT Infrastructure Reporting Implementation
- IT Management Reporting Implementation
- IT Strategy Reporting Implementation
- IT Vendor Reporting Implementation
- IT User Reporting Implementation
Establish clear aligned definition of who is doing what. Going through the 200+ responsibility areas, from checking on the backup to aligning the technology with the business needs is going to raise a lots of questions. Who should do what to make sure nothing is ignored or forgotten. Again the takeaway for the CEO is that if no one is responsible for an element of the matrix, ultimately the CEO is. It is better to know who does what before you need them to.
- Responsibility Matrix Audit, Interviews and Workshop
- Responsibility Matrix Management Implementation
- Team Dependency and Risk Analysis
Internal SLA Implementation
The goal is to create the Service Level Agreement (SLA) internally. That means identifying all the necessary services the company need, make decisions on the needed quality, speed, cost, and create alignment on this. The internal audits could make sure the agreement is not just a paper on the shelf.
- Internal SLA Creation based on Template
- Internal SLA Enforcement
Efficient IT Management Tools Implementation
Use the most efficient tools as possible in IT management. If IT wants to make the company more competitive, it first needs to be competitive itself. Using the latest and best efficiency tools is key to drive costs down.
- Execution Management Tool Implementation
- IT Maturity Management Measurement Tool Implementation
- IT Document Management Tool Implementation
- Password Management Tool Implementation
- Budget Management Tool Implementation
Vendor Management Implementation
Make clear that the client is in the driver's seat and not the vendor. Vendor management means yearly negotiations on prices and services, switches if needed, mediation on tough problems, and enforcement of the service level agreement. Make sure they are creating the value we agreed on.
- ERP Vendor Management Implementation
- Telco Vendor Management Implementation
- Cloud Vendor Management Implementation
- General Vendor Management Implementation
- Printer Management Implementation
7. Cost Effective: Services to minimize the costs of the IT ecosystem
IT Budget Management Services Implementation
Create and manage the most cost-effective IT budget. What is included in the budget needs to be strictly defined because everyone has to be on the same page when we’re talking about costs, expenses, budgets, targets, etc. Setting a budget is incomplete without proper governance, reconciliation, reporting, and solid decision making.
- IT Budget Planning
- IT Budget Controls Implementation
- IT Budget Reports Implementation
Operation Efficiency Services Implementation
Analyse all the IT related processes in the organization. Are there any new tools we could use? Is education required to use the current systems? Is there any integration that could be done to make their processes leaner? A service offering encompassing these topic is a great tangible source of continuous improvement and total quality management.
- Continuous Process Improvement Implementation
7C IT Management Framework and a vCIO Role Implementation
Manage every aspect of IT in a lean and straightforward framework. We create and implement the 7C Framework based on the 7C methodology. We must understand that the vCIO is a high level IT Executive and can be a third party. The framework he/she implements, manages, and further develops is based on;
- 7C Methodology Implementation
- 7C Certified vCIO Implementation
- 7C vCIO Toolkit Software Package Implementation
- 7C vCIO Community, Continuous Education Implementation
IT Procurement Management Implementation
Manage all IT expenditures of a company and keep them as low as possible. Set up rules around purchasing, and create standards to achieve a homogeneous environment including managing all software subscriptions - key to keeping the costs down.
- Purchase Policy Implementation
- Standardized Device Policy Implementation
- Software License, Subscription Service Implementation
- Purchase Process Policy Implementation
Conclusion
The services discussed here are not new. What is new is the perspective. We can see the goal, see what the different services are about, and how to frame the services so that the client understands their value. It is an alignment tool to help clients understand their situation and to help them make informed choices.
You are able to help your clients without having capacity, knowledge, and experience in every service. You are able to be the one and only trusted advisor and vCIO, and outsource the rest of the work, with partners who excel at creating a budget, strategy, or security. That is your value in using the framework: being the big-perspective guide on IT, and ensuring the smooth, natural delivery of a professional trusted advisor.
Cracking the code of the future of MSPs
There’s been a lot of talk lately about a fundamental change in the MSP industry, and the subject may seem overwhelmingly complex. The change taking place is quite evident, but what’s inside the tornado? What is the force behind this change happening?
Understanding the underlying impetus will enable businesses to make more educated decisions where to drive their companies. Let’s demystify this change and put it in a very easy to digest format, as the core of the change is actually simple.
It is not our shortest Blog but I promise worth the read. You will see the change taking place and how it could help you drive enormous growth in the next couple years. So fasten your seatbelts!
We are going to use one of my favorite thinking tools to analyze and understand the situation: The Business Model Generation framework. We use this method nearly every day, to understand our customers and their business, brainstorm new business ideas, etc. We like it because it is very simple, very straightforward, and separates complex systems into simple components.
We’ll start by showing you the current typical MSP business model and why this model was the right answer for the market needs in the past. Then we’ll look at how the core of market needs have changed and the resulting changes that have been made to the business model.
Market need:
Think way back to when computers first came into the commercial environment and dramatically changed how we do business. These were large and complex systems and unwieldy from a technological perspective. For so many tasks somebody technical was needed to finish the process - to convert a picture, scan a document, set up a network, or just save a file. These tasks needed to be more user friendly and the users to become adept in these environments. The problem to overcome in was technological complexity.
So the IT support companies came to the scene and solved the problem of technological complexity. They have been evolving since, and the most mature format of this service is the Managed Service Provider model.
Let's analyze the classic MSP model, particularly to see how all the aspects of the current model are working together. We will then see how a small change on one part of the business results in adjustments in every field of the model.
Value Proposition:
The core value proposition of an MSP is reducing the complexity of technology. This is the ultimate goal and the value they are delivering to their customers. It can be stated in various ways: "run your business smoothly", "peace of mind”, "security and compliance", or "strategic IT design and decision making". Every company has its own style but all promise to reduce the complexity of the technology in their client's environment.
In order to fulfill this promise, IT managed services providers first create a so-called "Outsourced IT Team" service, which includes all the human resources as an independent unit. Clients do not have the necessary skills or resources to manage these teams.
Second, they provide an "IT infrastructure": design it, build it, manage it, and support it. The infrastructure includes all the switches, servers, desktops, and gadgets and all the software elements on them.
Very simply, this is the core value proposition: reduce the complexity of the technology with outsourced IT staff and IT infrastructure.
Customer Segments:
Regarding size of client company staff the sweet-spot for the traditional small IT companies can range from 20-150. Below this it’s hard to standardize the service and the budget is too low, and beyond it those businesses usually have their own IT department.
Channels:
The typical sales method for MSPs is word of mouth referrals. As with doctors and lawyers the performance of the provider is judged on criteria unmeasurable by the customer and in industry jargon that no outsider understands. This makes trust and reputation essential factors. An MSP could lose a client by dropping the ball on a deadline, or by neglect, but without these catastrophes it has been a comfortable space to be.
Most IT managed services providers do have some form of website; not so many have a blog or other educational content. However, these are very unlikely to create a "marketing engine", or to excel at collecting and managing leads. Also, most are made by the owners or directors, whose only frameworking tool is a "network assessment tool" which helps them discover the IT infrastructure of the client and give recommendations based on that.
Customer Relationships:
The Service Desk drives the main relationship between the MSP and its clients. While the most important elements in its service quality are the response time, the personalized services, and dedicated resources, many IT companies have outsourced this function and had a hard time afterwards.
In our terminology, account management is still part of the Service Desk, because it’s the management part of the service. Still, some MSPs claim to be vCIOs, though it’s likely that this service was made a part of the MSP package just to improve sales.
Moreover, Virtual CIOs have tended to concentrate on IT infrastructure planning and design, or on doing quarterly "business reviews" and neglecting other parts of the business. They operate without a process-driven separate service offering. The clear loss from this is that very few MSPs will get a call if from a client with a business problem. The client will call once they’ve solved the business problem and they need a new server. Instead of being a business advisory role in most cases it’s one of technology infrastructure advisory.
Key Activities:
While there are several models, there are only three main functions within service delivery: software, hardware, and service areas.
Among existing service areas, there are projects, system developments, NOC, and Service Desk. Some companies separate the project work and maintenance; others some separate NOC from Service Desk.
The HW/SW sales have typically driven the projects, and every 2-3 years major developments were taking place. These developments drove an enormous amount of fixed base revenues for the service providers.
Key Resources:
Key resources are those that if taken away bring the company to a stop. For MSPs, the key resources are the human capital, client contracts, relationships, and experience and knowledge base of service delivery.
Key Partnerships:
Other more valuable partnerships were based on service delivery software. PSA and RMM solutions directed the quality and the efficiency of service delivery. These companies invested heavily to educate and help IT companies.
Cost Structure:
Revenue Streams:
In terms of revenue streams the most prominent have been the resource-based ongoing revenues, which could be Time and Material, Block of Hours, Retainer, or Recurring service models. Next are the project-based revenues, which usually include fixed costs. On top of these there is a shrinking margin of hardware and software sales.
So, this is the traditional MSP 1.0 model. I have spoken with around 100 MSPs in the last few years. I have read most resources and we have built two MSP-related companies.
Business model design demands the ability to see the patterns and the changes around these whole sets of building blocks. We have to see the precise nature of changes as well as other parts of the business model have to change to adapt.
So let's see what has changed in the last few years related to the classical MSP 1.0 model:
1. Using technology is gets less complex
The user experience of mobile devices has driven an enormous change in reducing the complexity of technology. Just five years ago the method of sharing pictures included taking a photo, downloading it, converting it to Jpeg, and then copying it to a USB drive. Now my parents are doing that all with their mobile devices. Just take the picture, edit if you want and easily share it through Instagram or Facebook.The cloud democratized technology. Everybody can get the latest CRM platform with the swipe of a credit card. There are no implementation plans, consultants, or hefty projects needed. You can just start today and emerge.
Further the current generation of users is now much more comfortable with technology. The complexity of the technology became not just absolutely simple (like using iPhone), but also relatively simple to learn and adopt. Generation X and Y are more willing than ever to search online to solve problems themselves without calling a help desk.
2. Management of technology gets more complex
The market has fragmented. There’s both a multitude of applications around the web solving problems, and numerous corporate and private problems looking for solutions. These realities are often prevented from meeting, however. Both client companies and vendors are specialized in niches, and the sheer numbers make getting together difficult to manage.
The impact of technology on businesses is greater than ever before. Everything is wired and a single point of failure could run a company out of business. Consider CodeSpace: a small company hosting websites, where a hacker was able to erase all their data, including backups. CodeSpace was forced to close their doors. Having a clear vision of all aspects of security, applications, access, vendors, costs etc. is still a management challenge.
The IT budget has also increased because many things that were outside of the IT budget are now included in it. Managing this budget is a complex issue as IT is no longer a technology challenge but a management one.
IT is clearly a strategic asset. It is not the infrastructure but the applications, the adaptability, and the culture are what the company is using,. It can be a differentiating factor among the competition based on costs and customer experience.
So the two major changes that have taken place are, first, the complexity of technology has been declining and second, the management complexity of technology has been increasing. These trends are interdependent and supporting each other.
The problem is that these two factors work against the current MSP model in a big way.
The first is undermining the basic value proposition of an MSP by removing the technological complexity. With demand decreasing, the services that the MSP delivers are devalued. It’s the first thing MSPs are witnessing: fewer client calls and some IT decisions are being made without them.
This is a typical "Red Ocean" scenario, meaning the competition is increasing and the market is commoditizing. This is not a good place to conduct business.
The second trend is creating a new demand, but this demand has not manifested as service requirements yet. There isn’t yet a mainstream service around the problem, so clients aren’t shopping around. While there are still opportunities to solve problems for companies but they aren’t able to translate the myriad choices into a service they want to buy.
Hence this is a typical “Blue Ocean” opportunity. There are few to no competitors. The market is wide open for influence and education and unique value propositions can be made, a new service can be developed, and at a higher value.
However, as you will see, you have to pay a price as well. A switch from the current model is no mean feat and there are many obstacles down the road. This is a higher risk, higher margin model.
If we can properly read all these changes, we then have to design a new business model around them to make a viable business.
So let's have a look at the so-called MSP 2.0 model. In this chart everything green is new, the orange is of reduced value and everything red is going to be obsolete based on the new model.
The New Value Proposition
Our new value proposition is geared to reducing the complexity of the management of technology. That means our goal is to manage all technology-based business areas - to make the client more competitive through the use of technology. We achieve this in three ways:
- Improved efficiency with technology: find how we can drive down client costs through automation, standardization; better processes, information, communication, and collaboration.
- Competitive edge with technology: fuel client revenue streams with technology, better customer service, faster delivery, and better information flows.
- Maximized business continuity: as the impact of breach is much higher than it used to be, so the IT security, information security, and vulnerability are going to become more important aspects in the business perspective.
“Management" is all about making decisions, creating strategies, planning accordingly, and executing projects. We have to create services around these three building blocks following the principle of the value proposition: We are going to comprehensively handle all the aspects of these management issues on behalf of the client.
This is not entirely new; every MSP has been doing some of this in one area or another. However, this puts it in perspective of the two major shifts. These must be fully fledged service offerings, and not just something we do for our clients as a side offering.
The New Customer Segments:
We have to seek out companies with more complex operation. This kind of service has not been developed for larger groups so we could have 150 to 500-member organizations as targets as well. We may not drive their whole IT strategy, but we could be a part of the Sales, Operation, or HR-related IT strategies. These are also small companies within larger ones with a particular focus. Harvesting those projects could be very profitable.
Also, we have to understand that being thought leaders, and not interested only in infrastructure, could open a lot of doors to larger organizations. This solves the problem of hearing “we already have an IT department” from larger potential customers.
The New Sales Channel:
If we want to sell this new value proposition, we are going to face new challenges. Nobody is buying it now, period. There is no such service around, and the market is still uneducated on these terms.
In order to be able to sell, we have to educate the clients, and we have to "reframe" them. For education, we need to create content and distribute it. A blog is a better start than books and case studies and is a common and effective avenue for content and inbound marketing.
Our value proposition is to increase something that is very intangible. The competitiveness with technology is a pretty fuzzy term. However, the actions and ongoing activities driving competitiveness can be measured. This is "ITCq" (IT Competitiveness quotient); a measuring of all the things related to well-managed technology. Using this tool makes it very easy to start a conversation with prospective clients.
Starting a conversation is one thing but closing deals is another. For that, the different workshops are a great option. We provide services to show our expertise, and then we can move on to important quick-win projects. Those projects are our foot in the door; and after successfully closing those projects, we can open up many other services. This is a seeding rather than a hunting sales approach, with the understanding that clients need time to adopt.
The new client relationships:
It is now apparent that our new core service offering is totally centered around a true virtual CIO role. The True vCIO deals with all aspects of the technology, not just infrastructure.
This role is going to fulfill all the needed high-level management roles, communications, and interactions. It creates all the IT strategies, roadmaps, budgets, and operational plans and manages all the projects needed to execute the strategy. This role is going to drive the perception of our services. The switching cost is considerable - we can still drop the ball on the delivery side if our vCIO isn’t dynamic - but if we stay active and communicate well, we have nothing to fear.
This is a business analyst or IT consultant role. If you don’t yet have one, hire someone with this skill. Set processes and job descriptions in place so you can train and set expectations for his or her performance.
The New Key Activities:
Because the vCIO services are now standing on their own, not attached to an MSP contract, we need to incorporate an "IT management framework" that comprises all the processes and deliverables that IT management now does and the vCIO is working on. The IT management framework is like a small ITIL, or any other framework, but more practical and automated.
We are using our own 7C IT management framework for that reason. The ITCq is the tool which measures all of the activities we have in the 7C framework. Implementing that sort of framework produces a decent revenue and creates a very visible form of ongoing services to maintain and further develop the client’s IT competitiveness. It contains yearly strategy, planning, budgeting, and auditing, based on templates and best practices. Everything goes into the software that clients can access, and which we can use to make what we bring more tangible and visible to the clients.
Because we are creating IT strategies, someone has to manage them. This includes overseeing all the IT projects the client is doing, but it could also be the specific third-party project management of a larger solution.
We will continue operating our NOC, Helpdesk, and traditional IT infrastructure services as long as it makes sense.
New Key Resources:
The key resources of the traditional model have not changed and only one is added. The IT management frameworks are now a huge value. The clients have locked in and we are driving the heart of their business. Looking at your company valuation, this will be the highest component in two to five years.
New Key Partnerships:
The goal is to get some commission based on the sales of those services. As a vCIO, you are making decisions on behalf of the client, which means you are going to face problems and look for solutions. Your marketplace is the set of solutions looking for problems. You are the interface between the two worlds, coupling problems with services.
If you think five years into the future, 75% of an average client's budget will come from cloud-based solutions. It’s not difficult to calculate how much money an MSP could make based only on recurring commissions. A general cloud-based provider (Salesforce, Google, or Microsoft) could offer 8-10% of the sales recurring. A smaller niche provider could leave 20-30% of the sales on your side. Revenue could be coming in every month with just these partnerships.
This is a cloud broker model. However, we are not brokering just traditional cloud service providers, but every software company, because everybody will be switching to a cloud-based delivery model in the near future.
New Cost Structure:
Nothing has changed. We are probably paying more to create marketing content, education, and to train ourselves and our staff.
New Revenue Streams:
Plenty of new possibilities here.Revenue streams: the vCIO and IT management framework implementation projects have significant power. These projects create all the prerequisites for IT management including procedures, processes, strategies, plans, contracts, and agreements with vendors that have to be created to manage the environment.
The sales process has to be adopted in the early stage of the market. Delivery must incorporate a new role. Processes and procedures must drive the new role, instead of doing it ad-hoc, to gain recurring predictable and scalable service revenues.
A new way of connecting problems to solutions comes from the nature of the vCIO role. Creating such a marketplace is a natural move to make the business more predictable and scalable .
Conclusion:
These are two big trends of technology - it’s becoming easier to use while management of all the choices is more complex and creating a tornado. If you think you are going to be able to stay only a 1.0 MSP, cloud and reduced complexity is going to put you out of business. If you are not getting into IT management, you are missing the boat.
The new model will enter into the mainstream in the next few years. As it does the incumbents will have tremendous advantage over new entrants. The learning curves, the thought leadership, and the processes are hard to copy or implement quickly. In my opinion, someone who invests now and spends the next few years developing this model would be reaping the profits in the following 5 to 10 years.
During the next session, we are going to talk about the specific MSP 2.0 related Projects, Ongoing Services, and the natural adoption of the model in 12-24 months, so stay tuned. Subscribe to the Blog alert on the top right to make sure you get the new articles.
MSP East vs West All Star Game
We have been producing a fair amount of research on the topic of MSPs offering vCIO services.
Because one of my colleagues is a great NBA fan, we’re now able to present the “MSP East vs. West all star” comparison.
Now we’re very sceptical guys, but since this is based on work with 591 IT managed services providers, we inclined to believe that this is a reasonable view of the real situation of the US Virtual CIO market.
But we like to be sure, and you could help us!
Go to our virtual poll and vote for your team if your MSP offers vCIO services! Choose the NBA team based on your company operation. If you have multiple locations, you can vote with each of them.
We close the vote on the Independence Day, and then we can have a heated conversation why East has beaten West so much. Or the other way around? :-)
Final Report of Survey Results
- New York Knicks 14.29%
- Golden State Warriors 14.29%
- Chicago Bulls 9.52%
- Dallas Mavericks 9.52%
- Los Angeles Lakers 9.52%
- Cleveland Cavaliers 4.76%
- Boston Celtics 4.76%
- Atlanta Hawks 4.76%
- San Antonio Spurs 4.76%
- Houston Rockets 4.76%
- Washington Wizards 4.76%
- Philadelphia 76ers 4.76%
- Oklahoma City Thunder 4.76%
- Sacramento Kings 4.76%
- Defining vCIOs from around the world: Part 1 - Canada
- Defining vCIOs from around the world: Part 2- New Zealand
- Defining vCIOs from around the world: Part 3- Australia
- Defining vCIOs from around the world: Part 4- United States
- Managed Services Platform vCIO Report 2019
- Managed Services Platform vCIO Report 2020
The MSP Stories that lead Managed Services Platform projects
Some of you have been asking us about our background, who we are, and why we’re doing Managed Services Platform.
Our Challenge
One of our companies at first was an IT managed services provider. We’ve since reintegrated it into our holding company, but think telling its history will be illuminating...
We discovered that while our clients always needed consultancy on IT in general, we lacked a viable model to do it both properly and profitably. We’ve tried to incorporate the consultancy into the MSP high-end package, and tried to do T&M. Neither approach was satisfactory.
But the pressure just gets heavier as we’ve been witnessing the evaporating services on our MSP practice, accompanied by ever increasing needs of the clients for IT management, vCIO, and 3rd-party-project management, all while IT gets more complex in terms of organization management.
7C IT Management Framework
We’ve created a checklist questionnaire, the aim of which was to improves sales of our services while setting the stage for prospects. We tried to ask the questions we knew they were trying to formulate to express their needs.
We gave this questionnaire an easy to follow structure and designed it to produce a score for each taker. We’ve identified seven critical aspects of IT competitiveness today, and because we were able to pick seven words starting with the letter “C”, we called it "7C.
Once we started to send this out to prospects and clients it became a dynamic tool. The software behind the analytics that produced the score and report was popular too. Also, because it was about business terms, it helped somewhat demystify IT. It covers all the aspects of the activity of IT management that 40-200 seats company need to know about.
Reframing Your Clients
One of our ventures at this time was with our other company - where we became a Country Developer for a General Management Consultancy methodology. This was a general company development framework with strategy building, organization, execution, and alignment. Uncommonly at the time was that it was a true 100% consultancy business, though it had a monthly recurring service model, a project for implementing the framework, and recurring service revenue to maintain it.
We got curious; if general consultancy was able to work out with a recurring service model, it must work with IT management, as well.
We then started to implement the principles of the general management methodology to IT. We listed all the duties of a vCIO, from client discovery to strategy creation, quarterly planning, documentation, audits, vendor management, execution, communication, leading the internal users, IT admins, and so on.
We end up with a framework like ITIL for small clients, with implementation, project-oriented and ongoing activities. We put all this into various packages and started to offer it SEPARATELY from our MSP contract.
The kicker was that we had charged a lot for the implementation of the IT management framework.
Our value proposition was that we were able to get you from 28 to 75 in 6 months with the implementation of the framework. CEOs were able to grasp this measurement thing quite adeptly.
That was the tipping point. We have more than doubled our size in nine months. We’ve added several new clients, and several new doors are opened with the productized SEPARATED vCIO roles.
We even acquired a client who had MSP but with weak vCIO role, and have done more than a dozen “implementations." The sale itself, not to brag, went rather easily, because the result was very tangible to the clients. Everything from strategy to roles, activities and documentation, etc. is dealt with by the software. When they saw the vision and the results, they ordered the project. Then to maintain every part of their IT ecosystem they ordered the Virtual CIO services.
Everything about us follows from this story. We wanted to share our questionnaire, the scoring, the model, the pricing, and the packaging to the MSP community. Because we are running so many things at once (we are starting a pure MSP 2.0 company in Canada with no MSP resources), this venture has long held a status of our pet project.
Along the way Autotask and GFI saw an opportunity in what we’re trying to do. Both of them supported us in a big way to be able to move forward. Those guys are just awesome!!!
We’ve now pulled off a website and have a handful of companies using our beta, but are still fine-tuning the package to be able to help other IT companies the best we can
