7 Requirements for a Scalable vCIO Offering
The MSP 2.0 model is catching fire around the world. Many MSPs have already started to design, sell and deliver vCIO services. Adding $2.000 - $4000 of vCIO monthly recurring revenue (MRR) to a current 40 seat $5000 MSP MRR is now doable but requires some preparation. We’re going to take a look at the requirements (which can be easily overlooked) of the delivery to make sure we make it profitable.
All seven requirements center around a common set of principles: realizable expectations, efficiency in execution, excellent communication, and transparency.
Let's see the requirements one by one:
1. Cycle based pricing
We’ve emphasized all along the proper pricing strategies of the vCIO... how and why to separate it from the MSP package (except for the vCIO Light type services that are boosted Account Manager or Technical Virtual CIO activities attached to the MSP package). The key is to put the defined vCIO activities into separate cycles, define the resource allocation for each cycle, then annualize the hours needed for the certain activity and divide it by 12 to arrive at a Monthly Recurring Revenue. Also for each and every activity the vCIO will do is a process and defined deliverables are set in advance. It is not a consultation on an ad-hoc basis. Rather there needs to be a clear, planned process behind every service we offer.
Example: We do a Quarterly Planning Session, a Project Review, a Selected Application Training and a Budget Review. These are the services we do every quarter, and altogether eat up 10 hours per quarter, or 30 hours per year. (We have just three quarterly cycles because the fourth is considered the annual cycle). Our expectation of hourly revenue for this (just for internal planning) will be $200. That means a budget of $6.000 budget for the year. Therefore, the MRR requirement for that will be $500. Of course, we add up the annual, monthly, and weekly activities as well in the calculation of the full MRR requirement for delivering this service.
Tool Hint: the given calculation sheet is used to create different plans for different sizes/scopes of vCIO plans. See what is and isn’t inside the package, and do "what if" analysis based on the given time and expected revenues.
2. Separated Ongoing and Project-based agreements
In the MRR pricing, we can only include ongoing services. Do not even start on projects without separate vCIO Project agreements. What we can do regarding separate projects in the ongoing plan is to manage a Project Portfolio...review projects from outside, report to the CEO, have a fixed amount of resource to coach, help internal people managing different IT related projects like application implementation and so on. That leads to predictability. Individual projects have to be managed individually.
Example: let’s say during the annual planning the customer has five projects: two of them are technical MSP focused projects, one is an Application Integration project managed by the vCIO, and the other two are smaller projects managed by the internal team. The responsibility of the vCIO is two-fold. First is to make sure the projects are well defined and ready to go for both the vendor (MSP) and the internal team. This is part of the annual process, and the time is allocated ahead for those project kickoff meetings, planning and so on. The second responsibility for the vCIO is a secondary agreement that manages the Application Integration project. First, it manages the planning of the project and then the project management itself.
Tool Hint: the methodology and tool can give the best practices to maintain proper scope and clearly separate the ongoing and project-based activities. Doing both will allow us to leverage the synergy, while reporting will still occur separately.
3. Well defined services
Each and every service line item needs to be well defined over several properties. We need to get an overview of what goes into the agreement and establish the needed skills within the service, the marketing and sales materials, tools being used and a time budget. As well the service cycles must be integrated. To this end the Annual plan is going to be the base of the Quarterly Plans, the Quarterly Plans will include Monthly Progress Reviews, and so on, set up as a visible framework. The more specific we are in a service the clearer and more effective we can be both for the client and internally.
Example: The IT Strategy Planning Process is done every year. It takes 7 hours to complete and consist of three meetings on Preparation, Planning, and Finalization. The defined deliverables based on templates are an IT Development Roadmap, Quarterly Execution Plan, and Strategy Governance Plan. There are nine steps in the process, with warnings and pro tips.
Tool Hint: gathering all services related to the vCIO is critical in setting the right expectations and ensuring we deliver what we promise. Create a framework and tie the services together.
to view this video.
4. Customized Agreements
When setting up our vCIO plans, we are going to present three or four different templates, like Light, Basic, Pro, and Enterprise. These templated vCIO service offerings are designed to ease the process of setting basic expectations. However we can’t think that our clients will sign up to any template precisely. Each client is different and has individual needs. We want to avoid the need to generate custom pricing every time of course - it’s too much work to deliver ten different agreements to ten different clients - so we fine tune the templates and just slightly customize the parameters. We can take out one or two line items or change the needed time allocation for select services. The backbone of the contract will follow the template but will have room to conform to the individual client as well. Like successful automakers you offer a choice of a few sizes and models, and then further customize on a finer scale.
Example: A manufacturing company of 50 people is aligned with the Pro package ($2500 MRR), and they have two main locations. The Annual Planning will be in one place but the because the team is separated the quarterly activities will eat up more time. We can allocate a little more to the quarterly activities and delete the user training entirely. Overall we get retain the $2500 MRR with the same profitability by adapting the plan to the situation.
Tool Hint: in the tool the contract module allows you to customize the agreement based on the template. You can add and remove service line items and adjust the hours. Further since you may be utilizing junior vCIOs for some cases, or your CEO will be in on the Annual Planning, you can adjust the internal hourly rates line by line. It promotes the right expectations and strengthens your profitability.
5. Executable deliverables
You know you have the skills, tools and resources to operate a vCIO service at a high level. You are ready to do annual planning sessions, discovery business sessions and so on. But how precisely defined are those activities? You don’t want to engineer a new launch system for every spaceship. Have a standard best practice with todos, notes, agenda items, templates to make it a smooth practice. If our deliverables are not specifically defined with properly set goals, even with these processes, we can neither manage the vCIO service nor the client involvement. The devil’s in the details.
Example: The vCIO goes to a manufacturing company and starts the Project Visualization workshops. He has the meeting agenda items in a template, the goal he has to reach, the time slot for the meeting and knows the next steps. The vCIO can explain the process quickly to the CEO, that they were just gathering basic information now, and the next step is to make the selection criteria for choosing vendors. The client likes that there is a process for that, sees the momentum and decides to let the vCIO initiate the planned service right away, and skip the next sessions. Thus clear definition of deliverables reduces the disruption and time involved as a result of client-side disruption.
Tool Tip: Every vCIO service line item is well defined yet gives room to adapt for the vCIO. There are task lists, tasks, agenda items, meeting memos and template files. It has all the execution ability for the vCIO and full option to improvise if needed.
6. Transparent workspaces
A vCIO performs a very high-level management job that can be boring and not so visible sometimes. Negotiations with vendors, internal project meetings and keeping people accountable in weekly huddles are usually not seen by the client executives. Things are going to go well, and projects will be delivered on time, yet directors can get complacent and forget they were ever issues. We can’t just create value, but must also prove and demonstrate it consistently. Smart Client-facing Workspaces are the tool to keep our sponsors informed about our activities. An intelligent collaboration tool, it can send the essential digest to the upper level.
Example: The vCIO is finishing the monthly review and checks off the items done that week, and the projects completed. Then in the chat he applauds a job well done and thanks a particular member for the overtime last weekend. Then come the plans for next month based on the activity templates, and updates completed items of the IT annual plan. Now the system sends a daily digest to every team member showing the last items on the discussions, the completed todos, the updated memos and so on. The CEO has a quick glance on the incoming email and gets a reassurance that his vCIO is working 24/7 for his company.
Tool Hint: While most IT companies are using PSA solutions like Autotask and Connectwise, they are limited. These applications work best for IT teams and not for client executives. We integrate with Basecamp as a lightweight project management and collaboration application to make things light enough but still easy to manage.
7. Management Dashboard
Many IT managed services providers see offering vCIO services as a good idea, but without proper processes, vendors, and management maturity, scaling the standard MSP practice can still be a nightmare. If an MSP is able to reach 12-15 people level it can accommodate 1-2 vCIOs full time. Even with workspaces and processes in place some activities will become overwhelming pretty soon. How can we stay efficient and overlook 10-20 clients with 1-5 projects and ongoing services for each without losing our minds or our clients? That’s why we need one dashboard for someone overlooking the vCIOs, and one for the vCIO as well to prevent overlooking the team's tasks and responsibilities.
Example: An average quarterly cycle defines 40-50 tasks easily for a vCIO. Having ten clients is going to scale up 400-500 tasks for the cycle. We need a way to reduce the clutter, to hide the less pressing tasks and show what matters. We can slice and dice the dashboard quickly for individual accounts, contracts or projects. This gives us the peace of mind that we can handle that load of activities, and stay sane.
Tool Hint: We’ve designed a layer as an umbrella above every project, and ongoing workspaces for vCIOs to operate. We get every task, deadline and assignment there. At the start we see just the big picture, then as we delve into accounts and then to projects we drill down to the specific tasks and deliverables.
Conclusion
Take a moment to think of each of these 7 requirements not being in place. What if we don’t have the proper process for the vCIO, how would it affect efficiency, the management, the headaches and so on. How could each one enhance your current possibilities, profitability, and peace of mind? How could they help you build up a professional service company and distinguish yourself from the competition?
MSP Financial Intelligence with Larry Cobrin
Larry Cobrin, CEO/Founder of MSP CFO, has been working on a project to make financials available for IT managed services provider to make better decisions. In my first call with him I knew we needed him to talk about finances! I was fascinated by his insights about clients’ profitability trends, classifying them and taking actions for better profitability.
He shares a lot of hints and tips about different data you need to look into (which are mostly available already in your PSA) for your organization to make better decisions. If you feel you are leaving money on the table check out this interview!
Larry’s interview is available in a Podcast format here.
START GROWING WITH MARK'S MSP SALES RELATED RESOURCES FOR FREE
5 KEYS TO GENERATE, QUALIFY AND CLOSE MORE SALES
Have you ever wondered why you struggle to communicate your values to your prospect, why prospects stay with their current provider even when they’re not happy, you have a hard time closing deals that weren’t referrals, or you just can’t find a way to consistently close sales? This recorded webinar with our MSP sales expert guide, Mark Woldman, will show exactly where you are going wrong and help you develop a plan to move your sales forward.
CLOSE MORE DEALS WITH A PREDICTABLE AND REPEATABLE MSP SALES PROCESS
Watch this interview with our MSP sales expert guide, Mark Woldman, to win over new prospective clients by finding best practices that will help your MSP become Sales-Ready. Here you’ll learn key concepts and practices that will move your sales forward!
MSP 2.0 Podcast
We have been producing interviews with MSP Thought Leaders and with our clients for more than a year now. We started this as an ad-hoc practice to usher great MSP 2.0 insights into the community. People seem to be enjoying the free interview format without presentation, special offers and other sales tactics.
Now with over 16 interviews we’ve received a ton of feedback and the message we’re getting most often is to make the content available in a podcast format. Many people like listening to these inspiring talks during their commute, or just in the background.
So we have transferred all videos to a Podcast format and it’s available here. What we started as a fun exercise to get people talking had a great impact. We’ve seen that many people:
- started to work on the execution skills after the interview with Chris Day - IT Glue.
- were inspired by the way Greg Tanner restarted his MSP with virtual CIO.
- got started selling vCIO after Rich Anderson explained the model of transition.
- started to think about the cold calling as a strategic lead generation effort after the inspiring talk from Carrie Simpson.
- started implementing high level services after Colin Knox from Passportal told us stories about his managed services provider's vCIO services
- started to work on Process Management initiatives after a talk with Ryan Williams.
I could go on with examples, but these are the people who inspire, educate and share their thoughts and dilemmas.
That is why we are going to take this to the next level: to get ad-hoc interviews as well as more organized talks with more background information. For example next week I have an interview with a bestselling author about sales transformation, and we’ll share more collaterals, and practical information after the interview.
So stay tuned! In 2016 we will have more great content from more smart people who have compelling things to say and will help to push the MSP 2.0 movement forward!
12 mistakes most MSPs make with their Virtual CIO services
The Virtual CIO phenomenon is not new, yet the promises of the role have not been realized across the industry. Some mature MSPs who believe they have a functioning Virtual CIO 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 MSPs.
#update - We released this blog a year ago. This is an updated version covering the latest developments. It seems that the MSP 2.0 community was able to solve most of the issues during the last year. These mistakes now can be prevented. It has been a long year, for sure... :-)
Virtual CIO 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 IT company 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 IT 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.
#update - Working with clients around the world, we have designed a smooth transition from vCIO Light to a real vCIO services. That means even if you packaged together, there is a way out.
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.
#update - there is a formula now for calculating profitability regarding virtual CIO services, the services and service delivery processes, as well.
Mistake #3. Not using a framework to develop the system
The vast majority of the Managed Service 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.
#update - a complete structure is ready for the various vCIO activities like Planning, Project Management, Education or Execution. The closed loop vCIO cycles have been completed with Annual, Quarterly, Monthly and Weekly cycles.
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.
#update - content and tools to qualify visitors are now available, like graders, ebooks
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 Managed Service Providerss, 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.
#update - business related content is available in different formats like graders, ebooks, emails to quickly put business content to the MSP website. (even a complete Weebly based canned MSP 2.0 website is available now for early adopters)
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.
#update - various lead magnets have been developed to convert visitors to leads
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.
#update - consultative sales questionnaires, scoring, reports, targets, benchmarks and help are available for making the consultative sales easier
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.
#update - storytelling process for the first meeting with presentation slides have been created to help telling stories
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.
#update - graders & new questionnaires are ready to get real with prospects and clients
Delivery
Mistake #10. Not using vCIO tools like automation or collaboration
Most IT companies 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.
#update - Basecamp integration is ready to collaborate with clients & vendors
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.
#update - separated process for ongoing vCIO s ervices and Project based vCIO services are available with templates and Basecamp workspaces
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.
#update - application related services (like Implmenting Slack) are available and also Business Modeling and other cool business focused workshops
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 Tools. 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.
#update - thanks for the contributors, our team and all clients to put this all together. A year ago it was just the mistakes, now the MSP 2.0 community can prevent those mistakes! Thanks guys!
STRUCTURE, MANAGE AND AUTOMATE YOUR ACCOUNT MANAGEMENT AND VCIO PROCESESS
Closing 11 Virtual CIO contracts in 3 weeks
Greg Tanner from Denver is a maverick, no question about it. His “Technology Quarterback™” slogan has become a meme among the MSP 2.0 community. We spoke the other day and I am still speechless. He started crafting this vCIO offering back in June, piece by piece, and started selling it in early October. Since then he’s closed 11 virtual CIO contracts with over 20K MRR! In this video, Greg shares the secrets to these amazing results. Be aware, he has very strong opinions about MSP 2.0. (Even stronger than me - Haha!)
I shared this video with some of our Members a month ago and received great feedback full of inspiration and praise for his efforts. A big THANK YOU to Greg for sharing his thoughts with us!
Greg’s approach is somewhat disruptive, but very effective. Grab your seats and get ready to take some notes. This is going to be an intense ride!
Delivering Business Focused QBRs
ADAM WALTER AT VIRTUAL C
You would like to be a high-value business partner in your client’s eyes rather than a basic technology service provider. Your QBR process is a critical part of influencing their engagement up to a higher level. Watch this recorded webinar with our vCIO expert guide, Adam Walter, who has shared his 5 step process to make any technical QBR into a business-focused one.
6 Best Practices of Top Performing vCIOs
ADAM WALTER AT VIRTUAL C
Watch this interview with our vCIO expert guide, Adam Walter, to learn how to be more engaged with clients by finding best practices for becoming a trusted business advisor in 6 single steps.
10 ways MSPs are leaving money on the table
Keeping up the margins for IT managed services providers is getting harder and harder. The competition is catching up and while needs of the clients keeps growing, the price still seems to be dropping - and many IT companies are making a practice of leaving money on the table. Let's look at 10 things you can fix to prevent losing money every day.
1. Having no CTAs on your site
How many MSP Blogs have great content but nothing to do? Even if the prospect likes the content; that’s a dead end. There are no next-steps or call to action; no way to download something or move further into a workshop or webinar or launch a module and learn.
$$$ - invest in having visitors and do not convert leads
2. Talking about how cool you are
The website should be about the clients and how they can benefit rather than descriptions of ourselves, especially on the main page. You have to grab their attention and quickly engage them. Focus on talking about their IT problems, issues and challenges and the potential solutions.
$$$ - lower conversion rate on your site
3. Talking about IT
IT talk is for IT people. Business people are looking for business talk. If you are talking about Office 365, or Virtualization or the Cloud, you are going to lose their interest. Talking about margins, productivity, process management and salesforce automation is how to keep the attention of your prospects.
$$$ - lack of differentiation puts you in the herd
4. Offering consultation on the first page
Very few visitors will be engaged enough on the first page to book a meeting with you. They are probably open for discovering solutions to their issues and reading informative content. Only then should you move toward getting their email address. First nurture the relationship - after this is established you can start talking about a potential appointment for a meeting.
$$$ - feels too salesy or pushy
5. Pushing the Network Assessment
In the good old days, prospects were begging for the Technology Assessment, and you were even able to charge for it. Now, however, most IT systems are robust and the assessment is no longer required, so making that in the central feature of the sales process can be lethal.
$$$ - not closing deals
6. Having only one service package
Yes, in 2008 there was only one iPhone - now you can buy three sizes in four colors. Client expectation is rising as the industry matures. Limiting your prospects’ choice to one offering is preventing your them from becoming clients.
$$$ - not closing deals
7. Building the Virtual CIO into the MSP packaging
The surest way to squander the potential of the Virtual CIO revenue stream is to bundle it together with the MSP package. It downplays the value of the Virtual CIO to just a tech advisor doing tech roadmaps and warranty notifications, instead of capturing the opportunity to maximize their competitive edge.
$$$ - eliminate margins and give free advise
8. Developing Virtual CIO practices in-house
Development of Virtual CIO service offerings requires strong management skills as well as a lot of trial and error to get it just right for the specific instance. Developing it in house eats up the time of valuable resources and can lead to dissatisfied customers during the development phase.
$$$ - huge internal cost and time investment
9. Executing Virtual CIO without structured processes
Executing Virtual CIO activities without repeatable processes requires highly skilled people who, even if they can be found, will be asking for a fee. Teach one smart person the vCIO processes and give them tools to help them to deliver value to your clients in a profitable and scalable way.
$$$ - no margin for vCIO services
10. If it's not broken, din't fix it
This is an adage that is misapplied to this industry. It is misguided to think nothing has changed and there is no sense of urgency around this change. Complacency has brought down many large, otherwise successful organizations in the past. Taking commoditization lightly can cost you your entire enterprise in the end. Take advantage of this new standard and turn your organization in the right direction, fast.
$$$ - fix a broken business model instead of changing it
Conclusion:
The MSP 2.0 movement is catching fire and re-energize the commoditization of traditional MSP services. The traditional MSP marketplace has changed a lot, and without proper strategy and actions it can damage any IT service provider.
Take action and learn more about the MSP 2.0 movement.
Increase revenue with process related Virtual CIO services
Ryan Williams is a superstar CEO of the ProcessPlan SaaS application. He really knows the MSP arena well, as he is also VP of Business Development for the MSP Nexxtep.
I was intrigued to have an interview with him because of my belief that IT companies are specialists in process. Clients need process management experts, but that’s usually seen as a management role, and not a tech discipline. Ryan has changed this with his tool: ProcessPlan is awesome software that can be used for planning and managing processes. It makes the process problems tech problems, so the IT managed services providers can leverage them to sell process related Virtual CIO services to their clients.
Let’s check out his ideas and have a look at how this great product integrates with Connectwise (See How ProcessPlan Can Help Your Organization), which we use both internally and as part of our vCIO processes.
Delivering Business Focused QBRs
ADAM WALTER AT VIRTUAL C
You would like to be a high-value business partner in your client’s eyes rather than a basic technology service provider. Your QBR process is a critical part of influencing their engagement up to a higher level. Watch this recorded webinar with our vCIO expert guide, Adam Walter, who has shared his 5 step process to make any technical QBR into a business-focused one.
6 Best Practices of Top Performing vCIOs
ADAM WALTER AT VIRTUAL C
Watch this interview with our vCIO expert guide, Adam Walter, to learn how to be more engaged with clients by finding best practices for becoming a trusted business advisor in 6 single steps.
Building Starter vCIO Services
There is no question that vCIO service is no longer a nice to have service offering for IT managed services providers.
- It is a needed offensive strategy to tap into the growth potential of the prospects with high maturity.
- It is a perfect defensive strategy to keep the prices up and protect our client base from low price entrants.
However, the delivery of IT Management services is not entirely new; most IT companies have some issue to monetize on this opportunity.
During the webinar, we are going to learn a lot about how to tackle the challenges, and start implementing vCIO services. It is a service your team can execute, it’s scalable, and you can start to charge for it.
- The basic building blocks of our consulting services
- Building proper plans for the different client types
- The boundaries of our services to make money
- 15 Quick Win vCIO light projects to start tomorrow
- The process of MSP marketing and selling the services to existing clients
Delivering Business Focused QBRs
ADAM WALTER AT VIRTUAL C
You would like to be a high-value business partner in your client’s eyes rather than a basic technology service provider. Your QBR process is a critical part of influencing their engagement up to a higher level. Watch this recorded webinar with our vCIO expert guide, Adam Walter, who has shared his 5 step process to make any technical QBR into a business-focused one.
6 Best Practices of Top Performing vCIOs
ADAM WALTER AT VIRTUAL C
Watch this interview with our vCIO expert guide, Adam Walter, to learn how to be more engaged with clients by finding best practices for becoming a trusted business advisor in 6 single steps.
Implementation of the Virtual CIO Services with Rich Anderson
Implementing vCIO services can be a challenge. New ways of thinking, new lines of services, pricing and packaging, and service delivery all abound. Rich Anderson, CEO of Imagine IT has been working on this for a couple of months now. I asked him about his experiences, challenges, solutions and results. If you are thinking on implementing Virtual CIO services, or if you have been working on that already, let’s pick his brain. He’ a smart guy and explains everything very clearly with tons of hints and tips. Enjoy!
Delivering Business Focused QBRs
ADAM WALTER AT VIRTUAL C
You would like to be a high-value business partner in your client’s eyes rather than a basic technology service provider. Your QBR process is a critical part of influencing their engagement up to a higher level. Watch this recorded webinar with our vCIO expert guide, Adam Walter, who has shared his 5 step process to make any technical QBR into a business-focused one.
6 Best Practices of Top Performing vCIOs
ADAM WALTER AT VIRTUAL C
Watch this interview with our vCIO expert guide, Adam Walter, to learn how to be more engaged with clients by finding best practices for becoming a trusted business advisor in 6 single steps.
Starting vCIO projects the right way
Many IT managed services providers see opportunities with their clients that aren’t related to the existing infrastructure. Clients are instead looking for help deciding which CRM they should use; how they should migrate their many Excel spreadsheets to a Process Management application or with something else that needs IT management expertise. You want to help them, of course; you are the trusted advisor, even a dedicated vCIO. The main question is: how do you start a project AND start charging for your project management duties from day one?
The short answer is that you can start planning a solution, if you have the right scope for the project. However the process of scoping the project takes time, research and meetings. Clients are reticent to pay for this because it takes place before the sales cycle. To overcome this challenge, you have to make a deliverable product out of this process.
For that you need to apply a Project Best Practice called "Visualization" to be able to get from vague ideas, concepts and needs, to a written document that consists of everything needed to start planning the project. Without this Best Practice, the process is not tangible to your client and thus not a billable item.
For example, you may be approached to give suggestions for productivity suites, where some basic collaboration tool can be considered as a small-scope project. Medium-scope projects are a review of the current accounting system and giving some suggestions, or being asked to help them fix one process of their teamwork with some project management tool.
Anything bigger like Document Management and Sharepoint-type projects are large or custom projects.
Still, in the end your product will be: enabling your clients to make decisions, and finding the right solutions for their business problems. We can can design some project planning and strategic implementation, but we have to create a separate service for that!
The result of not having proper visualization up front: showing up to the client with no value for necessary visualization phase.
What is Visualization?
Visualization means clearly picturing the desired results before embarking on the project. It answers the questions of what we want to achieve and why. For a small project, it is enough to have an informal call with every stakeholder to find out what they need at the end of the project. For a more complex project, this needs to be in a written format so priorities among the different issues can be set. The more people involved the more sense it makes sense to communicate the priorities in one statement that includes all of the stakeholders. This creates more alignment upfront; however, it takes more time to complete. For larger initiatives, serious kickoff meetings need to be facilitated to talk through the problems and discover opportunities, threats, and different opinions.
Our objective at this point is just to create a Visualization of the project. It has a defined deliverable, the process to achieve it and a price tag to sell it.
We have developed a Use Case showing how to start vCIO services with activities like visualization to bring more value to the client here:
Goals of Visualization:
1. Starting with the end in mind; defining the "why": Visualization is going to create a picture of the end we have in mind to remind us why we want the solution. What is the original problem we want to solve? What would be needed for success? What does success mean anyway? If we are putting together a cloud strategy for the client, what is the overall need or business case?
2. Defining the required outcomes: To properly evaluate the project’s progress, the desired outcomes must be drawn from the client - not always easy to do. We need to have more than a ‘feeling’ of what needs to be done, or we can easily fail. The required outcomes are statements of what the client needs.
3. Feasibility check: Dreaming big is easy, but executing the project with a positive ROI is critical. There is a chance that the solution is will not produce a minimum required return. We need more time and money to invest where we can see results. In most of these cases we figure out a compromise to get the required outcomes - such as scaling back some features.
4. Broad Alignment: Alignment on what we need to achieve and what are the factors of success is needed among the client and vendor teams. As virtual CIOs, we are not going to manage only our team’s infrastructure projects, but projects involving different vendors as well. We have to create the necessary baselines for working together.
5. Assign the potential resources: Before we plan, we have to understand what capacities the client has and what is needed from outside. This is of course a project design input but will also determine the potential budget of the project. The more resources they need from outside, the higher the budget will be. We must also understand required amount of project management to determine the proper amount of support.
6. Create the inputs for the planning phase: We have to put all of this together to make sure we can proceed to the planning phase. Set clear goals, keep the end in mind and focus on required outcomes for a quick plan. Anticipate unforeseen questions will arise in the planning phase...this just means some more meetings, more changes and more work for everybody.
Process of Visualization:
1. Key Stakeholder Interviews: Key Stakeholder interviews are necessary to learn all that is needed from key people. A stakeholder can be the CEO, the owner, the manager of the department or even an employee who will benefit from the project. Our goal is to discover their need, the outcome they are looking for and their priorities.
We sit down in a 1-1 setting with the stakeholder and conduct the interview. It should be a formal meeting, but it can be done over the phone if needed. We highly recommend using a template like the vCIO-Project-Stakeholder-Sheet in our vCIO Quickstarter Workbook. It helps you stay organized and keep track of every detail for later. It is a fairly simple process to follow.
For a small project, it usually takes 1-2 interviews, for a medium at least 3-4 to find out the needed deliverables. You can count on 30-45 minutes each.
2. 10 Point Exercises: We have been using the 10 Point Exercises in many ways: during sales, to find opportunities, for vCIO activities and so on. In most cases, we sell a 10 Point Exercise that raises the questions that come with “we need a project.” It can be sold in a Quarterly Business Review, or it can be sold during the vCIO process, and will function here to support the goals of visualization.
The exercise itself is a group session in which you facilitate the people involved in the project to make decisions. They need to prioritize the various aspects of the project and understand each other's individual perspective. It is a very powerful exercise!
The end of the exercise is a prioritized list about the needed deliverables of the project.
For a small project, you need 1-2 exercises; for medium projects it usually takes 4-6 sessions. One session takes about 25-30 minutes to do. If you put together 2-3 sessions in one, you can save time.
3. Project Initiation: If we have agreement on the project definition and a vision of the requirements for success in mind, we can proceed with planning. This means putting some integration and making some decisions. For a quick overview, you can use the vCIO Project Management Workspace.
We can put together the Start/End date, the roles, the project manager, vendors if any, and so on. That means, if the team agrees on the priorities, we can move forward and start the plan of the project.
Putting together all the things needed for a small project with little research takes 1-2 hours. For medium projects, it can consume 4-8 hours to put together your thoughts.
Check this video for further information about visualization.
Conclusion:
Without having the process to get together all the preliminaries of starting a project, we would be in trouble. Either we have to pay forward a lot of hours to make it happen for free, or we start project planning without knowing the priorities.
A small visualization with 1-2 interviews and 1-2 10 Point Exercises takes about 3-5 consultation hours to conduct. It is somewhere in the $500 - $1000 range. It is great for choosing SaaS applications for productivity and process management for even smaller team collaboration tools.
A medium visualization with 3-4 interviews and 3-4 10 Point Exercises takes about 4-7 consultation hours to conduct and is in the $1500 - $2000 range. It is great for choosing a CRM, or for a basic accounting review and evaluation package, project management tools and advanced collaboration tools.
