Leveraging the IT Quarterly Business Reviews

Many IT managed services providers are doing some type of Quarterly Business Reviews (QBR) and most have trouble delivering it with the right cadence and voice.  It’s too technical and fails to shows business value to the executive team. Introducing QBRs poorly can backfire and land the MSP into a more technical role. Let's take a look at some cool techniques to engage clients with Quarterly Business Reviews.

Upsell your clients with strategic QBRs and IT strategy meetings

Hint #1 - Talk business

Challenge: Whereas it is not a significant challenge to talk business with most owners as they are fluent with marketing, can connect the dots with typical business process issues and understand the overall pains of the client, this is not the case with tech people.

Solution: We cannot give every account manager an MBA but we can help them to ask the right questions. Questions make magic happen in this process, especially if they discover a problem related to the customer’s business. We have put together Executive QBR Power Questions that discuss relevant business issues during the meeting. Asking the right questions can engage the client and allow you to offer technical solutions for most business problems.

Hint #2 - Find out some bottlenecks

Challenge: We all know clients who could do with a better document management system, better task management or a better general management system for the company. The trick is to qualify them quickly and get them on the same page during the QBR.

Solution: Graders can be used to qualify clients for a defined IT solution. For example, we can ask seven relevant questions with possible Yes/No options about their general productivity. The seven questions lead to 7 solutions/best practices/features and so on. Where they have low scores a ready productivity application can help solve their issues. This helps start a business conversation based on real needs. Graders about security, document management, SaaS applications are a great way to introduce this conversation.

Hint #3 - Proactive Development

Challenge: If we keep checking the warranties, antivirus subscription, bomb reports, risks and hardware replacements during the QBRs, it can become a boring technical conversation. We’d rather show them we would like to proactively develop their business and elevate their maturity.

Solution: Proactive Customer Development is an expression we use to truly assess where they are and the needed next steps in becoming more competitive with IT. It can be to implement IT Budgets, to better manage their vendors, to invest in an IT strategy workshop or just focus on NIST cyber security. We can pre-package 10-15 QuickWin IT management projects and typically sell these easy to fix low hanging fruit items. It can be a Disaster Recovery Plan, a Mobile Security Project or training the staff in going online securely. We use a questionnaire to measure many different elements, to learn what’s missing and to offer prepackaged projects.

Hint #4 - Internal Compliance

Challenge: If we do not set some goals or achieve mutual vision with the clients, it will be hard to be on the same page down the road. Setting the stage for what we mean about being competitive with IT is important. Without that, we are missing the business context of our services. It can lead to conversations of costs instead of investments.

Solution: The QBR is a questionnaire and report determining the IT benchmark by which we measure the progress for our clients. It sets standards and constraints of internal compliance with which we suggest to them. The questions are business rather than technology related, designed to understand the ‘what and why’ needed to be in place to be competitive with IT. Why does it matter to have an IT strategy? Why does it make sense to manage the vendors and check the budget? Why does it make sense to manage every device from a security point of view? It helps you to use the QBR to set goals and deliverables for the next quarter, and then track progress. This exercise can generate many opportunities with your clients.

Conclusion:

There are many ways to make the QBR better by being more client focused. The tools you’ve seen here are integral Managed Services Platform methods, and just a sample of the opportunities.  

Business focus need not be so complicated...we have the tools needed to make it easy and engaging for both you and your clients.

Calculating the utilization and profitability of a vCIO

How many clients can a vCIO viably service, and what is the utilization rate? How much revenue does a virtual CIO need to generate? What is the W2 goal rate for a virtual CIO? Many questions like these need to be examined if we want to structure our virtual CIO services successfully. Let's use the vCIO calculation sheet to figure it out!

How to transition from the server room to the boardroom

This week's question: How do I become a virtual CIO when I'm “just a tech?”  This week Denes and Myles Olson discuss a path to transition to the virtual CIO role. You may be more comfortable in the server room, but now you're needed in the boardroom.

To learn more, visit our MSP 2.0 Business Building Platform. 

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.

 

Reporting vCIOs in the United States of America

After Canada, New Zealand, and Australia, we take a look at vCIOs in the United States.  70% of all registered Virtual CIOs operate in the USA. Because of this dominance the US vCIO trends are often difficult to separate from the international scene. When we talk about US trends, we are talking about the international trends at the same time.

Develop and operate a scalable and structured account management and vcio operations

One year ago we announced a very successful polling game called the MSP East vs West All Star Game to get an overview of the geographical distribution of the US vCIO market. The poll confirmed that the eastern coast's movement is more matured than the west's.  Also, almost a third of American vCIOs are operating in the largest metropolitan areas: New York, Philadelphia, Dallas, Los Angeles, Washington, Minneapolis, Atlanta and Boston.

Based on our following research you can see the geographical distribution of U.S. vCIOs.

Now let’s see what we can learn from the recent research shown on the bottom of the blog post. VCIO experience and IT managed services provider company sizes hiring vCIOs in the US are nearly the same as the international trend: most vCIOs have more than 10 years of experience (80%), and are hired by companies with fewer than 200 employees, most of which (70%) only have 11-50 employees per company.

It is important to note that more than 12% of vCIOs are going to large organizations, with 10,000 + employees; a number much lower than in other countries, where small and medium size MSPs cannot gain much traction.

The 5 most popular schools among vCIOs in the United States aren't from the above-mentioned cities, which illustrates the wide range of schools there. Only 7% of American vCIOs studied at these 5 schools: University of Phoenix, Drexel University, The University of Texas at Austin, Western Governors University, Michigan State University. We think it’s important to point this out because it shows the vast number of choices vCIOs have in the U.S. in obtaining their education.

The most essential vCIO role is information technology (50%); however, the MSP 2.0 roles are significant too: in sales, in IT consultancy, and in business development. Very interestingly 8% of the vCIOs themselves are MSP entrepreneurs on their off-duty time.

Finally, it is significant to note that most vCIOs are using social networks to connect with industry experts, check references and create deal-making contacts. For this reason, they are members of C-level executive groups, Cloud Era and MSP network groups.

Please note: our insights come from staying open to new information.  If you find that our research is not representative of your community, please share that perspective with us so that we too can all stay on the same page.

See previous parts:

• Virtual CIOs in New Zealand
• Virtual CIOs in Australia
• Virtual CIOs in Canada
• Managed Services Platform virtual CIO report 

Reporting vCIOs in Australia

As part of our work with companies in the process of implementing virtual CIO services we are interested in the general vCIO movement worldwide. So we’ve created a series of research discussions country by country.

Although the largest vCIO movement is resident in the U.S.A., we also observe distinct trends in other countries where the movement is under way. Having looked now at Canada and New Zealand, let's travel to Australia and see where the vCIOs reside down under.

DEVELOP AND OPERATE A SCALABLE AND STRUCTURED

ACCOUNT MANAGEMENT AND VCIO OPERATIONS

The centre of the Australian vCIO movement is undoubtedly Brisbane where almost half of Virtual CIOs operated, but the vCIO movement is present in all Australian metropolitan areas: Sydney, Melbourne, Perth and Adelaide. The most popular schools are also the best executive educators from their regions: The University of Queensland and Mt Eliza Business School. Then there is a small but important minority who received their education in foreign universities.

Most Australian vCIOs have more than 10 years of experience, consistent with international trends. What’s notably different is what we see when comparing the IT managed services provider company sizes that are hiring vCIOs:

• MSP companies below 50 employees are more represented compared to the international trend, and
• MSP companies between 50 and 200 employees are barely visible in Austria with regards to this movement at around 22% of the international level.  
  
  

Further, regarding the Australian and also New Zealand virtual CIO roles, it is important to note that MSP 1.0 roles are over represented compared to the international level, while MSP 2.0 roles, namely sales and business development, have lower levels of representation. This may explain why Australian vCIOs much prefer to be members of technology-focused social media groups and why small and medium sized managed services provider groups are more popular than in other countries.

Please note: we’re always open to learn. If by chance you find that our research is not representative of your community, please share that information with us so that we can take it in and pass it on.

See previous parts:

• Virtual CIOs in New Zealand
• Virtual CIOs in United States
• Virtual CIOs in Canada
• Managed Services Platform virtual CIO report 

Reporting vCIOs in New Zealand

As part of our work with companies in the process of implementing vCIO services we are interested in the general virtual CIO movement worldwide. So we’ve created a series of research discussions country by country.

Although the largest virtual CIO movement is driven by the US, we think it’s important to have a global perspective so we try to present trends of other countries where the movement is visible. After Canada, let's travel to New Zealand and see how the kiwi vCIOs live.

DEVELOP AND OPERATE A SCALABLE AND STRUCTURED ACCOUNT MANAGEMENT AND VCIO OPERATIONS

The majority of New Zealand vCIOs are operating in the two largest regions, Auckland and Wellington - no surprise, and the majority operate in the largest metropolitan area of Auckland. As well three of the five most popular schools are also there: Unitec Institute of Technology, AUT University and Massey University.

Experience and company sizes in the aforementioned areas are very similar to the international trend. On the overall scale most vCIOs have more than 10 years of experience and are hired by managed services provider companies with fewer than 200 employees...including about half with a personnel complement of only 11 to 50. A notable difference with NZ is that more than a third of vCIOs are joining the larger organizations - 10,000 employees and more - a number several times larger than the international average. SMB managed services providers need to know these trends and keep an eye on these large organizations.

Regarding the New Zealand vCIOs’ roles, the noteworthy feature is that MSP 1.0 roles, like Information technology, product and support, are over represented compared to the international trend, and MSP 2.0 roles, like consultancy, sales, and business development, are conversely very rare so far. 

This is reflected by how the kiwi vCIOs much prefer to be members of technology-focused social media groups, rather than groups engaged in business challenges and competitive-edge development.

Please note: we’re always open to learn. If by chance you find that our research is not representative of your community, please share that information with us so that we can take it in and pass it on. 

• Virtual CIOs in United States
• Virtual CIOs in Australia
• Virtual CIOs in Canada
• Managed Services Platform virtual CIO report 

Reporting vCIOs in Canada

We work with a variety of companies that are implementing vCIO services, and think it’s important to have a perspective on the general vCIO movement worldwide. We have thus created a series of research country by country.

Although the largest vCIO movement is driven by the US, we are starting this series of analysis on our home soil. So let’s see how the Virtual CIO movement is doing in Canada.

Please note: If, by chance, you find our research is not representative of your particular situation, please share that information with us so we can all be on the same page.

• vCIOs in New Zealand
• vCIOs in Australia
• vCIOs United States
• Managed Services Platform vCIO report 

The secret to making money for IT consultation

We have been using a very basic management tool called the 10 Point Exercise, where the goal is to channel client issues into a defined consulting "product" rather than just having discussions pro-bono….getting people together to ask specific questions, getting everything out on the table and developing a plan. It’s easy to learn and it turns IT tech guys into business advisors in 20 minutes.  Most importantly though it let them charge for their knowledge instead of giving it away. Let's see how...

Get long term client loyalty with regular and strategic Quarterly Business Reviews and IT strategy meetings

We aren’t going to teach how to use it here. You can learn and practice the 10 Point Exercise in many ways.

Our focus now is on how it can be used to turn your free advice into something that both helps the client and generates revenue.

Create a process to solve problems

Let's imagine we run into our client who happens to have an issue with their IT, people or systems and are actively seeking advice. Of course we engage and try to help them. However, we do not have a process; so we miss the chance to understand the root problem together, from the start. We probably sit d

own with the client several times, as we’re often their Trusted Advisors for IT, and we don’t want them to go somewhere else. Ironically this can mean both that they don’t get immediate value, and we don’t get paid for that service.

Now imagine you have a process to turn vague issues and problems into tangible results. When next you discover one of these issues just say: "This is a perfect place to have a 10 Point Exercise!" This means sitting with a few people and doing a quick and easy exercise.

There are telltale signs to identify the proper 10 Point Exercise for solving the problem based on their scope and goals. We need to keep end goal in mind: what we want to achieve.

Create alignment

Usually when these issues/opportunities for improvement arise there are differing perspectives.  While there may be agreement on the symptoms, there is no alignment about what causes the problem, so no clear diagnosis. This is vital to get at the beginning. 10 Point Exercise questions like these can help: “What are the most common reasons our employees spend so much time searching?”, “What are the underlying causes of the low productivity of office workers?”, or “What are the most important issues behind our apparent problems with working together as a team?”

Solve a problem

Our goal now is to find how we can solve the given issues. We have alignment on the problem, we’ve defined it, but we do not have a strategy to solve it yet. There are methods that work on a general level. Questions like this can help: “What are the next steps we can take to solve the internal communication problem?”, “How can we ensure we solve the team productivity problem by the end of this month?”, or “What specific actions can we take to reduce time-wasting document searches?”

Opportunity discovery

We need to clearly identify a business opportunity out of this issue, and what we need to do to capture it. Questions like these can help: “How can we improve our internal processes?”, “What is the best way to leverage our current IT tools for better collaboration?”, or “What actions should we take to make sure we can develop the service on time?”

Project visualization

The goal in this is to be aligned with the team on what we need to achieve at the end of the given IT project. Regardless the type of IT project and before anybody jumps in and starts planning, we know what success means to every stakeholder. Questions may include: “If we think about the Document Management project, what are the deliverables we expect from this?”, “What exact results are you looking for at the end of the productivity improvement project?”, or “How would you define the success of the collaboration project?”

Decision making

Now we need to make decisions and have a commitment to particular solutions, the scope of projects and needed deliverables. Questions may include: “Which collaborative solution are we choosing for implementation?”, “What are the expected deliverables and priorities for the productivity project?”, or “Which application should we use for internal chat?”

The more complex the problems the more sessions involved. We can start to clarify the issue with an Alignment session, then have a Problem Solving session and then jump into a Project Visualization. The sequence can be 2-4 sessions in a row, or on an improvised schedule as it progresses. There can be a natural sequence here. The outcome of one session can be the input for another. As we move forward we have to set expectations about how far we need to go in certain exercises.

If the team is bigger, we need more of the same exercise and to aggregated results. Do the same exercise in smaller teams and compare outcomes. Afterward, summarize the results and present that to the board.

Nice, but how do we make money?

Most of the time we are going to charge for these sessions. On one hand, we can do it ad-hoc, but we think it’s best to have prepaid packages of 5 x 10 Point Exercises, or part of the vCIO engagement.

If we see that one session takes 60 minutes of our time not including travel, prep and follow-ups, a session can easily cost us $250-$400.

We should demonstrate the exercise in real life first, so as to prevent the client from seeing it as a cost. We want them to see it instead as a great investment to solve problems with an outside party. Being unaligned, spinning the wheels and having arguments last for weeks, are very inefficient ways to solve IT problems. The $150 to $400 we are asking for the exercise has a significant return.

An IT related project can easily cost the client tens of thousands, plus applicable internal utilization of resources. Having a 3-4 session sequence of workshops can leverage that investment in a big way. Having more precise projects, better alignment and more teamwork is worth the investment and can get rid of unmanaged, ad-hoc projects.

Conclusion:

Learn and use the 10 Point Exercise, to create an entry type Virtual CIO service. The service leads you naturally to formulate and close more projects. Your time will be monetized, and your clients will come to expect to pay for reliable and prompt solutions. They’ll get a process to solve problems while you get funding for spending time with them as a vCIO.

Escape the free-advice MSP trap once and for all

Why do most professionals charge for advice while we MSPs do not?

Isn't it a bit perplexing that doctors and lawyers can ask for $400 per hour for any and every consultation, but IT service providers are too shy to ask for $200 for their expert advice and often just give it for free? Why is the highest possible value MSPs give to the clients so devalued? Let's investigate this discrepancy and check out a couple quick tips for a solution. We are going to take a cue from Dentists.

STRUCTURE, MANAGE AND AUTOMATE YOUR ACCOUNT MANAGEMENT AND VCIO PROCESESS

There are many hurdles for IT service providers selling IT consultation. There is a lack of definitions of boundaries between these services, no expectation about what’s included in a package and what’s not, whether it is project based or ongoing, sales or consulting, and so on. This poor service design and impromptu handling of custom questions leaves us little or no margin on vCIO services.

Do you remember ever selling an MS Small Business Server with Exchange, SQL, File server, and other add-ons? That could easily have been a $20 000 - $30 000 project with servers, licenses, and upgrades. Would we give away our advice for free to get the deal done? Sure. We made a sizeable markup on the devices, licenses and project overall, so it was common practice to include advice. It was an entirely viable model at the time.

However this is no longer feasible for MSPs, so new philosophies need to be created to charge for our advice. MSPs have created a "vCIO" term and put it into the agreement as a line item to highlight some consultation on the service side.

While this makes sense, it’s only the first part of the fix.  Delivery of the services is still a challenge for most IT managed services providers. As this is an increase of the price for the client, MSPs are losing to competitive pricing from lower quality providers.  

Clients engage us for quality service, and seem to need a CRM, so we start working, expending time and resources to produce an evaluation and suddenly they change their mind. Sound familiar? We’re stuck in the one-phase model, where remuneration came with the project.  We need to create a channel that dissects the concerns of the client into phases for which we can charge.

We have to slice it up like the dentists.  

Dentists are the perfect example of channeling your problems into phases they then monetize in a big way. Once you’re in the channel, you’re likely to stay in it.

Phase 1:

ou have a toothache - you go to a dentist. You expect a free check up and that’s what they do. Then the dentist informs you “You know I see some problems, but we’ll need to x-ray to get a clear picture. It is going to be $250, but it’s our best bet to see what’s going on.”

You say, “Go ahead…”

Phase 2:

Back with the x-ray the dentist, nodding sadly, tells you there is an enormous hole in your right upper 2nd molar. It’s probably going to need a root canal. It is still somewhat hidden but definitely nasty. Unfortunately, they cannot say for sure until he opens the tooth up. It’s your decision...at best it will be around $400 to do, but if it is a root canal, it is $1.500.

You say, “Go ahead.” 

Phase 3:

Turns out it is a root canal, but you’re comforted that at least you don’t need an implant for $5.000. You’re so glad you have paid only $1.750.

Now let’s turn this analogy onto our industry.

Phase 1:

“You seem to have a CRM/Sales issue... Let's have a brainstorming session with your team. As you know, your contract includes 2 brainstorming sessions every quarter, and this is just what they’re made for.”

You do the exercise, and it turns out there are problems with their current CRM...nothing is working, there is no valid data, etc.

“We can see where your problems are at this point, but we have to investigate further...have a meeting with the vendor (tech issue?), see how people are using the system (human problem?). After that, we can give better advice. It would be a couple of hours with the team and a couple of hours with the vendor, and also a couple of hours with a CRM specialist. I estimate $1500 to clarify the problem.

The client gives the go-ahead, because the pain exists and they haven’t the expertise nor the tools needed.

Phase 2:

We conduct the investigation and it turns out that the current CRM is obsolete...not supported; not cloud-based, etc.
“What we can do is to evaluate a better system. This means sitting down twice with the team to define requirements and put together three scenarios with three different systems that can be integrated with their accounting package. We would create an implementation plan, as well to roughly see the costs of that project.

“It will be around $2000 to put it together” we offer.

The client says “Go ahead. We’ve already come this far, I want this solved.”

You can charge for each next consultation phase with a clearly defined delivery goal. Instead of being all-encompassing and all at once, we keep it real, and let them make decisions how they want proceed. Also, some clients aren’t going to want to pay for this, so we are cutting our losses earlier and not wasting our precious resources. Many clients will see the value in what we do, if we can establish and communicate this process.

STRUCTURE, MANAGE AND AUTOMATE YOUR ACCOUNT MANAGEMENT AND VCIO PROCESESS