The Managed Services business was created from the traditional suite of desktop management, backup, network and server support. Most MSPs now are offering various services outside the traditional managed infrastructure scope: application management, additional security or virtual CIO services. This is the evolution of managed services, and the right way, however many MSPs have just reactively added some of these services to stay relevant to their customers and protect the core MSP services. They might call themselves "your IT department." Let's check out why it’s a problem and what to do about it.
Carrie Simpson, Founder and CEO of Managed Sales Pros talked with Denes Purnhauser, CEO of ReframeYourClients, and shared the most common mistakes IT managed services providers make when it comes to building their vCIO offerings, and how you can increase your MRR with the correct approach.
The topics in this webinar were:
- Why vCIO services are critical to keep clients engaged in the long run
- The five biggest mistakes MSPs are making with their vCIO services
- Why service productization is the reliable way to scale a Managed Service Organization
- How to make vCIO services scalable with service productization
- Process of service productization
- The right pricing model for MSP and vCIO services
All our accolades to the development people in the Connectwise Team and the super beta users; after three months of development we’re happy to announce the Connectwise integration is live.
I know integration is a boring subject and I don’t intend to explain the details of the features here. But the development process and the results have been prompting many to wonder where the software industry and specifically the MSP servicing software industry is going.
Ours was not just a simple data based integration. Our tool is actually running inside Connectwise with customized screens. One doesn’t even need to log in to our native tool to use all the features inside Connectwise, like execute Account Management, vCIO activities and running discovery workshops with prospects.
The question I am raising is: are we actually heading to where we have only one application that runs our MSP, and all the vendors create “modules” for that application?
As we have been talking with hundreds of Managed Services around the world we have been able to identify several common beliefs, and even myths shaping their thoughts.
The biggest problem here is that these beliefs were valid in the past. The times when the MSP model founded and spread across the world, these concepts were helping people to sell and execute services. However as the market went forward with the tectonic shift of consumerization, cloud, mobile and the overall maturity of IT, these beliefs are no longer valid.
I just watched a hilarious 2 minute Youtube video where a comedian recounted the tale of someone righteously indignant over the atrocious inconvenience of the wi-fi breaking up during his trans-Atlantic flight. It made me ponder the trend of setting unrealistic expectations when it comes to technology. We have a short memory for problems fixed, take progress for granted and miss the chance to revel in our achievements.
Then I was thinking that perhaps this reminds you of a type of client of yours who is spoiled by all the progress and never satisfied. Who set these unrealistic expectations? How can we make sure we're not creating the problem ourselves? Check out this quick video and see what we can do to prevent it happening.
Having been inspired by the business model canvas, we started our own IT Management Canvas almost three years ago. We’re thrilled to see how creatively people adopt the canvas with the related questionnaire and instigate vibrant client engagement. Through our development of vCIO and IT Security related assessments, the new canvases have been born. Let's check out the revision of the original 7C IT management Canvas, the IT Security Canvas and the vCIO Canvas.
People are talking about MSP sales processes when it comes to discussion of new client acquisition. I believe we should see the process from the customer's perspective and realize that the buying process for them is terrible. Given the current typical buying process, a working future strategic relationship is becoming less and less likely. Let's take a look why the process is broken and see if we can figure a fix.
There are three major underlying issues causing this trouble:
Two weeks ago we posted the interview with Verne Harnish, author of Mastering the Rockefeller Habits and Scaling Up! The interview has inspired many of our clients and readers to think about particular aspects of their business. I’ve personally been experimenting within two of those aspects lately, based on his thoughts: Hyper Specialization and Service Productization. I just wanted to share an update on how we’ve developed what we learned.
We are continuing the “MSP 2.0 bestseller” series in March, as well. No question, one of my all time personal favorite books is Mastering the Rockefeller Habits from Verne Harnish. It helped me to apply the paradigm of “work on your business instead of in your business”. For many Managed Services Provider leaders this book has been a foundation to building their businesses. He’s followed this with his new book Scaling Up - Mastering the Rockefeller Habits 2.0. I had a chat with him about the required steps for Managed Services Providers to stay on top of their business and to start Scaling Up!
Verne is straight to the point, so put on your seat belts and get your notepad open, this is going to be a high-paced trip!
This is a motif that’s had some traffic in the last few weeks in several situations, coming up in conversations about differentiation, going the extra mile, remarkable service, engaging clients, building a brand and the use of stories in this business.
One of our managed services provider clients told us a story about a fashion design client in Los Angeles with fashion conscious California team members. The office is artistically designed of course, with bricks, standing desks and an open cafeteria with bar tables. Lots of nice, creative radiant people having lattés while working makes this the place where techs are making up reasons to go every day.
He had some work out there and got inspired by the environment to get expressive, so he bought pink cables instead of the boring black ones.
He was just having fun. He didn’t predict the result...
One of the most under-appreciated success factors of an MSP is its capacity to develop services. We’re the purveyors of Managed Services; there are hundreds in the repertoire of any given MSP. This keeps us busy - going from concept to a product that can be sold and delivered is a long road. While product based companies have a process for product development, we service companies too often overlook the value in this powerful business practice, where all our innovation, differentiation, profitability and growth can be formulated in advance.
The trend of fragmentation in services - into verticals, delivery tools, integrations - just multiplies the need for planned process.
The usual development process for managed services providers is to do a project - develop something that solves a problem for (and with) a specific client and standardize it later. This can lead to long term future revenue, but without a clear process mixing up service development and the real revenue generating activity of the company will not only kill our internal productivity, but likely our relationship with the client, if everything they see is always in beta testing.
Let’s identify some basics to ensure our process is better than the average and pull ahead of the competition.
One of the most common and largest hurdles for MSPs is difficulty expressing our value proposition properly, and hence differentiating ourselves.
There are two fundamental aspects of our industry responsible. First is the abstract nature of the proposition. The problems we solve are less tangible, like “competitive edge” or “staying ahead of the curve” rather than “keeping the lights on”. The second is the more managerial and higher level services such as solution selection, and team alignment and integration rather than executable defined processes like device management and remote monitoring.
Without a doubt that which is more tangible and more clearly defined is easier to explain, sell and even deliver. We try to answer the question: how we can make our vague and complex services more tangible.
The process below will first identify the different types of services you have, then set up a structure to help manage this process. Then we’re going to demonstrate the practices to enhance different types of less tangible items into a more tangible format. You’ll see how you can actually transform the most difficult to monetize services and make your service portfolio more ready to explain, sell and even deliver.
A few months ago we started sessions of real peer groups, to get people together to discuss real issues, problems and challenges we’re all facing and hopefully to come up with some individual plans that boost the accountability of process execution. From these I’ve compiled a list of topics that are front-of-mind among participants. I can report that the discussions dealt with the problems in a very forward looking manner, with creative solutions and not stuck in status-quo thinking. In my opinion these sessions are giving a unique insight into where the industry is going.
I came across an illuminating infographic in the last week that discusses the different strengths and weaknesses involved in these demographics.
The other day I made some calculation with a client about vCIO services. Fortunately it is very easy to calculate your opportunity in creating a profitable and scalable vCIO service offering.