Lessons Learned at Zenith's Executive Workshop - Lessons #5-6
The Zenith Executive SmartStyle Workshop, held Dec. 8-9 in Pittsburgh, attracted 40 Zenith Infotech MSP (managed service provider) partners from across the country to discuss ITaaS – IT as a Service. If you're not familiar with ITaaS, make a New Year's resolution to learn everything you can about it. There isn't a technology or vertical market that hasn't been affected by this trend already.
Jim Milliron, Team Leader, MSPtv
Day 1 of the event divided the attendees into small groups where they were asked a series of detailed questions about their business – their successes, their challenges, and their expectations for the future. On Day 2, the group leaders presented their findings from the day before. One attendee described the event as "a brainstorm in a peer group environment."
Raymond Vrabel, Director – Account Management, Zenith Infotech
Here are two lessons from the Zenith workshop that will be helpful to solution providers aiming to grow their business:
Lesson #5 – Price your managed services like a utility: In terms of utility, think "cable company," not "power company." Your cable bill doesn't go down when you don't watch much TV that month; your electric bill goes down when you don't use as many lights. You want to bill the same amount each month; don't bill based on usage.
Another pricing-related recommendation was don't be afraid of SLAs (service level agreements) that clearly articulate your process and set expectations up front. "They tell your clients how you'll act in a consistent manner," said Richard Reiffer of the Trivalent Group. "Start setting expectations that if they call at 8 in the morning, you're not going to move that PC at 8:15." If you're including a lease in your proposal, don't say "lease" or "rental" in your agreement; instead say "use of." Also, give yourself an out with any contract. Integrate a statement that you can terminate the agreement for any reason with 30 days notice.
Before establishing the SLA, consider your internal costs and determine what to include in your offering. Among the specifics to consider:
- Cell phone support (this is becoming more common)
- Desk phone systems
- Co-location (if offsite)
- Setup labor costs
- Support staff/help desk
Maurice Saluan, senior vice president of sales at Zenith, said it well: "If you're going to provide IT-as-a-Service, you have to look at everything in their office and determine what you're going to support and what you're not." Reiffer said reminded the attendees that, "When you don't cover everything in their office, you provide an opportunity for a competitor to get in the door."
Lesson #6 – Aggressively deal with your competition: Cloud computing competition comes from all over so you can't ignore what is happening. Here are four suggestions for dealing with your competition:
- Convert your enemies to your friends through strategic partnerships. Talk with other solution providers in your market and investigate what services they offer. If your businesses are complementary, maybe you can grow together. Two MSPs at the Zenith workshop had been working together for several years now and said the partnership has been beneficial for both of them.
- Be the best of the best. Since our inception 25 years ago, Business Solutions magazine has preached to the channel to be a trusted business advisor and total solution provider, not the low bidder. That principle applies to cloud computing today. You'll win more jobs if you offer the premier services in your market and are fully accountable to each customer.
- Grab market share and scale your business now. Get your foot in the door with SMBs now before giant providers move their solutions into the SMB space. To work effectively with SMBs, you'll probably need to talk in less technical terms about your offering. MSPs at the Zenith event said their hottest current verticals are: educational, finance, healthcare/medical, legal, manufacturing, and the non-profit sector.
- Strengthen your sales staff. Talk in-depth with your sales team to understand why they're selling what they are ... and why they're not selling particular products/services. Educate your sales team on the profitability of each of your products to ensure they sell what you want them to sell.
Bonus Lesson! BSM/MSPtv Webinars will focus on the cloud in 2011: Business Solutions and MSPtv will cover cloud computing in-depth in 2011. Watch for these upcoming Business Solutions Lunch-and-Learn Webinars on MSPtv (www.MSPtv.net) and the Business Solutions Managed Services Resource Center (www.BSMinfo.com/msp):
- Where Is Your Place In The Cloud?
- How To Find Customers For Your Hybrid Cloud Solution
- Selling The Cloud (Or How To Pitch IT-as-a-Service)
- How To Bundle Hybrid Cloud Into Your Managed Services SLAs
- Security & The Cloud
- Have Mobile Workers? Why You Need To Cloud
For additional lessons learned at the Zenith Executive Workshop:
Lessons Learned at Zenith's Executive Workshop – Lessons #1-2
Lessons Learned at Zenith's Executive Workshop – Lessons #3-4