SMB Tag

Scale and Shifting Efficiency

Shared Services NOC a Perfect Beginning

When a VAR first decides it is time to begin to shift their business to the MSP model, they start moving customer by customer away from break-fix and over to a managed service that fits their needs. This is often a process that takes months or years to get all the customers moved to the new model. In the beginning the scale of the managed services part of the business is very small and, because the VAR is new to managed services, they need help in getting their new business up and running. At this point the shared services NOC is a great solution because the shared services provider has scale to operate efficiently with a wide breadth of capabilities and to do so 24/7. In addition, the VAR benefits from the process definition and advice they get from the provider.

The Efficiency Seesaw

An interesting shift takes place as the VAR’s MSP business grows. First, efficiency shifts. As the MSP side of the business grows the VAR’s scale approaches a point that the additional efficiency of provided by the shared NOC is minimal and the remaining efficiency gets lost in communications overhead. Add to that the lack of consistent service from individual to individual NOC engineer and you are actually operating at less efficency than what you could with your own team. Secondly, as the VAR gains experience in the MSP business, they will want to be able to better define their services, procedures and workflow than is possible with a shared NOC provider. It is at this point that the value of a shared NOC becomes negative and it is time to seek a new type of services partner.

What’s Next?

At this point, the VAR needs to make a choice to either build their own NOC and deliver their services internally or to find a different type of service provider that can bring many of the benefits of the shared NOC, but without the difficulties. In my next post I will describe what is involved in doing it internally, what this different type of provider looks like and explain why it still makes more business sense to continue to partner.

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Questions Organizations Ask Prospective MSPs

In talking to a number of IT departments and MSPs over years, I hear the same few questions come up over and over when the SMB is evaluating a perspective service provider. Here is a list of what I hear most often and some thoughts about how to respond:

Do you have proven experience?
The last thing an enterprise account wants is a service provider that is learning as they go. They need an MSP that has direct, long-standing experience delivering the services they need. That’s why it’s no surprise that in a recent survey, Enterprise Management Associates found “proven experience/depth of expertise” as the top factor organizations use to evaluate prospective MSPs.
Expect the prospect to ask you detailed, targeted questions. Ensure your answers speak to your deep technical and operational expertise. Be sure to provide specific examples of similar things you do for other clients. Additionally your prospects will consider whether you can meet their longer term needs. They may ask you about your capabilities within their emerging requirements, both technology expertise and operational scalability to ensure your team can handle their foreseeable expanded requirements.  While it is most important to find a fit that works now, the better an MSP can grow and adapt along with the organization’s business, the more value the customer will realize from the relationship in the long-term.

Your takeaway: In sales situations, sell your experience honestly, give specific examples. Oversell, and you may raise flags for the person sitting across the table.

Can I see your service datasheet?
Your service datasheet says a lot about your business, and it’s a great first step in assessing whether a you are the best match for your prospect. First, and most obviously, decision makers need to make sure the services outlined map to their needs. Next, the service datasheet provides insights into how organized and packaged your service offerings are. For example, the datasheet should provide clear definitions about what services and capabilities you provide, and, if different tiers are offered, it should be clear what is added as you move up each tier. This organization in your datasheet will provide confidence to your prospect that you have thought through your offerings and are delivering them consistently. Decision makers often attempt to spot service providers that are trying to do too much too fast. This can be seen as  a sign of organizational immaturity and can signal future delivery problems. By presenting a focused set of services specific to your market, you will convey that your team is equipped to deliver on their commitments.

Your takeaway: If you do not have a service datasheet, create one.  Be sure datasheet positions your capabilities with creditably.

Who will serve as our day-to-day contacts?
We’ve all had this experience: Vendor representatives come in during the sales process and amaze everyone with their savvy and expertise. After the contract’s signed, those people are never seen again, and you’re left with the junior team to manage your service.  I refer this to the bait and switch method of service sales. For an IT service provider, success is all about the people and customers are particularly disappointed when they are greeted by the “B” team as soon as they sign on. It is important to actually have your prospective customers meet and interview the actual members of your staff who will serve as their day-to-day contacts for account management, delivery management and technical support. Expect them to treat it as a job interview, your ensure your staff is prepared to help the customer gain an understanding of how they will work together. This process will go a long way to eliminate the buyer’s remorse caused by the bait and switch sales process.

Your takeaway: Be ready to have your operational staff participate in prospect discussions. Train them to help in the sales process. Nothing is more powerful in a presentation than a confident delivery expert talking about how they will be working to meet the customer’s needs.

What is the On Boarding Process?
This will be of critical importance to most customers. Depending on the type of service being delivered, migrating from their internal team to an external service can require a significant effort. For both the MSP and the customer, it’s critical to define respective roles and responsibilities. You should attack this issue upfront in the sales process. Highlight your on boarding process as a strength in your sales presentation. Present the prospect with a plan. Be sure the plan details time frame, responsibilities, cost and the SLA provided in the transition period. This will go a long way to setting a realistic expectation from the beginning and will truly aid your sales effort. Decision makers will look for vendors that approach this upfront process as part of building a long-term relationship, rather than a one-time transaction.

Your takeaway: Make the on boarding process a repeatable process that is one of your strengths. It as an investment in a long-term relationship.

How Strong is Your Business?
The act of researching and migrating to a service provider represents a significant investment, and the beginning of a partnership. Potential customers want a long term relationship so they can maximize their ROI. Decision makers will attempt to gauge, in as rigorous and objective a way as possible, your company’s long-term viability. They will probably want to see your financials to assess profits, operating cash flow, resource utilization, cash flow, and long-term debt. Another key indicator to viability is how long you have been in business and how many happy customers you have.  A long track record with lots of happy customers is not a  guarantee you will be able to serve them in the long term, but it is also very hard to beat.

Your takeaway: You can’t make this part up. Over time, you will have a good story to tell.

What do your internal processes look like?
Depending on the nature of the IT service required, these area will vary significantly for a given prospect. At a high level, it’s important a prospect is able to gauge your operational sophistication. For example, are all your processes documented? Do you leverage ITIL? What control mechanisms are in place? How much is automated? These are all areas where you should be prepared to discuss in detail as part of the sales process.

Your takeaway: Investments in developing good processes will payoff not only in operational efficiency and predictably, but sales as well.

Can we see the reports we will receive?

Reporting is what customers use to measure the work you perform for them. Reporting is also typically the only way you can show a customer all the detailed work you do for them day in, day out. Because of this importance, prospects will want to see your reporting capability and you should want to showcase it to them. Show them how to navigate the reports to find the information they are looking for, explain how reports generated as well as when and how they will receive them.

 Your takeaway: Reporting is the primary vehicle for demonstrating your value add to your customer on a regular basis, treating it as an important element of your overall service will lead to better customer satisfaction.

Can I Tour Your Facilities?

If the answer to this question is “no”, prospects will start looking elsewhere. By refusing this request, you are raising the possibility that you have something to hide. A prospect can learn a good deal from a tour of your facility, they can get a good reading for the people and the setup of the facility will help them gauge the efficiency of the organization.

Your takeaway: Here again, good organization can help sell and will project a sense of maturity and stability. Be prepared to show off your facility and be proud of it.

Can I Speak with Customer References?

Talking to an MSP’s customers is probably the most vital step of all. It’s a critical way to verify that the service provider’s answers are accurate and forthcoming. Does the customer attest to the MSP’s claims of being responsive to inquiries? Do the promised SLA correspond with the customer’s experience? Prospects will also examine length of the customer engagements. Here again, long track records are good to show.

Your takeaway: No surprises here. Happy customers are key to survival. Happy, referenceable customers are key to growth.

Do you outsource any parts of your service to other IT service providers?
In today’s global economy and given the powerful remote monitoring and managements available, it makes good business sense for an MSP to outsource part of their operations to an external provider. However, it is important for your prospect to understand this up front. What they don’t want is to encounter an issue and start seeing finger-pointing among various IT service providers. If you use external IT service providers be sure your prospects know you are solely accountable for their satisfaction.

Your takeaway: If you use other service providers, make sure you tell a clear story to prospects.

Can I see your contracts and service level agreements?
Early on, try to get decision makers to assess the agreements that are part of your service. They need to get clarification on what their obligations are. Items like, What if the client wants to terminate early? What are acceptable grounds for termination? Will a refund be provided? Also, decision makers need to review Service Level Agreements (SLA). It is important for them to understand what specific SLA commitments you are making, and what happens if service levels are missed? Here, beyond the specifics of the agreements, prospects can also infer a lot about how the service provider stands behind their people and obligations.

Your takeaway: Make sure your agreements are current, and accurately reflect the commitments you can deliver.

Summary
If you’re a seasoned MSP, you know better than anyone the common pitfalls organizations run into when they’re looking for vendors, and how they attempt to avoid a poorly prepared MSP.  Always think about the problem from the other side. How would you evaluate MSPs if you were the customer?

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Grow your MSP business with data protection

Data protection services are a great mechanism to grow a managed service practice. Every SMB needs a viable data protection strategy, but few have it, so the available market is huge. Here are a few tips to help illustrate the benefits for your business:

  • Expand Your Customer Base—Data Protection is one of the key strategic services you can offer and the SMB market is wide open for grabs. Every SMB needs backup solutions to protect their valuable data and most struggle with cumbersome, ineffective and insecure solutions.  In addition, data protection is a strategic service that allows you to add value by providing one of the most sensitive and critical aspects of a company’s business.  You can help your customers understand the trade-offs between RPO and RTO and the importance of understanding how to build a business continuity plan.
  • Generate Additional (Recurring) Revenues From Your Existing Customers — For break/fix customers and customers you have provided professional services, data protection services allow a natural expansion of your relationship to a model of recurring revenue and value.  Many customers are looking for alternatives to traditional backup solutions and a managed service presents an attractive alternative.
  • Create Sticky Customers by Protecting and Storing Their Data — When you are protecting your customer’s data you have become an indispensable partner in their business. Hiring a new break fix VAR is easy; moving their data to a new data protection service provider is not. What’s more,  if your customer finally gets a data protection service that works well and meets his RPO and RTO objectives they will not want to leave you.
  • Evolve Your Customer Relationships — Selling a strategic service like data protection allows you to completely change your relationship with your customer from being “another” vendor selling hardware/software, to being his “virtual CIO” making strategic recommendations and delivering critical business systems. When developing a business continuity plan, you will gain deep and broad understanding of customer’s business. This allows you to deliver even more value down the road.
  • Ride the Wave of Growth— One of the beauties of any service tied to data is that data typically grows at a minimum of 20% year over year.  This means that your data protection service will grow 20% on average even if you don’t add new customers.  That is why it is important to create a business model that is able to capture the data growth.
  •  Increase Your Brand Value by Selling a Customized Offering — Promote the look and feel of your colors, your logo and your brand.  This includes all customer-facing UI components as well as reports.  This helps establish domain expertise for your company even if the majority of the technical expertise is coming from your service partner.
  •  Leverage Existing Infrastructure— If you have made an investment in infrastructure you can leverage that investment by pointing your customer’s data to your data center.  If you haven’t made that investment and don’t want to, you can point your customer data at your service provider partner and let them provide the hardware, software and operations staff, while you focus your energy on professional services engagements and sales.
  • It’s easy – An integrated console provides easy remote administration. Whether you want to be a master MSP managing other service providers or an MSP managing multiple customers, a centralized client management interface is crucial.  The web-based console provides a wide range of control over both backups and restores.  You can designate which functions are automated while still maintaining the ability to manage and monitor the entire backup and recovery process from anywhere and at any time.  In a disaster situation, you can restore files over the web or perform complete bare metal restores of desktops or servers.

Summary

Data protection services are one of the most strategic and broadly applicable services you can sell.  When selecting a technology platform for your service, be sure it has the flexibility to support your service the way you want to package, sell and deliver it. Beware of partners that require you to use their appliance or their datacenter. It is fine if they offer these as options, but you should always have the option of using you own. Also be sure the solution has the option of an on premise only configuration. This will allow you to sell your service to customers that have security concerns about storing their data in the cloud.

As customers look to move away from legacy backup solutions, your ability to provide a path forward for this ever growing space (both in terms of number of customers and data per customer) will make you the partner of choice for your small business customers.

Recommendation

At various points in the past couple years, we have had the opportunity to take a deep look at most of the platforms available today. Based on this review, we believe, Vembu StoreGrid best fits the overall objective of proving a rock solid solution with ample flexiblity to meet the needs of a wide range of customer, but while still providing a decent framework for building out your solution without a lot of additional work. In short, Vembu StoreGrid provides a world-class platform with tremendous flexibility. All of the solutions are fully brandable so you can present a single image to your customers and continue to build the value of your company.

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