strategic planning 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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The Core Four

Back when we were launching services at NetEnrich, we often had conversations with VARs about how to get into selling managed services and what services to initially launch. The initial services in your practice are your core services. We actually have four services we recommend as a starting point. We call this group of services, The Core Four. They are easiest to sell because the ROI is clear and they have broad appeal because their value is universal all companies. Additionally, these services create a “foot in the door” that provides a foundation for you to sell additional specialized services down the road.

The Core Four

  • Backup & Disaster Recovery — Every business needs a viable way to recover its data in the event of a disaster. Traditional solutions are too costly and too complicated for typical SMB customers. Protection from data loss, local failover and complete disaster recovery are now available to your SMB customers in an easy to consume and affordable service.
  • Hosted Exchange — Email is the life blood of any business, but the cost of infrastructure, licensing and expertise to properly manage it is out of reach of most small companies. A hosted Exchange solution delivers an always working and fully updated Exchange with no expertise required from the customer, all at a lower cost than a local exchange server.
  • Desktop & Server Management — Most work stops when a company’s IT systems break. Typically your customers will have to wait for your technician to arrive, troubleshoot and then fix the problem. All this time is lost productivity for your customer. Desktop and server management services perform regular preventative maintenance to prevent most minor problems. These same services can monitor the systems to catch bigger issues and fix them remotely before they create downtime for the customer.
  • Helpdesk — The profit margin on SMB customers demands a low touch model, however we know many small customers can become needy. The helpdesk service allows you to monetize these high touch customers while you and your staff remain focused on higher margin projects. A helpdesk service provides an affordable and affective resource to keep the users productive.

Specialized Services

After you establish success with The Core Four, you will likely want to add a few specialized services. Examples of these services include: VoIP, hosted SharePoint, email archiving and many others. In future posts we will discuss how to best select your specialized services and pricing strategies for your services.

Be sure to let us know your thoughts or what you would like to see us discuss.

 

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What are we doing?

We started this business because we wanted to take the success we had over the years and help companies become more effective at meeting their revenue goals. We also had misgivings about becoming consultants. We saw consultants as someone who would drop in and out, but after the engagement the company never felt like we knew what we got from all the investment of time and money.

Consultants & Advice

We have all worked with consultants in the past, and for the most part they came in, made some astute observations, gave us some good recommendations and moved on to their next engagement. We were then left to our own devices to actually implement their recommendations and derive any real value from the engagement. While we can see some value in this type of relationship, we also see big disadvantages.

We believe most companies need more than just advice. There are a number of reasons this is true, but more than anything else, people are generally busy with their job and do not have additional time to really get the results they expect from the a consulting engagement. When they do have time, they often lack the experience to maximize the benefits from the recommendations they received from the consultant.

Beyond Advice

We saw a need for a different philosophy, one focused on actually producing results for our clients and not just giving them advice. Instead of offering our clients recommendations we get them to find their direction and to become self sufficient in that direction.  Based on this philosophy, we actually work with our clients to implement recommendations and produce the results they want to achieve. In this process we work closely with the team to optimize the process and maximize the results. Our engagements cover a spectrum of areas ranging from strategic planning and product conceptualization to lead generation and social media programs to website design and content creation. In the end, our clients receive advice, results and most importantly, a process and team that can continue drive results in the future.

Please let us hear about your thoughts and experiences with consulting engagements.

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