Often entrepreneurs try to run their business completely on their own. This certainly has it’s merits in the early going of any business but you are fooling yourself if you think it is scalable.

You must invest in infrastructure and administrative help and you must build these costs into your model.

I have seen more and more companies utilizing virtual assistants to help them make the transition from doing everything on their own to hiring full time help.

“A Virtual Assistant (VA) is an independent entrepreneur providing administrative, creative and/or technical services. Utilizing advanced technological modes of communication and data delivery, a professional VA assists clients in his/her area of expertise from his/her own office on a contractual basis.”

No matter what path you take the sooner you acknowledge that you cannot do everything needed to run the business yourself if you are going to have any chance of growing the sooner you will start to grow.

We are at the point where we have a number employees dedicated to running the business so that Mike can spend time working on the business as Michael Gerber says.

I would love to know how you are making the transition from doing everything to putting people in processes in place that will allow you to scale.

Josh

I pulled the paragraph below from a letter from Michael Dell talking about the initiative and the commitment behind it. I have no doubt that Dell can make it happen and look forward to seeing what it does to our industry and to business around the globe.

Josh

Committing on World Environment Day to make Dell the
greenest technology company on the planet. More than ever
before, we are integrating consideration of the environment
into our business processes and product design to deliver the
industry’s most energy-efficient products, save energy and
deploy green power at our own facilities, and maintain our
recycling leadership. We know that people of all ages around
the globe who care about protecting the Earth expect no less.

Link to the full document outlining the initiative

A variety of vendors are offering hardware as a service wrapping service around products as well as a variety of creative financing ideas.

HP has recently released two programs to help with this exact problem allowing small business customers to lease between $1,500 and $150,000 at 0%:

0% 12-month same as cash ownership – Invest in new technology while keeping the costs manageable and predictable with this 0% financing plan. At the end of your term, the equipment is all yours for one dollar.

0% 36-month lease – Does leasing make better business sense for you? This zero-percent lease provides a fair-market-value purchasing option at the end of your term.

There are restrictions on the programs but overall they are a good example of the creative ways you can keep project dollars flowing during the recession.

What other creative deals are you putting together to help your clients manage their cash?

Josh

I think this part of the interview best captures what I believe we are talking about and the shift that is already taking place for larger organizations and will soon be upon us in the managed services industry:

1. Jeff: So Casey, to start us off, BSM is often described as the ability to see and use your technology infrastructure from a business perspective, rather than tools capability. How would you expand on that basic definition to describe what we’re talking about here?

Casey: The key to BSM is aligning technology investments to business operations by being able to track, monitor, manage, and view the financial side as well as the operational side of technology. So let’s say I’m an executive who knows nothing about the underlying mechanics of the technology infrastructure — the networking equipment, the laptops, the servers — what I do need is the ability to look at how those components and infrastructure are enabling and supporting my ongoing business processes.

2. Jeff: From an executive standpoint, then, it really comes down to minimizing or even making invisible the functional processes of the technology and focusing on what IT does in a business capacity?

Casey: Right. That is really the lynchpin and it’s also the key challenge — so that the executive can understand what the technology is doing without necessarily understanding all about the underlying technology itself. Most important, so that the executive can make informed business decisions, given that so much of today’s business operations are intertwined with the operation of the underlying technology.

If you want to read the complete article you can find it here 

I know we are mapping out our plans to eliminate technology speak and transitioning more to business value. What are you doing to get ready for the transition?

JC

http://www.cymphonix.com

http://www.untangle.com

Let me know your thoughts and as always feel free to email me directly if you prefer a private conversation: jclifford@everonit.com

JC

So what’s the big deal? Great question and one that I think many MSPs as well as some of the big dogs such as Microsoft, Dell, Rackspace, and the Planet will soon be asking themselves.

At the most basic level the new technology uses shared hardware and storage components to run virtual servers across the resources creating built in redundancy, backups, scalability, and speeds close to that of operating on bare metal. All of this is done through a drag and drop Visio like interface that allows you to map out a network in minutes that is automatically built and provisioned on the back end.

The difference between the products is simple at this point:

DaaS is hosted by Zenith in their data centers and you can resell it to your end customers branded as your product.

DCIR is hosted in your data center and give you a bit more flexibility with direct connections for clients such as MPLS or point to point lines.

Box Office is installed at the customer site and is smart client capable.

Sound too good to be true? I sure thought so but I can tell you after testing their beta product and getting a chance to see under the hood it is for real and it is a game changer.

HP released its Single Box Networking earlier this month and if you thought that had potential this Zenith offering blows is away.

I don’t expect anyone to have the answers yet but a question we are asking is how does this product, and others that will follow, change our business?

Overnight we can compete with the data centers that have spend countless dollars building out their infrastructure and even have an advantage as they take time to strip away the inherent cost built into their model, but is that the best move.

Immediately we will be able to provide a higher level of service to our customers with reduced management costs creating better margins in our business, but will they care.

We think this technology and technologies like it will level the technology playing field for small businesses, simplify everything and put a large portion of people in our industry out of business. Technology will become about driving business efficiencies and productivity rather than working about the plumbing of the business.

The key to survival in our mind as this change takes place is sales and marketing. Create a strong brand, be the trusted adviser for the client, and control where their dollars are spent in this new world. I know this doesn’t sound much different than the Managed Service pitch but the major difference is that you will not be pitching IT service and support you will need a product that speaks to a business owners needs in order to get through the door. All of the plumbing will be taken care of with a Box Office.

We are working to figure out what these products are and will be over the coming quarter and would love to get input from the community weather you have seen the new Zenith products or not.

The first example of this new type of product that is higher up the stack is Everon Integrated Web Services

This new service allows us to have a completely different conversation with a business owner; “let me work with you to drive leads and ultimately revenue to your business Mr client, I am going to help you find your next customer with my service and I will also take care of all the plumbing that things need to run on.” That sure changes the conversation from what it was a year ago; “We can more effectively manage and maintain your IT infrastructure while providing your strategic advice on where to spend your IT dollars.”

Who would you rather talk to?

JC

During the past three years we have seen a steady proliferation of managed services in this market, and the pace of adoption is accelerating. The growth has been driven by an increase in the number of solution providers getting into the game for the first, as well as from established players increasing the percentage of MSP offerings in their IT services portfolio.

With 20,000 solution providers using our software, we have a bird’s eye view of this trend – measurable both by the percentage of customers who ask us to turn on our MSP extensions that link Autotask with the managed services vendors – including Kaseya, Level Platforms, N-able, Zenith and others – and also through direct polls we take through the Autotask CommunITy built-into our software. The last poll we ran just a few weeks ago revealed that fully 95% of our customers now say that at least 10% of their revenue is coming from a recurring managed IT service… And more than 1/3 of them say they derive more than half of their revenue through Managed Services.

We’re also seeing a new wave of Master MSPs who are making it even easier to get into the game, by offering up turn-key managed services that solution providers can simply resell to their customers. Zenith Infotech jumped into the game early, offering up a virtual NOC, and then Ingram Micro added momentum with its Seismic Offering. Then, Amy Luby’s MSPSN, Do IT Smarter, the Utility Company and a dozen other smaller players began to aggregate basic services, including virtual help desk, patch management, and monitoring – becoming the secret “back-end” delivery mechanism for hundreds of smaller VARs wanting to get into the MSP game without the big investment. Now the likes of NetEnrich and Dell are getting into the game.

What’s wrong with this picture? To put it simply, managed services delivery is entering the mainstream of our business, and the impact is going to be a steady increase in competition and a commoditization of many of the services in your portfolio.

Not only are most solution providers now offering the same suite of services to small and medium sized businesses – many of them are buying and reselling those services from the exact same sources and/or using the exact same managed services platforms to deliver them.

That’s why VARs and MSPs that want to continue being paid at a premium for the services they provide, must find ways to differentiate their business and collaborate with partners who can enhance their offerings and help deliver superior customer service.

We faced the exact same dilemma 15 years ago with the commoditization of computer hardware and software. Resellers had traditionally made most of their money on the healthy margins they realized on the equipment they purchased for their customers. Then, the basic computer networking technology became so pervasive, with so many vendors, that prices dropped, margins evaporated, and Resellers turned to services to make their money – becoming not just computer resellers, but VALUE-ADDED resellers.

That was then. But now that the services you are delivering are becoming commoditized, what is your “value-add” going to be? Are you going to be able to win new customers – and make a profit from your current customers – when everyone is out there offering up network management at $X/month per PC, and $Y/month per server – and each provider throwing something else into the mix, or lowering the price by another $1 a month, just to beat the next guy’s plan?

Now, I’m not suggesting that we’ve gotten to the point where you can’t make money in Managed Services today. But it’s going to get increasingly difficult to make a profit at it, as prices continue to drop, more services get bundled in, and your labor costs continue to rise.

The solution providers who are going to come out on top, in my view, are the ones who develop a clearly identified specialty – either in a proprietary business solution, or in one or more narrow vertical niches that they can establish themselves as “the technology gurus” within their areas of specialty.

The successful solution providers of tomorrow will use Managed Services delivery as a MEANS to their ends, not the end itself — whether delivered by their own staff or through outsourcing to others. The successful MSPs will be the ones who are rigorous about they way they collect and manage the information about their clients’ businesses – not just in terms of the data being generated through their monitoring systems, but data related to the quality of their service delivery.

They will use this data both to regularly justify the value of the services they have already delivered, and to identify new opportunities for selling higher-margin technology services and solutions to their clients.

Raintoday.com, one of my favorite resources for learning sales and marketing strategies, is work with GoToAssist to provide a complimentary webinar to provide tips on how to bring your utilization numbers up while delivering outstanding service.

We’ve used GoToAssist at Everon for years…we love it.

Check it out.  Increase your utilization.  Make more money.

Nice!

MRC

The challenge you face is that this is a brand new relationship and if you do not walk the client through why these technologies are important to their business they will feel you believe they are a blank check book and are trying to just “sell” them something.

You need to create standards that your business adheres to and a process to walk all new clients through comparing their technology to these small businesses best practices. All recommendations should be in the best interest of your client while increasing the ease with which you can manage their network.

At Everon we have the added advantage when speaking with the client that we are not a project organization (we give all our field project work to partners) so there is no financial incentive for us to put a big project on the table for a clients unless it is truly the best thing for their business.

Now I understand you are not going to dump your project services business as you transition to managed services but you need to create the conversations and the assessment processes that allow your clients to truly believe you are looking out for their business interests. In an ideal world your compensation packages would also revolve around service metrics and not sales numbers. Even though your relationship people are selling in an advisory capacity you want them to be known as the trusted advisor to the client not the sales engineer – this is when the relationship becomes powerful and it all starts with getting the initial technology assessment and feedback conversation right.

JC

Now the trick is to determine which one(s) to target.

One of the biggest mistakes we make in our industry is trying to be all things to all people; you eventually become nothing to nobody!  That may not be proper grammar, but I don’t care.

The point is still a good one – pick a target customer and make sure your service offerings are a nearly exact match for their needs.  You can do this by focusing on one or several of the following factors:

• Customer size
• Industry vertical
• Specific technology needs
• Location

And I’m sure there are others.  At Everon, we’ve never focused on a specific industry vertical, although I do believe that it’s probably the best strategy to grow your business quickly and with fat margins.  I’ve got one friend in the industry focused on smaller medical offices that is killing it.

Even if you don’t pick an industry vertical, you absolutely MUST pick which customer size you are going to focus on IF YOU WANT TO BUILD A SCALEABLE BUSINESS.

Why is size so important?

Because the service processes needed to serve each is dramatically different from one to the other.  Large companies needs tons of process, small companies need tons of personality, and medium-sized companies need a good combination of the two.

Most people think I’m crazy when I tell them that they should turn down large business opportunities if they fall outside of your target segment, but you should (or change your target).  Becoming a slave to a large revenue customer will destroy your service processes for your other clients, and will ultimately destroy your business unless you’ve found a way to land a ton of these larger clients.

Pick a specific target market and focus like hell!

MRC