Evolving Managed Services: Better to Build or Partner?31 May, 2012
The office technology “industry” keeps evolving; MPS, MNS/MS included. Many providers are wondering how to move forward and at what cost. Bottom line is, you need to provide multi-services to your customers, but how best that is profitable to them and you. Many dealers say, “I am in the services business but am falling behind the curve by not currently providing complete Information Technology (IT) so I need to move quickly to remedy our company’s shortcomings.” And before that business is lost to another resource entirely.
Besides needing a capable outside consultant to assess if you even have the capability or it is in your best interest; or on what level, you need to do some homework; listen to others in the niche you’re interested in; read industry analyst reports for insight, talk to your customers to learn their needs.
An overly concerned dealer once mentioned that he was dreading partnering with one of the local resources that they don’t know all that well, just to be in the game. Why would someone who is already doing well say such a thing? Because they see much of their future could revolve around IT technologies and managed services today.
It’s not a mystery that most customers, particularly small and medium-sized businesses (SMBs), appreciate having a single-source provider to trust– a ‘one-stop shop’ or single number to call when issues arise. Right now, the average SMB has to deal with 4.1 suppliers to maintain the 5 areas of technology they use daily:
• Information Technology (IT) – infrastructure such as networks, desktops, security, storage
• Business Applications – Off-the-shelf, custom-built or Line of Business software
• Telecommunications – Telephony, cabling, installations, Voice-over-IP solutions, etc.
• Website / Internet – Website design, maintenance, development, e-commerce, connectivity, etc.
• Copier / Printer hardware & supplies – no explanation needed
Typically, SMBs want a trusted business technology advisor. If their printer stops working, they want it fixed. They (and you) don’t want a call to your service department to come out to only find it isn’t a printer issue after all but a network issue. And if you can’t fix that have to call another provider only to find out it’s actually a connectivity issue with their ISP, etc. They want to print - not have one call become four in trying to get a problem solved. So you think, yeah, why shouldn’t you be the first and ONLY provider they turn to?
The Options: Build vs. Partner
In order to provide IT services, you need to add-on to your existing business. This means buying tools (called managed services software), hiring on-site technical support personnel, setting up a proactive infrastructure monitoring & management center (called a network operations center or NOC) and re-training your existing sales and support staff. Sound easy? Nope. It isn’t. First seen in 2000, managed services was introduced to the SMB solution provider community and has since seen increasing adoption as a means to increase profitability, revenue, cash flow and ultimately business value. As easy as this statement is to make though, achieving on the promises of managed services has been much more elusive.
The SMB market (5-100 users) is the most difficult segment to target. They may have similar technology needs (in most cases) but they generally have a very limited knowledge of what is available to them in terms of IT services. They are used to a traditional model of buying equipment and software as they need it, from wherever, and then getting whomever is available to fix any problems as they come along. That’s not to say they don’t have a NEED for managed services or that they wouldn’t benefit from them, they just don’t have the understanding that these services are now available to them and are an affordable reality. So the average SMB needs something to help them “cross the chasm” from their traditional view of ‘break/fix’ technology consumption to a more proactive, managed one. They need education and a simple ‘baby-step’ to help them take that leap.
What does that mean for you as a dealer? How can you make managed services a viable part of your existing business? First you need to have corporate buy-in from the beginning. This means having the proper organizational structure with the right people in the right jobs with dedicated roles, performance expectations/targets and defined activities. It also means either training or hiring additional salespeople and service technicians who will understand the growing role of technology to your organization. And, of course, it also means new compensation models for your team so the value of the new services, and the recurring revenue they bring, is promoted internally.
Rather Not Build? How Should I Partner?
"I already have a service business...why would I partner for managed services?" you might ask. The answers are simple: Time and money. By investing in a "business-in-a-box" designed to plug into your existing business, you will save the time and expense (and heartache) of trying to build a managed IT service solution yourself.
Look for a good service provider to partner with to compliment your business. Investigate and get referrals. Consider a company such as The Utility Company (http://www.theutilitycompany.com) that can provide many good services and alternatives for office equipment dealers. Now is the time to learn about proven operating systems that will offer a resource for IT / Managed Services to compliment and broaden the scope of your business offerings.