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Improve Your Odds: Know 5 Top Reasons Why Managed Services Fail

31 Mar, 2014 By: Eric Stavola, MSCIS,MCSE,MCSA,N+,CDIA+

Over the last two years, one of the most talked about services in our industry is Managed IT Services. It seems like everywhere I go, I hear about the initiatives in managed services or “MITS.” From industry conventions to “IT” expos, it seems to be a main topic of discussion.

Yet…when I get around a round table of peers and business owners, a majority of them say that they have, or are now, struggling with getting their managed services off the ground. Almost all have admitted that selling and developing managed services has been harder than expected.

Thus I thought it might be helpful to cite what I see as the top 5 reasons why managed services fail:

Defining Managed IT Services

Since managed services can cover a broad area, for the purpose of this article let’s define Managed IT Services (MITS) as the practice of outsourcing day-to-day IT operations to a service provider as a strategic method for improving operations and cutting expenses. An example of such IT services could include:

• User and desktop support, patch management

• Emergency infrastructure support

• Proactive maintenance

• Security and risk management

• Business continuity management

• Hardware as a Service (HaaS)

Why Managed IT Services Fail

  1. Different Business Model:

No matter how one looks at it, selling IT services and especially managed IT services is a different business model than that of the typical copier company. While they have some similarities, such as re-occurring revenues and B2B sales, they are very different when rolling out.

Key Points to Consider:

  • Get C-level commitment – generate a 2-3 year business plan. Stay consistent and evaluate key benchmarks; this will allow you to see progress even when profits might not be showing it yet.
  • Outsource to start – learn from others/experts who already do this. You may initially lose a few up front customers or profits (due to costs); however, the valuable information and “knowledge share” they bring will make up for that in no time, until you feel, as a company, comfortable enough to venture off on your own.


  1. Lack of key Personnel, Roles & Responsibilities:

I have seen far too many companies launch IT services and managed services offerings thinking they can support it with their existing technicians. It is clear to me that many companies truly lack the understanding of the key roles and responsibilities needed to support these types of offerings.

Key Points to Consider:

  • Have a dedicated pre-sales engineer - to support your sales staff. A good one can support a ratio of 15 reps to one pre-sales engineer. This individual will run sales calls and handle all pre-sales demonstrations. This individual should be able to write a scope of work and be able to not only talk it but walk it as well, as far as technical skill-sets go.
  • Have a dedicated post-sales engineer - to support your ongoing customers and to deliver on installations. This individual will handle main helpdesk operations and remote support efforts.

 3.  Poor or confusing service offering packages:  
One should not need a lot of help or “IT certification” to understand your packages and offerings. If it’s too complicated, the key decision makers that we are selling will have no idea what we are selling. Thus use the “Kiss” rule here: Keep it Simple Stupid.

Key Point to Consider:

  • Create 3 basic packages with a monthly fee associated with them:
    • Workstation Management
    • Server Management
    • Network Management
  • Market understandable “non-techie” support:
    • Proactive 24/7 Monitoring
    • Accountability for Your Business IT
    • End to End Support for Your Staff


  1. Not investing in the technology infrastructure:

If you are going to play in this field then you need to invest in the technology infrastructure to support your future clients.

Key Point to Consider:

  • Some of the key essentials infrastructure needs as follows:
    • Helpdesk Ticketing system
    • Remote Support
    • Monitoring and Patch Management Tools


  1. Have dedicated sales staff that can sell IT:

Have a dedicated sales staff to sell this new offering. Trying to train your existing staff will only be a distraction and lead to a lot of headaches, non-effective training sessions, and decline of hardware sales. Remember that the concept of IT Services became a must in efforts to retain customers and gain more wallet share from current customer bases.


Key Point to Consider:

  • Selling IT services can't simply be sold and left behind with limited support.
  • Train sales staff in how to convince customers of the potential business value of their offerings.


Eric Stavola, M.ED, MS.CIS, MCSE, MCSA, CDIA+, N+, is Chief Operating Officer at WITT-COMPANY. Contact him at: (619) 379-3009 Cell / Fax (888) 511-0741 / Email estavola@witt-company.com

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