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ISM Article

Managed Services: Should I Build or Partner?

11 Oct, 2011 By: Editorial Staff imageSource

You will hear this type of statement from office equipment dealers who recognize their predicament, including successful ones. However, one overly concerned dealer mentioned that he was dreading partnering with one of the local resources that they don’t know 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 revolves around IT technologies and managed services today.

Customers, particularly small and medium-sized businesses (SMBs), love having a single-source provider – 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 – those being:

  • 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 – For many dealerships, their current area of expertise!

SMBs want a trusted business technology advisor. If their printer stops working, they wanted if fixed. They don’t want to call you to come in only to find out it isn’t a printer issue but a network issue…Then call that 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 why shouldn’t you be the first and ONLY provider they turn to? Why not own the complete solution? Don’t just retain your customers – why not grow a recurring revenue stream from your existing customer base?

The Build vs. Partner Options

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. 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.

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” to a more proactive, managed one.

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.

Not Building? 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. Get referrals. A company such as The Utility Company (theutilitycompany.com) can provide services.

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