Much has been written and taught about the “holy grail” of IT service providers — to become your clients’ “Trusted Technology Advisor.” But don’t stop there. The next logical step is to become your customers’ Embedded Technology Advisor. Here’s why.
The goal is to move your status beyond being simply a vendor or supplier of the IT products and services that your clients require. Instead, you want to be positioned as a party to – and influencer over – your clients’ IT product and service purchasing decisions. It also means that even if you don’t always walk out of those meetings as the primary supplier, you may have control over who does get the business… and an opportunity to manage the implementation.
While it is critical to earn the trust of your clients to provide them with the best advice on technology matters that impact their business, there’s an equally-important and often over-looked aspect of this challenge. You need to “be there” when the decisions are being made.
As the old saying goes, “Out of sight, out of mind.”, and with advent of managed service contracts and remote monitoring and management tools, more and more IT services are delivered virtually, with little or no personal interaction. Add the proliferation of e-commerce sites and electronic purchasing portals and it is easier than ever for your clients to go around you and buy their products on-line.
So, while your clients may well value your input and take your advice and recommendations when you are involved with IT purchase decisions, with the rapid pace of business these days they may often forget to consult with you, or those decisions may be delegated to someone in the company with whom you have little to no direct interaction.
The Next Big Switch
That’s why I think it’s critical for you to be your clients “Embedded” Technology Advisor, not just their “Trusted” Technology Advisor.
To be clear, when I say “embedded,” I mean working with your clients to deploy technologies that actually put you in direct control over their technology purchases, or to become the “channel” through which their product and services transactions take place.
That’s the primary reason we began rolling out our Taskfire co-managed service desk last year, and why, earlier this year, Autotask purchased VARStreet — the hosted technology products procurement platform. These two products are examples of enabling technologies that literally “embed” your company inside your client’s technology purchasing apparatus.
With VARStreet, for example, you can work with your clients’ management teams to establish pre-set guidelines on the specific types of products and technologies they plan to purchase (which you can then service and support). You can easily create and provide a unique and private technology purchase portal for that client, with just the products that are right for that client, at price margins that you have pre-negotiated. You can even include your own products and service bundles. And from there, the entire quote-to-bill cycle is automated.
As an example of “embedding” on the service side, Taskfire allows you to deploy a hosted IT service desk solution to your clients that is directly linked to your own service desk. You configure the clients’ system based on the level of internal IT resources they may have. You set it up very simply, with all client issues flowing through an internal office manager or “gatekeeper” before they come to you, or in a highly sophisticated “co-managed” services arrangement, tickets can be automatically or manually distributed between the client’s internal resources and yours. In either case, you are supplying the platform through which all IT services are being rendered, giving you 100% visibility into your clients’ service-related activities and opportunities.
If you are already the Trusted Technology Advisor for your clients, you’ve accomplished the hard part. But to truly leverage that relationship, start using the tools available today to get yourself “embedded” in your clients’ businesses.
Thursday, June 10, 2010
Monday, May 10, 2010
Automate to Achieve the Ideal Hybrid IT Business Model
For years the prevailing wisdom has been for IT solution providers to focus less on moving products, and more toward a business model built primarily on services delivery. The conventional thinking was that product sales involve too much work for too little margin, while services allow for more predictable and stable recurring revenue.
While this is true, there are downsides to a strict focus on services. Three important ones come to mind:
1. Limits on scalability.
Providing services is labor-intensive. A given engineer, tech or help desk operator has only so many hours in a day. That’s why Autotask has become so popular among IT service companies. Our software streamlines service delivery workflow, and automates as many tasks as possible to maximize resource productivity. But at the end of the day, once you are getting the most productivity out of each service resource, the only real way to significantly grow the business is to add and manage more staff.
2. Less control over the client product-purchase decisions.
By definition, IT services are attached, or related, to IT products. And virtually all of these products have a limited shelf-life before they become obsolete, non-functional, or used up. From servers to routers, from laptops to printers, and the supplies, accessories and consumables that go along with them – your customers are constantly in need of, and buying , more IT products. If you focus too heavily on the service side, you run the risk of reducing your overall impact on – and input into – the other IT purchase decisions your customer make every month—and that can impact your ability to provide the related services.
3. Loss of share of your clients’ IT spending.
Even when you’re responsible for making IT product recommendations to your customers, if they’re not actually buying the products from you, that revenue is going elsewhere AND it creates an opportunity for your competitors – from other local VARs to online IT megastores to your local office products retailer – to bundle in services along with the product sale. This includes warranty contracts, maintenance agreements, and even repair or service work.
The Profit Implications of Different Business Models
But perhaps the biggest reason to revisit the product sale side of your business is the overall impact that a balanced Product/Service Hybrid business model has on your company profits. According to current industry data from Everything Channel’s IPED Channel Research, the Hybrid business model is clearly the most profitable compared to the Product-Focused, and Service-Focused models. Let’s compare the three:
Product-Focused Businesses
A typical mid-sized IT business with a product-centric focus captures gross revenue of $15-50MM, but because margins are so low, they typically net in the range of $500,000 profit – a net income of 1-4%. This is your basic, high-volume, low-margin business.
The takeaway: Businesses with the highest mix of product-based revenue tend to be the largest, but have the lowest margin percentages
Service-Focused Businesses
The average service-centric MSP will generate significantly lower top-end than a product-focused company, in the range of $1-5MM, but, because their margins are so high (typically 30-50%), they generate higher profit ($600,000), and a higher net income of 15-25%.
The takeaway: Businesses with the highest mix of service-based revenue tend to have the highest margin percentages, but, because they are difficult to scale, tend be the smallest.
Hybrid Product-Services Model
IT solution providers who balance their revenue by meeting their clients’ services and product needs create $10-20MM revenue with gross margins of 20-30%, on average. But, because they leverage the best of both models from within and across the same client base, their bottom-line profit is considerably higher at $2.25MM.
The takeaway: Businesses with a nearly even mix of product-based and service-based revenue tend to have high margins (though not the highest) and be larger (though not the largest), and yield the highest overall level of total financial performance.
The following charts illustrate these findings:
Overcoming the Biggest Hurdle to Profitable Product Sales
This is all great in theory, but here’s the big challenge: Without the right tools to automate the quoting and procurement process, selling products is very time-consuming, often sapping sales and service time and resources that could be applied more profitably elsewhere.
That’s why we’ve added VARStreet to our product line. This affordable hosted technology is designed specifically to drive the cost out of the IT product sales process, and give you the tools you need to build a healthy product-service hybrid IT business.
By automating both the product sales component of your business, and the services delivery components, you’ll maximize the total financial performance of your business, and get the best total return at the lowest overall cost per customer. Not just higher margins or higher revenue … but the best possible combination of both.
While this is true, there are downsides to a strict focus on services. Three important ones come to mind:
1. Limits on scalability.
Providing services is labor-intensive. A given engineer, tech or help desk operator has only so many hours in a day. That’s why Autotask has become so popular among IT service companies. Our software streamlines service delivery workflow, and automates as many tasks as possible to maximize resource productivity. But at the end of the day, once you are getting the most productivity out of each service resource, the only real way to significantly grow the business is to add and manage more staff.
2. Less control over the client product-purchase decisions.
By definition, IT services are attached, or related, to IT products. And virtually all of these products have a limited shelf-life before they become obsolete, non-functional, or used up. From servers to routers, from laptops to printers, and the supplies, accessories and consumables that go along with them – your customers are constantly in need of, and buying , more IT products. If you focus too heavily on the service side, you run the risk of reducing your overall impact on – and input into – the other IT purchase decisions your customer make every month—and that can impact your ability to provide the related services.
3. Loss of share of your clients’ IT spending.
Even when you’re responsible for making IT product recommendations to your customers, if they’re not actually buying the products from you, that revenue is going elsewhere AND it creates an opportunity for your competitors – from other local VARs to online IT megastores to your local office products retailer – to bundle in services along with the product sale. This includes warranty contracts, maintenance agreements, and even repair or service work.
The Profit Implications of Different Business Models
But perhaps the biggest reason to revisit the product sale side of your business is the overall impact that a balanced Product/Service Hybrid business model has on your company profits. According to current industry data from Everything Channel’s IPED Channel Research, the Hybrid business model is clearly the most profitable compared to the Product-Focused, and Service-Focused models. Let’s compare the three:
Product-Focused Businesses
A typical mid-sized IT business with a product-centric focus captures gross revenue of $15-50MM, but because margins are so low, they typically net in the range of $500,000 profit – a net income of 1-4%. This is your basic, high-volume, low-margin business.
The takeaway: Businesses with the highest mix of product-based revenue tend to be the largest, but have the lowest margin percentages
Service-Focused Businesses
The average service-centric MSP will generate significantly lower top-end than a product-focused company, in the range of $1-5MM, but, because their margins are so high (typically 30-50%), they generate higher profit ($600,000), and a higher net income of 15-25%.
The takeaway: Businesses with the highest mix of service-based revenue tend to have the highest margin percentages, but, because they are difficult to scale, tend be the smallest.
Hybrid Product-Services Model
IT solution providers who balance their revenue by meeting their clients’ services and product needs create $10-20MM revenue with gross margins of 20-30%, on average. But, because they leverage the best of both models from within and across the same client base, their bottom-line profit is considerably higher at $2.25MM.
The takeaway: Businesses with a nearly even mix of product-based and service-based revenue tend to have high margins (though not the highest) and be larger (though not the largest), and yield the highest overall level of total financial performance.
The following charts illustrate these findings:
Overcoming the Biggest Hurdle to Profitable Product Sales
This is all great in theory, but here’s the big challenge: Without the right tools to automate the quoting and procurement process, selling products is very time-consuming, often sapping sales and service time and resources that could be applied more profitably elsewhere.
That’s why we’ve added VARStreet to our product line. This affordable hosted technology is designed specifically to drive the cost out of the IT product sales process, and give you the tools you need to build a healthy product-service hybrid IT business.
By automating both the product sales component of your business, and the services delivery components, you’ll maximize the total financial performance of your business, and get the best total return at the lowest overall cost per customer. Not just higher margins or higher revenue … but the best possible combination of both.
Tuesday, April 6, 2010
Selling Products Along with Your Services, Profitably
Like it or not, products are an integral (and important) part of any IT Service business. Product sales and services sales go hand-in-hand, drive each the other, and produce a whole that is much bigger than the sum of the parts. With the latest product and services automation tools available today, if you’re not realizing a healthy balance of product and services revenue you’re likely leaving serious money on the table, and setting yourself up for erosion of your existing customer base.
Here’s why…
Back to the Future: A bit of VAR History
The term VAR (Value-Added-Reseller) came about as an evolution of the pure product dealer or reseller, who could make enough money on the margins they got pushing hardware for the large product vendors they represented. As margins got smaller and products got more commoditized, the dealer/reseller started to “add value” by either bundling together several products – often from a variety of vendors – to create so-called turnkey “solutions” and/or services combined with the product – such as training and implementation.
With the proliferation of more complex networks and systems, the break-fix repair and maintenance services side of the business expanded, and with the advent of Remote Monitoring and Management (RMM) tools, the Managed Services business model evolved, moving many VARs into an almost pure services business model, positioning themselves as “trusted technology advisors.” IT “consultants” now abound, and many firms have completely given up on the product sale: “I’ll tell you what to buy, Mr. Client… then you can go out and get it from someone else.”
Don’t Change Your Business Model – Use Today’s Technology To Expand IT!
That’s all well and good, and you certainly should NOT think about changing a successful business model that is working for you. But here are some things to consider in evaluating potential big opportunities that you may be missing:
1. Product Sales Drive More Services Sales. You may or may not be making big margins on product sales today, but there are a variety of services and accessories/upgrades that can be attached to a product at the time of the sale – configuration and installation, training, warranties, etc. – that could make the transaction more profitable. Today’s IT Business Management tools will automate the process of up-selling and cross-selling, and produce reminders when products are nearing their end-of-life timeframes.
2. Services Drive More Product Sales. MSPs who know what they are doing are in a prime position to move A LOT of hardware. Let’s face it, you are on the front lines of your clients’ networks and you see what hardware and software is missing or inadequate for you clients’ operations. And, you are the resource to replace the items that fail and need immediate replacement. You are in close contact with your client and their business operations, and are in the perfect position to recommend for them future major technology projects.
What’s more, you have the opportunity to offer and deliver the consumables and supplies that often carry a nice annuity for certain types of technology products. Today’s Back-Office Quoting and Automated Procurement software can get you in the game for all these things.
3. The Opportunity for NEW Revenue. Admit it. Your customers are already going online to buy technology products from someone else, but with today’s technology, there’s no reason you can’t make it just as easy to buy the exact same products from you – at the exact same costs (maybe even lower) – and still make money.
That’s because there are hosted e-Commerce tools designed specifically for IT resellers. The best ones will give you total control over the products and prices that show up in your quotes or in your online store, include tools to automatically pull the best pricing from multiple distributors and let you set up different pricing and products for different customers.
Find a solution with built in tools that automatically recommend accessories and companion products or push close outs and specials and you can drive incremental sales without involving a dedicated salesperson or other resources. In fact, with the right purpose-built e-commerce solution you can make margin even on low cost items because the transactions can be automatically processed, end-to-end, with little to no intervention.
So, spend some time looking at your own business. Have you reduced the product side to making recommendations to clients, or can you bring some of that business back inside? If you abandoned the product side because costs were high and margins low, today’s e-commerce automation tools might just change that equation for you.
Here’s why…
Back to the Future: A bit of VAR History
The term VAR (Value-Added-Reseller) came about as an evolution of the pure product dealer or reseller, who could make enough money on the margins they got pushing hardware for the large product vendors they represented. As margins got smaller and products got more commoditized, the dealer/reseller started to “add value” by either bundling together several products – often from a variety of vendors – to create so-called turnkey “solutions” and/or services combined with the product – such as training and implementation.
With the proliferation of more complex networks and systems, the break-fix repair and maintenance services side of the business expanded, and with the advent of Remote Monitoring and Management (RMM) tools, the Managed Services business model evolved, moving many VARs into an almost pure services business model, positioning themselves as “trusted technology advisors.” IT “consultants” now abound, and many firms have completely given up on the product sale: “I’ll tell you what to buy, Mr. Client… then you can go out and get it from someone else.”
Don’t Change Your Business Model – Use Today’s Technology To Expand IT!
That’s all well and good, and you certainly should NOT think about changing a successful business model that is working for you. But here are some things to consider in evaluating potential big opportunities that you may be missing:
1. Product Sales Drive More Services Sales. You may or may not be making big margins on product sales today, but there are a variety of services and accessories/upgrades that can be attached to a product at the time of the sale – configuration and installation, training, warranties, etc. – that could make the transaction more profitable. Today’s IT Business Management tools will automate the process of up-selling and cross-selling, and produce reminders when products are nearing their end-of-life timeframes.
2. Services Drive More Product Sales. MSPs who know what they are doing are in a prime position to move A LOT of hardware. Let’s face it, you are on the front lines of your clients’ networks and you see what hardware and software is missing or inadequate for you clients’ operations. And, you are the resource to replace the items that fail and need immediate replacement. You are in close contact with your client and their business operations, and are in the perfect position to recommend for them future major technology projects.
What’s more, you have the opportunity to offer and deliver the consumables and supplies that often carry a nice annuity for certain types of technology products. Today’s Back-Office Quoting and Automated Procurement software can get you in the game for all these things.
3. The Opportunity for NEW Revenue. Admit it. Your customers are already going online to buy technology products from someone else, but with today’s technology, there’s no reason you can’t make it just as easy to buy the exact same products from you – at the exact same costs (maybe even lower) – and still make money.
That’s because there are hosted e-Commerce tools designed specifically for IT resellers. The best ones will give you total control over the products and prices that show up in your quotes or in your online store, include tools to automatically pull the best pricing from multiple distributors and let you set up different pricing and products for different customers.
Find a solution with built in tools that automatically recommend accessories and companion products or push close outs and specials and you can drive incremental sales without involving a dedicated salesperson or other resources. In fact, with the right purpose-built e-commerce solution you can make margin even on low cost items because the transactions can be automatically processed, end-to-end, with little to no intervention.
So, spend some time looking at your own business. Have you reduced the product side to making recommendations to clients, or can you bring some of that business back inside? If you abandoned the product side because costs were high and margins low, today’s e-commerce automation tools might just change that equation for you.
Monday, March 8, 2010
MSPs: Reinvention Once Again Is the Key to Success
In today’s fast-paced world of technology, new IT issues — and new solutions — can arise in the blink of an eye. This poses a unique challenge for MSPs and VARs trying to stay ahead of the game while simultaneously working to contain costs and maximize ROI. After all, if you can’t or don’t evolve with ongoing service advancements you will quickly begin to lose customers to those competitors who continually find ways to reinvent themselves. So, what’s your next move? Here’s some guidance.
Before you begin to consider specific internal improvements you could make, ask yourself these broad questions:
Fortunately, new enabling technologies make it easier and more cost effective than ever to network your IT ecosystem together – with you as the center hub of connections among your partners, vendors, clients and beyond – and ensure you remain the trusted technology advisor and focal point for all technology-related purchases.
For example, new solutions let you provide clients access to their own, cloud-based system to identify, triage and manage the IT issues they prefer to handle internally – and escalate or outsource the work they can’t do, or choose not to do, directly to you. These systems not only provide clients with a valuable tool to increase their in-house efficiencies, they help forge a deeper relationship between you and your clients and reinforce your position as an expert resource.
In fact, one of our customers who tried this approach told us that they were able to exponentially expand their client’s IT service capability. Typically their clients have one onsite IT service professional who single-handedly services up to 50 desktops. Today, with our customer’s assistance, one IT contact can actually service up to 750 desktops. You can’t beat those efficiencies. And, I bet that client won’t question the value they’re receiving from this IT pro.
So, consider partnering with your clients to give them something they never even thought was possible, a complete solution to the service demands placed on their internal organization – and instant access to a trusted resource that can fill in at a moment’s notice. You.
It doesn’t get more inventive than that.
Before you begin to consider specific internal improvements you could make, ask yourself these broad questions:
- How deeply ‘connected’ with your clients are you?
- Do your clients routinely call on you as a trusted advisor?
- Are your clients likely to build up their internal IT resources as their needs increase?
Fortunately, new enabling technologies make it easier and more cost effective than ever to network your IT ecosystem together – with you as the center hub of connections among your partners, vendors, clients and beyond – and ensure you remain the trusted technology advisor and focal point for all technology-related purchases.
For example, new solutions let you provide clients access to their own, cloud-based system to identify, triage and manage the IT issues they prefer to handle internally – and escalate or outsource the work they can’t do, or choose not to do, directly to you. These systems not only provide clients with a valuable tool to increase their in-house efficiencies, they help forge a deeper relationship between you and your clients and reinforce your position as an expert resource.
In fact, one of our customers who tried this approach told us that they were able to exponentially expand their client’s IT service capability. Typically their clients have one onsite IT service professional who single-handedly services up to 50 desktops. Today, with our customer’s assistance, one IT contact can actually service up to 750 desktops. You can’t beat those efficiencies. And, I bet that client won’t question the value they’re receiving from this IT pro.
So, consider partnering with your clients to give them something they never even thought was possible, a complete solution to the service demands placed on their internal organization – and instant access to a trusted resource that can fill in at a moment’s notice. You.
It doesn’t get more inventive than that.
Thursday, February 4, 2010
Increasing Business Efficiency: Nine Questions You Need to Ask
To follow the ideas I presented in my January blog post, Getting Ready for the Rebound, we’re all looking to do more with less in 2010. That’s easy to say, but executing the concept in your day-to-day-operations can be a challenge. Here are nine questions you need to consider as you strive to make your business more efficient.
“Cost-cutting” is the obvious first step. And, in some respects is the easiest path. But that could also start you on a downward spiral that will force you to continue to shrink your business to the point where it becomes non-viable.
Growth-minded companies need to find effective ways to accelerate their businesses. Leaders and top managers need to assess their resources and ask themselves, “How much better could we be using the resources we have today?” And, “What tools do I need to get the job done better and faster?” Key areas to look at are improved efficiency and process automation — two paths to long-term gains in productivity and improved bottom-line operating income.
Nine Questions to Help You Retool
That’s why IT service organizations can benefit from the same concept of “retooling” used by manufacturing companies for their factories. For IT service providers, retooling means first taking a hard look at the processes you have in place for selling, implementing, delivering and billing your IT services and products. Then, isolate and correct any productivity leaks or gaps. Unless you consider your “whole” business (products and services), you’ll likely miss critical areas that could be draining your cash flow and the productivity of your staff.
Here are nine areas you should consider:
- How is your sales pipeline being nurtured? Do you have a reliable system for tracking your prospects right through the final sale?
- How much effort does it take your team to protect customer retention through regular, ongoing communication with current clients?
- How many hours – or days – does it take to gather the information and work details you need to properly bill your clients?
- How much of your staff’s work goes unbilled because it was never tracked or captured anywhere?
- Do you have automated systems in place to track and manage your vendor, distributor, customer and employee communications?
- How many steps are involved in onboarding a new inventory item, assigning it to a client, adding the cost to a project and billing the item?
- Can you easily drill into the costs associated with selling and delivering your services, versus selling and supporting your IT products?
- How much time is wasted entering duplicate data and information into disparate point-solutions – like your CRM and billing system?
- How many extra steps do your staff have to take to make sure that an alert from an RMM tool is translated into an actionable service ticket?
Changing Times
Until recently, the largest and most sophisticated service providers were the only ones that could afford sophisticated IT service automation and business management tools.
Large companies routinely spent six figures to buy an ERP system and invested a year or more of system development and integration to fit it to their business. However, most independents and smaller shops had to manage their businesses with a variety of stand-alone spreadsheets and home-grown applications, which can sap precious internal resources to build and maintain – resources that should be directed on building and servicing your client-base.
As you know, even the smallest IT businesses have an enormous amount of complexity to manage – multiple clients, contract SLA’s, business models, vendor programs and systems. And, while it may seem okay to manage your business that way, you might be surprised at how inefficient some of these processes can be.
Make 2010 the year you take control of your company and get serious about efficiency. Take time to find a purpose-built IT business management platform that you can afford and meet your needs. Make sure that it is fully integrated and works seamlessly with the other tools you use. Find a one-stop solution that not only fits your business size, but comes with a team of professionals who are available to help — and a community of peers who have already faced some of these same challenges.
In an economic climate such as this, there is no better time to make the change, and everything to gain.
Tuesday, January 5, 2010
Get Ready for the Rebound
There’s no denying 2009 was a challenging year. Nearly everyone was forced to cut costs, streamline operations and undergo the proverbial belt tightening to stay out of the red. It wasn’t easy. Salary levels were frozen. Bonuses canceled. Furloughs mandated. And, in the worst cases, employees laid off and businesses closed.
But all the tough decisions and hard work have a pay-off – especially for VARs and MSPs who continued to invest in their businesses and proactively serviced their customers during these tough times. Those who have made it are going to enter the new decade leaner, meaner, stronger and smarter than ever before. Here are my top five strategic tips for the new year:
1. Take Stock and Invest in What You do Best – If you haven’t done so yet, examine which services and solutions produced the highest amount of sales and profit for your business in 2009, and which were losers. If you run some basic reports and crunch a few numbers around revenue minus SG&A, you might discover the three to four service offerings that made your year. But, there may also be less obvious keys to increased profitability, and that’s where your key performance metrics against industry benchmarks are so important. If you haven’t done so yet, invest in some basic benchmarking software to help you track your own business progress. At Autotask, we train every new customer how to set up a variety of executive dashboards and reports, and offer up a great little benchmarking tool for this purpose.
2. Join Forces Around the Globe – In 2009, the Managed Services industry went global in a big way – from Australia to the U.K., even Southeast Asia, we introduced the world to a whole new way to conduct IT business and grow an IT services practice. As a result, solution providers and VARs who are doing business in Asia and Europe discovered new vendors and partners to grow their revenue and expand their expertise. In fact, 'service' has become the big buzz word of the industry, so much so that even traditional IT hardware vendors have purchased big name service integrators to add to their IT solutions portfolio. How can MSPs compete? Service providers in the IT service industry have become masters in the art of partnering. Many of you have chosen IT business management systems like Autotask specifically to manage those partnerships as easily as you manage internal resources.
3. Find Ways to Get More “Sticky” With Your Clients – If all you do is offer the same services as the next service provider, you’ll quickly find yourself becoming a commodity, vulnerable to a lower-cost provider of the same service. Find, invent, “borrow,” re-spin or resell services that are truly unique. Our 'Taskfire' co-managed service desk is a good example of this. It allows any service provider to engage new clients with a tool that allows them to manage the internal tasks they can handle and easily outsource anything they can’t to you. This opens up a limitless array of new co-managed service combinations, and has the added benefit of giving you complete visibility into what your clients are doing, and how they do it.
4. Use The Cloud To Your Advantage – Despite of what you’ve heard (and what you might expect me to say), Cloud Computing will not take over the IT industry. There will always be on-premises resources, networks, computers and software to be serviced. However, it’s the fastest growing segment of our business, and a technology that you need to leverage and become expert in. What better way than to manage your own business from the Cloud? Despite some notable exceptions that I’m sure you’ve read about, the Cloud has become amazingly stable, available and reliable. Last year Autotask had virtually no unplanned outages for the entire year, and we continue to invest heavily in our infrastructure to keep it that way. Adopting a cloud infrastructure in your own business can give you speed and flexibility and drive efficiencies in areas that are critical for you to maintain your services advantage. It can also offer you a way to develop new capabilities, such as instantly 'turning on' new managed services offerings or tracking the delivery of your proprietary service offerings more easily. You can even use the cloud as a command center to monitor your entire business and keep track of the key sales, service and operational metrics that determine monthly, even quarterly business success. Take a look at ways to embrace a cloud model where it makes the most sense to grow your profitability.
I don’t have a crystal ball, but what we do know is that 2010 will be a year of great opportunity and increased competition. Take the time to differentiate your business, brand your services and take advantage of new technologies like cloud computing.
Bob Godgart is the CEO of Autotask Corporation
But all the tough decisions and hard work have a pay-off – especially for VARs and MSPs who continued to invest in their businesses and proactively serviced their customers during these tough times. Those who have made it are going to enter the new decade leaner, meaner, stronger and smarter than ever before. Here are my top five strategic tips for the new year:
1. Take Stock and Invest in What You do Best – If you haven’t done so yet, examine which services and solutions produced the highest amount of sales and profit for your business in 2009, and which were losers. If you run some basic reports and crunch a few numbers around revenue minus SG&A, you might discover the three to four service offerings that made your year. But, there may also be less obvious keys to increased profitability, and that’s where your key performance metrics against industry benchmarks are so important. If you haven’t done so yet, invest in some basic benchmarking software to help you track your own business progress. At Autotask, we train every new customer how to set up a variety of executive dashboards and reports, and offer up a great little benchmarking tool for this purpose.
2. Join Forces Around the Globe – In 2009, the Managed Services industry went global in a big way – from Australia to the U.K., even Southeast Asia, we introduced the world to a whole new way to conduct IT business and grow an IT services practice. As a result, solution providers and VARs who are doing business in Asia and Europe discovered new vendors and partners to grow their revenue and expand their expertise. In fact, 'service' has become the big buzz word of the industry, so much so that even traditional IT hardware vendors have purchased big name service integrators to add to their IT solutions portfolio. How can MSPs compete? Service providers in the IT service industry have become masters in the art of partnering. Many of you have chosen IT business management systems like Autotask specifically to manage those partnerships as easily as you manage internal resources.
3. Find Ways to Get More “Sticky” With Your Clients – If all you do is offer the same services as the next service provider, you’ll quickly find yourself becoming a commodity, vulnerable to a lower-cost provider of the same service. Find, invent, “borrow,” re-spin or resell services that are truly unique. Our 'Taskfire' co-managed service desk is a good example of this. It allows any service provider to engage new clients with a tool that allows them to manage the internal tasks they can handle and easily outsource anything they can’t to you. This opens up a limitless array of new co-managed service combinations, and has the added benefit of giving you complete visibility into what your clients are doing, and how they do it.
4. Use The Cloud To Your Advantage – Despite of what you’ve heard (and what you might expect me to say), Cloud Computing will not take over the IT industry. There will always be on-premises resources, networks, computers and software to be serviced. However, it’s the fastest growing segment of our business, and a technology that you need to leverage and become expert in. What better way than to manage your own business from the Cloud? Despite some notable exceptions that I’m sure you’ve read about, the Cloud has become amazingly stable, available and reliable. Last year Autotask had virtually no unplanned outages for the entire year, and we continue to invest heavily in our infrastructure to keep it that way. Adopting a cloud infrastructure in your own business can give you speed and flexibility and drive efficiencies in areas that are critical for you to maintain your services advantage. It can also offer you a way to develop new capabilities, such as instantly 'turning on' new managed services offerings or tracking the delivery of your proprietary service offerings more easily. You can even use the cloud as a command center to monitor your entire business and keep track of the key sales, service and operational metrics that determine monthly, even quarterly business success. Take a look at ways to embrace a cloud model where it makes the most sense to grow your profitability.
I don’t have a crystal ball, but what we do know is that 2010 will be a year of great opportunity and increased competition. Take the time to differentiate your business, brand your services and take advantage of new technologies like cloud computing.
Bob Godgart is the CEO of Autotask Corporation
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