Pulling Through

Mike Minnich, president and CEO of NetGain Information Systems, wanted to avoid the common missteps channel companies make when adopting managed services, so he attended seminars, conducted research and participated in various business groups to educate himself.

He spent several months working on pricing, one of the managed services model’s biggest challenges because it requires a shift from per-project payments to utilitylike fees that clients pay monthly or quarterly.

“We didn’t want to overprice, underprice or overdeliver,” says Minnich.

But even after all his research, Minnich admits he didn’t quite have it. So a year ago he did what an increasing number of solution providers have been doing—seek therapy for his business. Minnich, who has run NetGain for 13 years, turned to channel consultant Service Leadership to solve his managed services problem.

IT channel companies typically are run by technology-oriented individuals who often find they need help from a consultant or business group to run a business profitably. While seeking outside help isn’t new, the need to better understand the intricacies of running a business has become more acute as the channel’s mission evolves to focus on delivering technology to meet customers’ business requirements as opposed to pushing the latest and greatest products.

“There are a lot of people in this industry who know they’re technology people but need to become business people,” says Larry Kesslin, president of 4-Profit, a technology-focused advisory services company. Too many channel companies, he adds, get by month to month by the seat of their pants.

Paul Dippell, CEO of Service Leadership, says channel executives are hiring consultants for several reasons: to help adapt the business to evolving trends, prepare to sell the business, acquire another solution provider or overcome a near-death experience.

Service Leadership helps channel companies learn to deliver services profitably, make improvements to existing services, and plan strategic moves such as mergers and acquisitions.

Working with Service Leadership, says Minnich, gave his company the counsel he needed to move forward with managed services. In six weeks, Service Leadership shared with NetGain proven business practices on pricing models, balancing costs and tending to customer needs.

“In the end, Service Leadership gave us a repeatable model and processes for bringing on and providing ongoing managed services for each prospective client,” Minnich says. “I wasn’t looking for a business consultant with a cookie cutter approach. We wanted someone who understood our business.”