Managed Services Survival GuideBy Charles Weaver | Posted 2009-04-30 Email Print
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Solution providers are finding that services are not only the key to surviving the recession, but to ensure healthy and sustainable growth. Here are a few tips for leveraging the power of a services-oriented business.
If you are reading this article, you’re probably in one of two groups.
The first group can best be described as companies who, while they wish the economy would get better faster, are seeing an increase in revenue and their margins are staying steady if not increasing.
The second group, feeling the same about the economy, are feeling desperation due to stagnant or decreasing revenues and rapidly falling margins.
The first group should read this and feel comfort that they have chosen the correct path. The second group should also feel comfort in knowing that there is still time to make a change.
Where are your services?
By now, everyone should be well aware that the IT channel has shifted away from value-added reselling towards an IT solution/services model. IT services are not the future of the IT channel; they are the IT channel. If you do not feel that you have the resources and/or capabilities to make this transition fear not; there are master MSPs out there who can help guide you along this path leading you ultimately towards becoming an independent managed service provider.
Don't play the pricing game
For those of you in the second group, you may feel compelled to play the same pricing games as a service provider as you did when you were a VAR. For the good of the managed services profession, please do not do this. Cutting your rate as a service provider does not encourage more sales. Instead, it says to your client that you are not worth what you were paying before. Reselling a commodity demands that you stay competitive in your pricing. Professional services demands that you cover your costs, make a healthy margin, and ensure that your client knows you are the best.
Don't take short cuts
The reason other professions have lengthy procedures for new members is to ensure standards remain high for the clients. The same is true in managed services. This doesn't mean you have to wait years before you make any money. It does, however, mean that you will be watched very closely by your peers if you try to take short cuts that put the greater good of the profession at risk. Specifically, I'm talking about short cuts in security, IT service delivery processes, outsourcing or subcontracting internal tasks to unqualified or unproven third parties.
Don't be afraid to partner
Other professions have different names for it but the fact remains that in order to become good at what you do you have to be willing to specialize. Specialists not only make more money but they generally do not have to look for work as their professional reputation tends to give them all the work they will ever need. So what do specialists do when confronted with a case or client they do not understand? They make a referral. Solution providers need to learn how to do this if they want to keep their clients happy and keep their staff happy. You cannot be an expert at everything so choose your specialty and make your reputation.
There are many other things you should do in order to weather our current economic storm but keeping these fundamentals in mind should serve you well throughout the coming year.