{"id":28185,"date":"2018-02-26T06:24:33","date_gmt":"2018-02-26T14:24:33","guid":{"rendered":"http:\/\/www.enxmag.com\/twii\/?p=28185"},"modified":"2018-02-27T22:39:27","modified_gmt":"2018-02-28T06:39:27","slug":"lucrative-managed-it-market-offers-unlimited-potential-for-turnkey-solution-providers","status":"publish","type":"post","link":"https:\/\/www.enxmag.com\/twii\/state-of-the-industry\/2018\/02\/lucrative-managed-it-market-offers-unlimited-potential-for-turnkey-solution-providers\/","title":{"rendered":"Lucrative Managed IT Market Offers Unlimited Potential for Turnkey Solution Providers"},"content":{"rendered":"

Any conversation involving managed IT generally centers on the 8,000-pound gorilla in the room: security. Last summer, more than 143 million U.S. consumers saw their personal information (social security numbers, birth dates, addresses, etc.) exposed in the Equifax breach. And 2018 was ushered in with the revelation of the Meltdown and Spectre vulnerabilities that tapped into most mainstream processors to expose user information.<\/p>\n

We\u2019ve tapped a security expert, Datto\u2019s own Henry Washburn, who penned a must-read companion piece on the nuances of platform security as a deep dive on the subject. For our purposes here, we\u2019ve canvassed a number of larger office technology dealers, managed IT specialists and turnkey platform providers to explore the vast opportunities that still exist to provide guidance, measurement and service to the network galaxies of their customer base.<\/p>\n

\"\"

Greg VanDeWalker,
Collabrance\/GreatAmerica Financial Services<\/p><\/div>\n

Yes, the office technology channel has heard the incessant beating of this drum before, yet statistics bear out that this sector of managed services remains one of the most untapped sources for adding net-new business. Greg VanDeWalker, senior vice president of IT Channel and Services for Collabrance and GreatAmerica Financial Services, notes a Computer Economics study from 2016 analyzing the print and IT spends for customers revealed 98 percent is ticketed toward IT and only 2 percent for print.<\/p>\n

 <\/p>\n

The managed IT forecast is very bright in terms of dollar spend and future opportunities that the IoT are going to bring to the solution provider controlling the customer\u2019s network.<\/p>\n

Greg VanDeWalker, Collabrance\/GreatAmerica Financial Services<\/p><\/blockquote>\n

Controlling the Network<\/strong><\/p>\n

Indeed, the window of managed IT opportunity appears to be getting wider, thanks in no small degree to the networking growth offered by the Internet of Things (IoT), according to VanDeWalker.<\/p>\n

\u201cIf you\u2019re a managed IT organization currently handling the obvious IT infrastructure\u2014desktops, servers, firewalls, BDR\u2014eventually you\u2019re going to have an opportunity to start layering in other things connected to the customer\u2019s network, and potentially charge for monitoring and managing some of those high-yield devices,\u201d he said. \u201cThe managed IT forecast is very bright in terms of dollar spend and future opportunities that the IoT are going to bring to the solution provider controlling the customer\u2019s network.\u201d<\/p>\n

\"\"

Michael Amiri,
Continuum<\/p><\/div>\n

As technology becomes more complex, companies are more reliant on vendors and resources beyond their own four walls to help them manage and support their network needs, according to Michael Amiri, senior director of Dealer Services at Continuum. From a dealer\u2019s perspective, the financial gains offered through managed IT greatly outpace a dealer\u2019s core deliverables.<\/p>\n

As dealers can reap net margins upwards of 35 percent, Amiri feels it is imperative for dealers to avail themselves of this lucrative growth platform. \u201cDealers have to adapt to what the marketplace is asking of their office technology vendors,\u201d he said. \u201cA one-stop-shop approach to managing an entire network is key to becoming more relevant to the everyday end client.\u201d<\/p>\n

A dealer that has a fixed-fee IT labor partner that achieves scale can drastically decrease labor costs and ensure an elastic set of resources that always meets the challenges of increasing resource needs as the numbers of users supported grows over time.<\/p>\n

Michael Amiri, Continuum<\/p><\/blockquote>\n

Internal Source Overload<\/strong><\/p>\n

Perhaps the greatest target range for scaling managed IT lies within the SMB sector. Bob Maxwell, owner of South Charleston, WV-based KOMAX Business Systems, notes that many SMBs rely on a single person in-house or an external staff to navigate its IT department, yet can outgrow their resources in short order. This can result in system down time and a loss in productivity.<\/p>\n

It is not uncommon for businesses to unwittingly find themselves in need of a major overhaul when it comes to hardware or software. Whether they\u2019re unaware or ill equipped to handle the needs, or lack the information necessary to make an informed decision, it creates an opening for dealers to perform a thorough analysis and execute a game plan that can lock in a client for the long haul.<\/p>\n

\u201cThis puts KOMAX in a perfect position to offer our expertise with IT and managed services,\u201d Maxwell said. \u201cOur goal has always been to offer the best product and service supported by the best people\u2014our employees.\u201d<\/p>\n

The demand for convenience and efficiency is driving the opportunities presented by managed IT, according to Kia Robinson, managed services sales manager for New York City-based Atlantic, Tomorrow\u2019s Office. This challenges service providers to remain at the fore of trends and learn how new services can enhance the client experience.<\/p>\n

\u201cThe potential is limitless,\u201d Robinson said. \u201cOur goal is to help them utilize technology to expand their business, improve employee productivity and remain competitive within their respective industries. As long as a technological mind remains challenged to expand its creativity into the unknown, there will always be an opportunity for growth.\u201d<\/p>\n

\"\"

Chris Falzett,
Topp Business Solutions<\/p><\/div>\n

Market saturation is one factor that can temper enthusiasm. But Chris Falzett, president of Scranton, PA-based Topp Business Solutions and its Topp IT Services division, notes his dealership has gained organic traction with the value-added service. He finds having the IT technical staff an added bonus for handling the solutions support required on the copier side of the business.<\/p>\n

\u201cWe have been in the IT business for decades within the health care vertical, providing digital dictation, speech recognition and coding solutions, so expanding our team to provide down-the-street IT services was a natural transition,\u201d Falzett said. \u201cI do feel if your company isn\u2019t equipped to handle IT, then in time it will affect other portions of your business. It helps to show clients and potential clients that you aren\u2019t a \u2018me, too\u2019 copier company and that your team has true depth. Having the ability to be a partner and not just a vendor is a good thing.\u201d<\/p>\n

I do feel if your company isn\u2019t equipped to handle IT, then in time it will affect other portions of your business. It helps to show clients and potential clients that you aren\u2019t a \u2018me, too\u2019 copier company and that your team has true depth.<\/p>\n

Chris Falzett, Topp Business Solutions<\/p><\/blockquote>\n

Paths to Profitability<\/strong><\/p>\n

\"\"

Jim George,
Donnellon McCarthy Enterprises<\/p><\/div>\n

Some dealerships predict an unlimited ceiling for managed IT to account for a lion\u2019s share of its business, and Donnellon McCarthy Enterprises (DME) of Cincinnati is among them. DME President Jim George projects his managed network services business will account for more than 50 percent of overall business during the next five years.<\/p>\n

One of the keys to profitability, according to George, is the continued cohesiveness that exists between the sales ranks and the MNS technical staff. He feels the account managers are the quarterbacks for their respective clients and it is incumbent upon them to drive MNS activity within those accounts.<\/p>\n

\u201cThe collusion of both sales and MNS teams is where the magic is,\u201d George said. \u201cWe try to avoid hardware-only sales. We are looking for long-term partnerships that are valuable to both sides.<\/p>\n

\u201cWe have a quarterly review process that allows the account manager to identify a MNS opportunity.\u00a0Once identified and qualified, the rep will bring in a subject matter expert that will assist with the solution.\u201d<\/p>\n

The collusion of both sales and MNS teams is where the magic is. We try to avoid hardware-only sales. We are looking for long-term partnerships that are valuable to both sides.<\/p>\n

Jim George, Donnellon McCarthy Enterprises<\/p><\/blockquote>\n

\"\"

Calvin Wanner,
All Copy-Verticomm<\/p><\/div>\n

One of the primary staples in the quest for profitability lies in having a true understanding of how to maximize efficiencies, according to Calvin Wanner, the sales manager for Verticomm, the IT division for Denver-based All Copy Products. \u201cPeople and employees are your product,\u201d he said. \u201cThe better an MNS company can understand and satisfy the needs of a client, the greater the potential for revenue and profitability.\u201d<\/p>\n

People and employees are your product. The better an MNS company can understand and satisfy the needs of a client, the greater the potential for revenue and profitability.<\/p>\n

Calvin Wanner, All Copy-Verticomm<\/p><\/blockquote>\n

Striking a proper pricing balance commensurate with services goes a long way toward keeping clients and adding to your bottom line, KOMAX\u2019s Maxwell observes. He has seen cases where short-sighted MSPs lose money over the long term by underpricing services in order to close the deal. KOMAX relies on All Covered to ensure proper market pricing for services, hardware and software. When the dealer sells projects through All Covered, it works with project managers to ensure everyone involved fully understands what is expected during and at the completion of the project.<\/p>\n

\u201cThis allows us to provide an accurate statement of work with pricing to the client,\u201d Maxwell said. \u201cThe pricing is always clear and we know exactly what we need to charge for all services before we sell them. When possible, KOMAX staff will implement part or all of a project. This helps increase margins and keep our staff sharp on all technologies.\u201d<\/p>\n

Employee Competencies<\/strong><\/p>\n

Continuum\u2019s Amiri is a firm believer in the notion that how a dealer acquires its labor force is the most critical factor in determining profitability. IT labor has the dual-edge sword of being difficult to find and costly to maintain, yet it is the best avenue toward delivering high-quality customer support.<\/p>\n

\u201cA dealer that has a fixed-fee IT labor partner that achieves scale can drastically decrease labor costs and ensure an elastic set of resources that always meets the challenges of increasing resource needs as the numbers of users supported grows over time,\u201d Amiri said.<\/p>\n

Unlike the copier side of the business, VanDeWalker cautions that not every customer is an ideal fit for managed IT services. The managed service providers have a firm grasp on their ideal customer profile and tend not to deviate into businesses who are markedly bigger or smaller than the target range. It can be tough for dealers to stick to their guns, but given the complexity of IT, it behooves dealers to remain disciplined.<\/p>\n

Standardization is another area VanDeWalker sees as being critical to driving managed IT profits, as deviating from a standard technology stack can be problematic for several reasons. \u201cYou can\u2019t become proficient with all the different types of technologies out there,\u201d he said. \u201cHaving a standard stack of technology that you\u2019re skillful at and getting your end users to adopt it is key. Some dealers take an approach where no matter what is in that customer environment, they bring it on. These dealers end up with a very noisy service desk with service tickets that take too long to resolve because it\u2019s an older technology or an unfamiliar one. This can result in a frustrating experience for customers. In this case, you\u2019re just burning money and resources in a very inefficient way. The more you can have your customers standardized on the same BDR, firewall and email platform, the ability to solve issues before they happen drastically increases. If there is an issue, it\u2019s probably something you\u2019ve seen dozens of times before and can now provide a faster resolution to help your customers.\u201d<\/p>\n

\"\"

Kia Robinson,
Atlantic Tomorrow\u2019s Office<\/p><\/div>\n

Robinson of Atlantic, Tomorrow\u2019s Office outlined four critical steps to attaining profitability: investing in people, empowering them, exercising extreme ownership and creating an infectious environment that is obsessed with excellence. Taken as a whole, these four areas can ensure a dealership\u2019s team is tending to client needs and using good business judgment without compromising customer service.<\/p>\n

\u201cOur entire team feels that they have contributed to the growth of the division,\u201d she said. \u201cShared success creates a win-win culture, not win-loss.\u201d<\/p>\n

Our entire team feels that they have contributed to the growth of the division. Shared success creates a win-win culture, not win-loss.<\/p>\n

Kia Robinson, Atlantic Tomorrow\u2019s Office<\/p><\/blockquote>\n

Gateways to Success<\/strong><\/p>\n

Every victorious marathon runner emerges from a race with his\/her share of blisters, and it is also true of the office dealer world that for every successful win in the MSP space, there are bumps and bruises that were accumulated along the way. One of the keys to Topp\u2019s success has been maintaining realistic expectation. Just because a dealer has managed to penetrate an account with copier business isn\u2019t an automatic given that a managed IT contract is a fait accompli. Falzett notes his company has been able to leverage its strengths in hardware and document management in generating growth for the IT division. When customers realize a dealer like Topp has such wide-ranging value, it precludes the need to be the lowest-cost provider.<\/p>\n

\"\"

Bob Maxwell,
KOMAX<\/p><\/div>\n

From a lessons learned perspective, creating balance within the IT staff is critical to providing a strong solution. \u201cI learned quickly from our leadership team that your IT services division is like a basketball team, and having all point guards or all centers doesn\u2019t work,\u201d Falzett said. \u201cYou need to strike a healthy balance of skill sets and then begin the internal cross-training from there. Have a true team with complementing skills that works together and gets your entry level technicians proficient in a hurry.\u201d<\/p>\n

 <\/p>\n

Periodically discussing our offerings with potential clients\u2014and especially current clients\u2014is key.<\/p>\n

Bob Maxwell, KOMAX<\/p><\/blockquote>\n

Verticomm\u2019s Wanner believes much of his division\u2019s success can be traced back to following processes and procedures. \u201cThere is always a moving target and a new product,\u201d he said. \u201cIn order to continue to be successful, one must be current on technology, security, the cloud, etc., while not jeopardizing the client experience.\u201d<\/p>\n

In the eyes of KOMAX\u2019s Maxwell, the road to success begins with a carefully cultivated IT team of experienced professionals who understand the complexities of dealing with a varied customer core with unique needs, environments and personalities. KOMAX\u2019s staff boasts a bevy of veterans with more than 15 years of IT experience under their belts, and 10-plus years in the managed IT environment.<\/p>\n

Getting the word out regarding your dealership\u2019s IT competencies can be an overlooked aspect. Too often, Maxwell has heard the phrase \u201cyou do that?\u201d from clients who assumed the dealership only trafficked in printers and copiers.<\/p>\n

\u201cSome businesses will not be ready for managed IT or switching providers,\u201d he said. \u201cPeriodically discussing our offerings with potential clients\u2014and especially current clients\u2014is key. When they are ready to start or are in need of a change in IT services, we want them to think of KOMAX.\u201d<\/p>\n

\n
Obstacles to Success: Avoiding the Tripping Points<\/div>\n
\n

The road to success for managed IT is often potholed, unwittingly, by managed service providers who don\u2019t follow a linear process for sales, engagement, assessment, implementation and follow-up. While these observations may seem rather obvious, there are still too many firms who lack a repeatable and consistent sales process, according to Michael Amiri, senior director of Dealer Services at Continuum.<\/p>\n

\u201cSelling managed IT services is different from selling imaging technology, so let\u2019s ensure that the sales team is ready to pivot to something new,\u201d he said. \u201cThe core sales team must be provided with the appropriate IT sales specialists, the right kind of IT sales vetting training and all of the relevant sales\/marketing tools to propagate the story on how an office equipment dealer is the most suitable selection to become that one-stop-shop across a client\u2019s network.\u00a0If the sales team is not confident in the IT services offering or if they don\u2019t have the proper resources to generate success, the venture is sure to fail.\u201d<\/p>\n

A Core Business<\/strong><\/p>\n

Dealerships who opt to buy into a managed IT company often fall short when it comes to providing that acquisition with the necessary resources to grow and become profitable under new leadership. And whether the path dealers take is acquiring a company or partnering with a Master MSP platform, it is essential for dealers to regard managed IT as a core business, notes Greg VanDeWalker, senior vice president of IT Channel and Services at Collabrance.<\/p>\n

Approaching managed IT with an \u201c\u00e0 la carte\u201d mentality can be problematic and prevent dealers from realizing the highest margins the offering promises. \u201cSome companies will sell a backup\/disaster recovery solution just to do something in IT, but you can\u2019t put enough of those out there at a high enough margin to really make that a successful business model,\u201d VanDeWalker said. \u201cYou\u2019re fixing one problem but leaving so many unanswered, and competitors will come in and address all of the customer\u2019s technology issues with their managed IT solutions. You will become irrelevant in a short amount of time. Successful providers commit to a being a fully outsourced IT source for their customers, a trusted technology advisor and that\u2019s where providers get the highest value.\u201d<\/p>\n

Managed IT providers must be adept at performing technical as well as business assessments for their clients. VanDeWalker notes the technical assessment is the easy part. The business assessment\u2014interviewing the key stakeholders within a client, understanding how they use technology, learning their pain points, discovering past problems and unearthing their limitations and goals\u2014is more critical to the success of securing a managed service contract.<\/p>\n

\u201cWe see a lot of companies who don\u2019t appreciate the sophisticated level of sale required to sell a managed service contract,\u201d he said. \u201cA managed IT sale takes more time and you have to be patient with the process, follow all the steps and do it the right way. Sometimes we see companies try to take shortcuts, and that usually doesn\u2019t yield high margin contracts. Providers who follow a proven sales process close more sales and bigger margins that increase their business valuation with monthly recurring revenue. \u201d<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Any conversation involving managed IT generally centers on the 8,000-pound gorilla in the room: security. Last summer, more than 143 million U.S. consumers saw their personal information (social security numbers, birth dates, addresses, etc.) exposed in the Equifax breach. And 2018 was ushered in with the revelation of the Meltdown and Spectre vulnerabilities that tapped into most mainstream processors to expose user information. We\u2019ve tapped a security expert, Datto\u2019s own Henry Washburn, who penned a must-read companion piece on the nuances of platform security as a deep dive on the subject. For our purposes here, we\u2019ve canvassed a number of larger office technology dealers, managed IT specialists and turnkey platform providers to explore the vast opportunities that still exist to provide guidance, measurement and service to the network galaxies of their customer base. Yes, the office technology channel has heard the incessant beating of this drum before, yet statistics bear out that this sector of managed services remains one of the most untapped sources for adding net-new business. Greg VanDeWalker, senior vice president of IT Channel and Services for Collabrance and GreatAmerica Financial Services, notes a Computer Economics study from 2016 analyzing the print and IT spends for customers revealed 98 percent is ticketed toward IT and only 2 percent for print.   The managed IT forecast is very bright in terms of dollar spend and future opportunities that the IoT are going to bring to the solution provider controlling the customer\u2019s network. Greg VanDeWalker, Collabrance\/GreatAmerica Financial Services Controlling the Network Indeed, the window of managed IT opportunity appears to be getting wider, thanks in no small degree to the networking growth offered by the Internet of Things (IoT), according to VanDeWalker. \u201cIf you\u2019re a managed IT organization currently handling the obvious IT infrastructure\u2014desktops, servers, firewalls, BDR\u2014eventually you\u2019re going to have an opportunity to start layering in other things connected to the customer\u2019s network, and potentially charge for monitoring and managing some of those high-yield devices,\u201d he said. \u201cThe managed IT forecast is very bright in terms of dollar spend and future opportunities that the IoT are going to bring to the solution provider controlling the customer\u2019s network.\u201d As technology becomes more complex, companies are more reliant on vendors and resources beyond their own four walls to help them manage and support their network needs, according to Michael Amiri, senior director of Dealer Services at Continuum. From a dealer\u2019s perspective, the financial gains offered through managed IT greatly outpace a dealer\u2019s core deliverables. As dealers can reap net margins upwards of 35 percent, Amiri feels it is imperative for dealers to avail themselves of this lucrative growth platform. \u201cDealers have to adapt to what the marketplace is asking of their office technology vendors,\u201d he said. \u201cA one-stop-shop approach to managing an entire network is key to becoming more relevant to the everyday end client.\u201d A dealer that has a fixed-fee IT labor partner that achieves scale can drastically decrease labor costs and ensure an elastic set of resources that always meets the challenges of increasing resource needs as the numbers of users supported grows over time. Michael Amiri, Continuum Internal Source Overload Perhaps the greatest target range for scaling managed IT lies within the SMB sector. Bob Maxwell, owner of South Charleston, WV-based KOMAX Business Systems, notes that many SMBs rely on a single person in-house or an external staff to navigate its IT department, yet can outgrow their resources in short order. This can result in system down time and a loss in productivity. It is not uncommon for businesses to unwittingly find themselves in need of a major overhaul when it comes to hardware or software. Whether they\u2019re unaware or ill equipped to handle the needs, or lack the information necessary to make an informed decision, it creates an opening for dealers to perform a thorough analysis and execute a game plan that can lock in a client for the long haul. \u201cThis puts KOMAX in a perfect position to offer our expertise with IT and managed services,\u201d Maxwell said. \u201cOur goal has always been to offer the best product and service supported by the best people\u2014our employees.\u201d The demand for convenience and efficiency is driving the opportunities presented by managed IT, according to Kia Robinson, managed services sales manager for New York City-based Atlantic, Tomorrow\u2019s Office. This challenges service providers to remain at the fore of trends and learn how new services can enhance the client experience. \u201cThe potential is limitless,\u201d Robinson said. \u201cOur goal is to help them utilize technology to expand their business, improve employee productivity and remain competitive within their respective industries. As long as a technological mind remains challenged to expand its creativity into the unknown, there will always be an opportunity for growth.\u201d Market saturation is one factor that can temper enthusiasm. But Chris Falzett, president of Scranton, PA-based Topp Business Solutions and its Topp IT Services division, notes his dealership has gained organic traction with the value-added service. He finds having the IT technical staff an added bonus for handling the solutions support required on the copier side of the business. \u201cWe have been in the IT business for decades within the health care vertical, providing digital dictation, speech recognition and coding solutions, so expanding our team to provide down-the-street IT services was a natural transition,\u201d Falzett said. \u201cI do feel if your company isn\u2019t equipped to handle IT, then in time it will affect other portions of your business. It helps to show clients and potential clients that you aren\u2019t a \u2018me, too\u2019 copier company and that your team has true depth. Having the ability to be a partner and not just a vendor is a good thing.\u201d I do feel if your company isn\u2019t equipped to handle IT, then in time it will affect other portions of your business. It helps to show clients and potential clients that you aren\u2019t a \u2018me, too\u2019 copier company and that your team has true depth. Chris Falzett, Topp Business Solutions Paths to […]<\/p>\n","protected":false},"author":166,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[1641],"tags":[],"_links":{"self":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/28185"}],"collection":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/users\/166"}],"replies":[{"embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/comments?post=28185"}],"version-history":[{"count":13,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/28185\/revisions"}],"predecessor-version":[{"id":28340,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/posts\/28185\/revisions\/28340"}],"wp:attachment":[{"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/media?parent=28185"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/categories?post=28185"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.enxmag.com\/twii\/wp-json\/wp\/v2\/tags?post=28185"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}