Managed Service Providers Will Profit If They Learn Best Practices



Are managed service providers (MSPs) terminally unique in their business challenges? In other words, do they face unique challenges — such as in billing customers and in sales — all because they’re selling intangibles, not tangible products?

No, they’re not terminally unique. Information-technology service providers face the same issues as most companies in traditional intangible sectors, such as insurance.

But many MSPs have problems coping with typical challenges, according to a 2014 study by IT Europa. (IT Europa, www.iteuropa.com, is a leading provider of strategic business intelligence, news and analysis on the European IT marketplace.)

entrepreneur-593358_1280Actually, in their quest for profits, all businesses have to work to solve the following issues:

— Branding

— Pricing

— Sales

— Quality products and services

— Controlling expenses/cash flow

— Management/human resources

— Customer service and retention

— Strategic planning

— Innovation

The events and sectors might differ, but best practices in other industries are applicable and transferable to MSPs.

The study’s key findings:

– Channels need to know how to charge for services: with falling prices for hosting and cloud services, the MSPs need to differentiate. One of the issues that came out of the study is that they have concerns over rising competition.

However, on the client side, there is a rising need for expertise and skills in making it all work, particularly when linking in to legacy systems, so there is a clear role for MSPs to use any vertical market expertise they have to provide an essential service, and charge for it.

– Clearer propositions are needed: delivery models should offer the flexibility and scalability that the study shows customers expect and which MSPs are glad to provide; but they may need explaining better; the industry is so new, and growing so fast it has yet to get its marketing message straight.

– MSPs need all the help they can get, in marketing, tools, integration and to use all the available skills and resources.

MSPs told the study that they have real concerns in finding the right partners, particularly among vendors, citing quality of support and quality of product as the two main things they regard as important or very important, especially by smaller MSPs.

– Many of the people in the study had concerns over enterprise mobility; mainly because of the scale of involvement, pace of change and the integration issues. There are just not that many people around who have done it to the scale that is coming.

So, the challenges are typical. Solutions in other sectors are applicable for MSPs, too.

From the Coach’s Corner, here are some of those solutions:

5 Reasons for a Strategic Plan and its 6 Key Elements — Are you ready to compete? Is your company like many that need to rethink their strategic plans? Here are some tips in strategic-planning basics.

For Stronger Profits, Avoid 11 Typical Pricing Mistakes — In general, how can you manage the sweet spot – between your price-optimization and costs? Dennis Brown of the consulting firm, Atenga (www.atenga.com), says many companies make 11 pricing mistakes:

Create Buzz to Win Your Major Marketing Campaign — There are many reasons for marketing failure of a campaign. Here are 14 of the more important reasons.

The 7 Steps to Higher Sales — Secrets for sales success – seven steps to higher sales, five value perceptions that motivate customers to buy, and the three-step process for overcoming sales objections.

HR Management: 3 Values to Deliver Top Customer Service — The three values needed to achieve top customer service are easy-to-understand but arduous to achieve. But if your human resources program adopts and implements these values, you’ll achieve enviable organizational effectiveness – a high performance culture – for strong revenue.

“Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.”

-Albert Einstein 


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Author Terry Corbell has written innumerable online business-enhancement articles, and is also a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.




Customer Loyalty Issues — Lessons from Technology Companies



In B2B, many companies make the mistake of focusing on developing new business when they should focus more on customer retention programs. A case-in-point is the technology sector.

In its “2013 Customer Loyalty Survey,” ServiceSource (www.servicesource.com) reveals that technology vendors — hardware and software — are blowing revenue opportunities because they drop the ball in customer relationships.

entrepreneur-593358_1280ServiceSource polled 200 IT decision-makers about their relationship with hardware and software vendors.

Less than 18 percent of respondents were content with their IT providers.

Fifty-two percent indicated they would start shopping around.

Sixty-six percent said their relationships with vendors were “complicated” — meaning they were dissatisfied.

“It’s no wonder that customer churn is top of mind for every company,” said Christine Heckart, executive vice president of marketing, Strategy, people and systems at ServiceSource.

“As businesses focus more and more on recurring revenue, they can’t afford to win customers just once and expect fidelity for life,” she added. “They need to win them over and over again.”

Most IT departments feel neglected and ignored, with 57 percent of respondents only hearing from their vendors at renewal time, if at all, according to ServiceSource.

Other key findings:

– 52 percent of respondents received calls or emails from their vendors’ competitors at least once per month.

– 42 percent take sales calls from their vendors’ competitors at least once per quarter; 20 percent take them at least once per month.

– More than 25 percent of respondents participate in competitor webcasts every quarter, with 69 percent at least once a year.

– 49 percent have used competitive intelligence from a sales meeting to renegotiate a current contract.

– 65 percent of on-premise software respondents view SaaS as a potential suitor to replace existing systems.

– Of those with a preference, respondents were twice as satisfied with their hardware vendors as their software vendors, indicating that loyalty is harder to maintain as you move up the technology stack.

“As businesses focus more and more on recurring revenue, they can’t afford to win customers just once and expect fidelity for life. They need to win them over and over again.”

Ms. Heckart maintains the technology companies’ failure to be attentive to their customers costs them billions in potential revenue.

“This outdated approach results in businesses leaving significant revenue on the table,” she asserted.

“In fact, most companies make the majority of profits from the customers they’ve already won,” she added. “This is a major mindset shift and requires new thinking, tools, and focus.”

Amen.

From the Coach’s Corner, for better customer loyalty and revenue, here are valuable tips:

Strategies for Maximum Customer Loyalty, Profits — Customer retention is important for profits in good times and bad. Here are customer-retention tips, and social-networking tips from a B2B sales pro.

Energize Your Customer-Loyalty Program with 6 Steps — The quickest way for established businesses to optimize revenue is to have a stellar customer-loyalty program — there are six steps you can take for repeat sales and referrals. If you’re not a great steward of your current book of business, it’s futile to look for new customers. 

Internet Shoppers Demand 3 Cs – Customer Experience Study — Success in e-commerce is increasingly challenging for retailers that want to dominate in brand preference, customer loyalty and word-of-mouth advertising. That’s because consumers want more and more in the three Cs — channels, choices and convenience.

Why Companies Are High Maintenance to Customers (but Don’t Know It) — Businesses are losing more than they know because they inconvenience customers. Such negative customer perceptions result in lost opportunities in revenue growth, tarnished branding and smaller profit margins, according to a study.

Why Your Customers Stay or Leave – Insights from Study — Despite all the emphasis on speed in customer service, it’s not the salient factor in keeping customers happy. A study confirms that the power of emotion is most important, according to a January 2013 published report in QSRweb.com.

“The purpose of a business is to create a customer.”

Peter Drucker


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.






Two Studies Indicate Need for IT Pros to Get Businesslike



CEOs have long complained to me about information technology. They complain about high-priced consultants, and that IT projects are too expensive and fail to yield a return on investment.

Indeed, two 2011 studies underscored the need for IT professionals to become more businesslike.

ID-10033907 photostockStudy No. 1

At ITBusinessEdge, Ann All wrote a dynamic piece, “Don’t Let IT Projects Get Out of Control.”

In it, she cites a study by McKinsey consultants and Oxford University that show both public and private sector IT projects can be a headache.

But the public sector gets more criticism thanks to enterprising journalists.

Ms. All cites Oxford Researcher Bent Flyvbjerg in a silicom.com article.

“A big one is lack of senior executive involvement,” she writes. “Senior managers have tended to see IT as less strategic and delegate responsibility for it…”

She quotes researcher Flyvbjerg, who provides his five solutions to prevent out-of-control IT projects.

The five solutions include:

1. Benchmark it. This should be the first step, says Flyvbjerg, because it will help organizations understand everything that follows.

2. Get the bias out of the business case. The researchers found most IT projects are “highly biased,” with inaccurate estimates of costs, schedules and benefits.

3. Minimize complexity. This advice gets repeated a lot.

4. Limit project duration. The researchers found that projects that lasted longer than 30 months are the most likely to go out of control.

5. Get a master builder. It’s important to enlist someone with proven project experience, Flyvbjerg says.

Study No. 2

A Tenable Network Security study indicates 90 percent of security professionals are aware of reported breaches, but the majority don’t take proper action.

That’s right, the Tenable press-release headline reads: “90 Percent of Security Pros Take Note of High-Profile Breaches, But Majority do Nothing.”

The study surveyed attendees at the 2011 Gartner Security & Risk Management Summit. More than 90 percent were aware of the Citigroup, RSA and Sony breaches, but only 23 percent didn’t act on the information.

It gets worse.

“Nearly half (46 percent) of attendees surveyed had experienced some form of insider threat while at their current company, but surprisingly ‘preventing insider threats’ was ranked the second-lowest information security priority for the next six to eight months by the field,” said the press release.

“Even more surprising, one in three security professionals admitted that they had violated internal security policies they created in order to complete a work-related task quickly and/or easily,” Tenable added.

Yes, part of the problem with such IT projects is the lack of full participation by upper management, but clearly, chief information officers and their staffs have to do some needed footwork in communication and planning.

From the Coach’s Corner, related resource links:

Why CFOs Are Still Calling the Shots in IT Decisions The top IT decision-maker for many companies is not the chief information officer — the chief financial officer is, according to a Garner study.

How CIOs Can Get More Respect in the C-Suite — Despite the importance of their work, chief information officers have difficulty earning respect from senior executives. Here’s what to do about it.

4 Keys So Marketing and IT Can Create Business Revenue — Businesses will generate more revenue if their information technology and marketing professionals strategize more effectively. For instance, success in e-commerce is increasingly challenging for companies that want to dominate in brand preference, customer loyalty and word-of-mouth advertising.

4 Recommendations to Avoid Spending Too Much on IT — To take advantage of big cost savings in information technology, a study says businesses need to change their buying habits. Here’s how.

Tech Planning: What If There’s Another Downturn? — Technology-research firm Gartner recommends in a study that chief information officers should get ready for another downturn. That requires planning.

“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.”

-Bill Gates


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.





Photo courtesy of photostock at www.freedigitalphoto.net

Tech Trends: CFO’s the Boss, IT Departments Are Disappearing



Two developments are clearly underway in information technology. Increasingly, the chief financial officer is in charge and IT departments are shrinking in size.

First, regarding the shrinking size of IT departments, a Corporate Executive Board study indicates they’re diminishing in size, according to writer Joe McKendrick  at SmartPlanet.com.

MH900422730 young business womanIt’s not a cutback in jobs, just a shift in how IT professionals are put to work. He writes companies are either are tapping IT service providers or clouds.

The study indicates IT department will be 75 percent smaller by 2015, and 80 percent of IT budgets will be spent on IT vendors’ services.

What’s driving this phenomenon?

Probably best-practices in consolidation as CFOs assume more authority.

A study by Gartner and Financial Executives Research Foundation (FERF) was based on the perspectives of senior finance managers.

It’s entitled, “2010 Gartner FEI Technology Study: The CFO as Technology Influencer.”

Findings include:

— Forty-two percent of IT departments report to CFOs

— Thirty-three percent are supervised by the chief executive officer

— Sixteen percent report to the chief operating officer

— Two percent are overseen by the chief administrative officer

— Seven percent to other executives

Most importantly, the CFO has a major say in 75 percent of IT departments and a minor input in 20 percent. In 5 percent, the CFO has no influence.

Why? Two studies indicate a need for IT pros to get businesslike.

“In most organizations, the CFO and CIO work together daily to finance IT and provide information that supports financial processes, but there is also an opportunity for them to form a powerful alliance that generates more value for the enterprise,” said Bill Sinnett, FERF’s director of research, in a statement.

“The CFO and CIO are well-positioned to work together at generating superior performance from the enterprise,” he added.

The  study makes it clear IT department personnel, especially the CIO, should understand an organization’s big picture and how they can best contribute to the  firm’s welfare via the CFO.

My Biz Coach conclusion from the two developments:  IT success hinges on acculturation with the finance mindset as well as a higher degree of integration with the rest of the organization. It’s different but it’s the wave of the future.

From the Coach’s Corner, related resource links:

Nervous About Your New Boss? Here’s How to Deal with ItWhether you just got a new job or whether your company just assigned a new boss for you, here’s how to develop poise and to manage your boss.

8 Tips on How to Ask Your Boss for a Pay Raise — Your food, gas and other living costs have increased. But you need tips on how to ask your boss for a pay raise. You’re mindful about the economy and that unemployment rates are high. With the exception of Wall Street, payroll budgets are constricted everywhere, and you haven’t had a raise recently. Here’s what to do.

The 22 Dos and Don’ts for Successful NegotiationsNo matter what you need to negotiate, there are easy strategies to get anything you want. But you must first remember it’s important to reach a fair compromise – with win-win negotiating skills.

9 Dos and Don’ts for Best Decision-making — The dos and don’ts for best decision-making are applicable in three ways: Whether you have difficulty making the best decisions, engage in self doubt after making one, or are gun shy because some of your decisions have failed you. To err is human.

“I wasn’t a financial pro, and I paid the price.”

-Ruth Handler


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Author Terry Corbell has written innumerable online business-enhancement articles, and is a business-performance consultant and profit professional. Click here to see his management services. For a complimentary chat about your business situation or to schedule him as a speaker, consultant or author, please contact Terry.






Seattle business consultant Terry Corbell provides high-performance management services and strategies.