Companies are rightly reluctant to part with their hard-earned cash which means many Managed Services Partners find it a challenge persuading customers to invest in IT

Giving and getting more for less

By Lisa Lacy | Solution Provider | 20 August 2015 | Article Link

Companies are rightly reluctant to part with their hard-earned cash which means many MSPs find it a challenge persuading customers to invest in IT

The desire for clients to reduce costs as much as possible means MSPs sometimes face an uphill battle in justifying their worth.

However, the value MSPs offer can help clients drastically reduce their own expenses and so it’s well worth the effort to make sure clients understand said value.

In fact, Bruce Campbell, vice president of marketing at Clare Computer Solutions, which provides IT consulting, as well as network services and support, toldChannelnomics he’s providing much more support than he did in the past.

That’s worth noting as better IT support translates to reduced downtime, which, in turn, means more efficiencies, greater access to assets and lower total cost of ownership overall.

“Better IT support – even if it costs more – reduces downtime, which saves the company money and contributes to the bottom line,” Campbell said. “In conversations with potential clients, there is a sea change in how they think of IT. They see it as a cost center and want it to cost less and reduce it so they’re not paying so much. But if you look at what IT brings to a business and what technology brings to the operation in terms of efficiencies, less wasted time and effort and things like that, one dollar more spent on IT might result in five or six dollars saved.”

And this conversation is necessary partially because clients sometimes still see MSPs simply as repair people.

“We want to steer clients away from repair and talk about maintenance and try to help them understand the difference,” Campbell said. “There’s an important distinction. We were all repair shops at one point and, like the Maytag Repairman, it was a joyous day when a new virus hit the street because there was something to do. But that’s not in the client’s best interests.”

Instead, MSPs have come to realize they need to create a service paradigm in order to keep systems up and running, Campbell added. What’s more, cost to clients increases significantly when it comes to emergency repairs when systems go down. “Clients are far better served by having programs in place to prevent servers from coming down,” Campbell said. “We have made significant strides in changing the way they think about IT.”

But this perception of MSP value is sometimes impacted by client size.

“Smaller companies tend to get a little nervous and are more cost conscious and they sweat writing that check every month – ‘Why am I paying for this?’” Campbell said.

“Or nothing has gone wrong for two or three months and the things we’re doing are the things they’re paying for, but they’re wondering why they’re paying for it.”

Further, increased competition means MSPs can differentiate themselves by finding ways to offer after-hours services without charging more or without charging as much, Campbell said.

But there are also plenty of ways for MSPs to reduce their own internal costs.

Jason Caras, co-CEO of IT Authorities, a Tampa, Florida-based MSP, said it’s all about economies of scale.

“We have run very profitable and we’ve done so because of starting with the philosophy of creating scalability, documentation, process control and automation wherever possible so you can do more with less,” he said. And, further, there are opportunities to reduce employment costs.

In fact, David Litt, founder and CEO of Blue Star Technology, an MSP in Bloomington, Illinois, noted every MSP that wants to grow eventually encounters the same problem: Finding good employees that are well-trained in technology, but have soft skills, too.

“Soft skills are just as important as tech skills. The end user has to walk away with a great experience,” Litt said.

As a result, he is looking to markets like Croatia, where massive unemployment and government incentives mean it is far cheaper to be an employer and the population includes an enthusiastic workforce to boot.

“Croatia has over 50 percent unemployment. I can buy four employees there for what one costs here,” Litt said. “And those people are, in general, much more driven to get work done. We have been a lot more successful using this for our operations right now.”

And as a result of an upcoming acquisition, Litt said he plans to add additional staff in Croatia. What’s more, Croatia doesn’t come with communication challenges markets like India do.

“I think it’s fantastic,” Litt said. “The people are really hardworking, smart and dedicated and so far it’s been awesome.”