CA Nimsoft Monitor for Flow Analysis 1.10 introduces several new improvements related to deployment and reporting, including expanded analysis options and a longer historical retention period. For more information, please refer to the Release Notes.
Establishing a pricing approach can be one of the most daunting decisions MSP executives have to make. Price too high and get laughed out of the customer’s office. Price too low and you can leave money on the table, compromise margins and jeopardize long-term viability. Exacerbating matters is the fact that today’s pricing decisions have long-term ramifications. Bad pricing decisions have a way of sticking with you, since you’ll need to honor them over the lifetime of the customer contract.
Consequently, it’s important to put some serious consideration into how to price services, particularly if you’re in an early stage MSP. Following are a few important pricing rules to consider:
While it may be obvious, it bears repeating: the goal is to maximize the profitability of each and every service offered. Do not be afraid to set the price high. Discounts can always be given if and when needed, but you can never go back and ask for more money after you propose a service at a lower price.
It is critical for leadership to establish a clear discounting strategy so sales and finance understand what discounts can be offered, and when. If not, you’re liable to get dragged down by a series of deals priced in a one-off fashion, which breeds confusion and inefficiency while closing business. By taking a more standardized approach, a sales representative can submit quotes for internal review, with reference to the discount policy and an explanation of why the customer is being offered a discount. Management will be able to easily verify the rationale, and approve as appropriate. If the proposal is accepted, finance will also be privy the discount strategy, so they won’t be taken by surprise when processing the order. This simplified process sharply contrasts situations where sales representatives are left to make up their own discounting strategy. Without a clear discounting strategy, representatives must develop individual pricing, leading to inconsistency and additional cycles for those who have to approve proposals, process orders and book revenues.
Establishing a complete, accurate understanding of your costs is a critical first step to ensuring pricing sets the stage for profitability. This includes operating expenses, human capital costs, capital expenses and issue resolution times. Once the cost is established, the price needs to reflect an achievable profit point—never sell a service below cost.
It is important to start with an understanding of the offerings being brought to market, and whether they fit the description of a commodity or a value-based offering. The pricing model will vary substantially depending on the answer.
Establishing a tiered pricing model is often a highly effective way to make pricing attractive and fit the budgets of a range of prospects. Further, this tiered model gives MSPs an opportunity to establish pricing for a range of customers, while at the same time standardizing pricing internally to streamline sales, management and finance efforts.
The best MSP sales representatives are those that take a consultative, value-based approach, even if you are delivering commodity type services. When going into an account, it is vital that your sales team understand the prospect’s business and the value the offerings provide within that context. When this consultative approach is employed, the sales representative should consult the tiered pricing model, but present a single price proposal to the prospective customer. The sales representative should consider the prospect’s challenges, objectives and budgets and build a proposal based on those requirements. This approach demonstrates that your company is looking to truly partner with the prospect and deliver long-term value.
Given the vital nature of pricing, this isn’t a once-and-done deal. It’s important to assess the profitability of customers and specific services and track them over time to ensure the pricing continues to make sense.
If a particular service takes too long to deliver, has a high failure rate or has been the source of refunds due to service level agreement (SLA) breaches, you may want to avoid offering as a recurring service. Instead, it could make more sense to provide these services within a billable scope of work.
Establishing pricing is a daunting effort because so much is riding on it—and there aren’t simple formulas or answers. The reality is that there is no one-size-fits-all approach to pricing MSP services—to the contrary, having a cookie-cutter pricing strategy can be a huge disadvantage. The trick is establishing a pricing model that is optimal for your customers and your business.
Now there’s a new white paper that takes some of the guesswork out of developing effective pricing strategies. “Pricing Your MSP Offerings: Key Strategies for Building a Winning Pricing Model” provides the high-level strategies you need to formulate a pricing model that works best for your business. If you’re tasked with managing pricing strategies for your MSP business, this paper is a must read.
This article was originally posted on MSPmentor as a guest post from Greg Donovan. Read the original article here.
There is a definite fear factor when it comes to making the move to managed service provider because it involves accepting a whole new business model with a larger set of responsibilities. However, when the fear is overcome, VARs (at least any we’ve came in contact with) soon realize that becoming a managed service provider is an easy and profitable transition which adds a lot of value to their business.
When making the move to MSP, your company makes the transition from being purely a ‘reseller’ of a product or service to undertaking an important IT advisory role specializing in the provision and management of key IT services. This change in delivery model and in effect role, also enhances the business’s relationship with the customer and undoubtedly increases loyalty, with the MSP ultimately removing much of the IT stresses from their client, through the assessment and provision of the required managed services and supplying on-going support. This increased ‘loyalty’ and often lock-in effect, generates the added incentive to move from VAR to MSP so as to quickly and easily build up a predictable monthly recurring revenue stream.
The move from the stagnating break/fix model to that of an MSP is often a huge barrier for VARS, not because the VAR themselves are against but because of the customer’s familiarity with this approach. The ability to ring up and get top service (for a nominal often discounted fee) when and where required until your issue is fixed is an attractive option for many customers as opposed to paying an on-going monthly fee for continued availability and support and guidance in the event that it may be required. In other words, the great customer service offered by VARs to build up their business and customer base has in reality the ability to cripple their business or at a minimum prohibit scalable growth.
The break/fix method presents many problems for VARs such as added costs and staffing issues as well as limited predictability when it comes to revenues. All in all it’s a risky model – if nobody calls for said support you’re still out operational costs and staff wages but there are no profits to be seen. Instead, with the Managed services approach, clients pay a monthly fee and what they get in return is the ultimate selling point; the continued availability of expert support staff as well as problem solving engineers and account managers. These team members dedicate their time to enhancing the customer’s IT experience and business efficiency by developing problem-solving strategies for recurring issues or potential weaknesses. Therefore they don’t have to keep fixing them and the customer isn’t making a loss on premium support cost, lumbered with hefty bills or product replacement costs on an ad hoc basis which their budgets haven’t accounted for.
The opportunity for monthly recurring revenue is probably the main appeal for going down the MSP road and offers huge growth potential for all sizes of providers that is truly scalable when managed correctly. Monthly recurring revenue enables MSPs to make their services much more efficient by enabling business owners to fully account for staff, operational and time costs more accurately in advance – so no nasty surprises or having to keep extra engineers on the payroll ‘just in case’. Also remote management allows for fewer staff working from a centralized location and more cost advantages for a business. The ability to grow and expand through a scalable means will always be a primary goal for ambitious companies and the MSP model is built exactly for this type of business.
Caroline Bowers
Caroline Bowers is part of the marketing team at Maildistiller, a cloud security vendor that is deploying email services globally.
Many MSPs in recent years have enjoyed tremendous success as a result of taking a vertical market strategy. There are significant and compelling advantages IT service providers can enjoy by taking this approach. For example, when they lead with a vertical market-focused offering, MSPs have found they often end up speaking to contacts higher in the organization’s ranks, they have an easier time establishing credibility and trust, and they find themselves in markets that have less competition and pricing pressure. Further, delivering vertically-focused IT offerings can be a great way to build standardized, repeatable processes and to leverage and build on customer success.
For many MSP executives, this sounds pretty alluring, and for good reason. However, anytime you’re talking about changing business models, marketing tactics and more, the decision isn’t one to be taken lightly. If you don’t currently have a vertical market strategy, and are considering making a move, the following are a few factors to consider:
Existing customer base. While it may seem obvious, taking stock of the current list of customers is a critical first step. Your existing portfolio of customers may already have a high concentration of companies from a particular vertical industry, even if that wasn’t a conscious effort or focus. That should definitely factor into planning. Even one prominent customer from a specific industry can be a huge asset as you’re trying to establish a foothold in a market segment and expand on it.
Industry prospects. A key criteria to consider is the overall health of the market, and the industry’s expected trajectory of growth or contraction. For example, with the financial incentives the HITECH act provides for investment in systems that support electronic health records, the prospects in healthcare have been bright for MSPs. In other industries, recent years have been tough, and, while disruption can create opportunities for MSPs, it can also pose risks.
Culture. It is important to take an honest look at the existing culture within your business and determine whether there’s a match with a potential target industry. Obviously, if you have a pre-sales engineer wearing flip flops and the client’s wearing wing tips, that would be a warning sign. While attire can be a simple thing to change, the underlying culture isn’t, so be sure that there’s a cultural fit with the organizations you’d be looking to work with.
Openness to outsourcing. By their very nature, organizations in some industries are more likely to outsource their IT than others. It’s critical to take a hard look at past outsourcing tendencies of organizations in a particular vertical, and make sure that there’s ultimately an opportunity to win outsourcing business. That said, in some cases a history of reluctance to outsource could represent an opportunity. For example, a service provider may see that their targets in financial services have been reluctant to outsource a specific service to cloud providers in the past. They could carve out a successful niche by delivering a service that addresses compliance requirements.
Once you’ve decided on a vertical to target, take an honest look at existing skill sets and identify gaps in knowledge and make sure you address them — before going out to market. You can’t force or fake industry expertise. To be successful, both in sales and service delivery, your organization has to have a solid understanding of the specific technology environments of the industry, the language they speak, and their business realities.
If you’re contemplating a move to a vertically focused business model [and you should!], be sure to check out our upcoming MSPmentor webcast, “Vertical Market Excellence: Your Path to Success.” This webcast will feature Ciaran Dwyer, CEO, 3t Systems and Greg Donovan, VP, Service Providers, CA Nimsoft. Both have successfully guided their firms into a new IT vertical market practices. These executives will draw on their experience to provide an overview of the most promising markets to target, including healthcare, some of the obstacles you can expect to encounter, and strategies for delivering optimal value to customers within a specific vertical market.
This article was originally posted on MSPmentor as a guest post from Ken Vanderweel. Read the original article here.
A widely held belief in the ITSM world is that automation is a key enabler of IT service management strategy as environments become more complex and diversified. The CA Nimsoft ITSM experts agree, but only to the extent that your processes are under control and aligned with business results. That’s where the balanced scorecard can help.
Similar to a strategy map, a balanced scorecard is a framework, which ensures that your strategy is implemented effectively relative to your organization’s people (Learning and Growth), internal processes, customers, and financial performance. The concept has been around since the early 90′s relative to business management. So what does this have to do with ITSM Strategy? Internal processes, including service management processes, drive satisfied customers and contribute to achieving the businesses’ financial objectives. Of course, the previously described scenario assumes that your IT support staff has the capabilities and learning platforms in place to maintain and enhance capabilities as the business need and technology change.
Taking a look at the IT service management processes, service managers can identify balanced scorecard perspectives for each and align them with the business objectives. Let’s use the Service Catalog and Request Management process as an example. Say that a business outcome is to reduce support costs. Obviously, you could cut support staff, but that could lead to poor customer support—not a balanced approach. When you balance cost reductions with maintaining or even improving service levels, the process then becomes better aligned with customer and financial outcomes. So investing in automation at the process level could not only reduce costs by offering self-service ticketing and routing, but also simplify and speed the process for customers. As a result it’s possible to reduce costs, and perhaps even staff, or at least optimize existing staff. In either case, automation is aligned with your customer’s need and the business objectives.
The second example makes the case for service management automation in a BYOD environment. It describes alignment between people competencies, process requirements, customer need and business objective. Application performance and availability will be critical to the demanding requirements of a mobile workforce. In terms of change management agility, automatic discovery of environments and devices, can minimize the drain on IT support staff and ensure an up-to-date CMDB. More importantly, IT support staff can effectively monitor the new environment as it relates to the overall IT infrastructure. The Balanced Scorecard approach prevents unexpected events from impacting service levels. It ensures alignment between the customer and IT, so that baseline monitoring metrics are adapted to the new environment in a planned way and not by surprise when an incident occurs.
Granted, these are simplified high level views and require performance metrics to complete the picture. However, the reality is that given the heterogeneous and distributed environments in which we operate, automation will be essential to capture business benefits while preventing IT costs from escalating. A Balanced Scorecard helps guide effective ITSM decisions that contribute more impactful results to overall business objectives.
We like what Forrester’s @stephenmann has to say about IT service management strategy (via ZDNet). For additional ITSM strategic guidance, talk to a Nimsoft ITSM expert. Learn how to effectively implement a service automation strategy that fits within your budget and business objectives.
In Information Technology, as well as other fields, retaining top talent is a risk factor affecting an organization’s ability to execute on its business plan. The CA Nimsoft IT Service Management team has seen, firsthand, the power of people in driving business. Based on experience, we’ve compiled the following tips for retaining top ITSM talent.
If there’s one thing IT folks like to do, it’s learn new things. With the convergence of IT and BT, now is an excellent time to encourage IT colleagues to gain business skills in areas including finance, organizational resource management, and operations management. Understanding business concepts not only improves engagement, but also offers a progression path for high potential IT colleagues—not to mention a better understanding of how service management affects every aspect of the enterprise.
Really??? We know this one is obvious, but we’re amazed at how often it’s overlooked. Some employers fear that investing in technical knowledge will make their staff more attractive to other employers and are reluctant to invest too heavily only to have colleagues courted by competitors. That’s a philosophy for a revolving door retention plan. Whether it’s ITIL certification, or platform-specific training and certification, upgrading technical skills is a must-have for most organizations that value their talent and seek to retain it. When combined with other perks—and not necessarily monetary perks—continuous learning should be a staple of every IT retention program.
Similar to #1 and #2 above, skills expansion refers to complementary skills that may be secondary to technical skills or business skills, but can improve the effectiveness or your IT team. For example, project management is as much an art as a science. Enabling your technical teams with project management skills can ensure more timely, successful deployments and change management. Additionally, Six Sigma training is another complement to running a leaner more effective IT service management team.
We often see talented IT colleagues pigeonholed on a team with little opportunity for cross-pollination of talent or ideas. Although an organization can’t implement every new idea, it can at least leverage the experience and technical expertise of colleagues to improve the business. Ask colleagues where they see themselves in three to five years. Some may not have given it a thought. However, taking an interest their career and offering suggestions for helping them develop personally and professionally can go a long way toward retaining good talent. Provide opportunities for colleagues to gain additional experience by having them participate on cross-functional IT teams or serve as project leaders.
Force fitting IT colleagues into a role they either are not comfortable with or are not adequately trained for is a disaster in the making. Matching talent goes beyond skill levels. It can also include work environment and soft skills such as paring IT colleagues with the right manger and team. As more large enterprises embed IT colleagues within business units, matching IT talent and business talent is even more influential on business success.
Money can be a motivator, but it can quickly become overshadowed by elements that are equally as important when it comes to retention. Work environment, work/life balance, opportunity for advancement, health benefits, etc. are among top non-monetary perks. Here’s where a little creativity can shape a more engaged and satisfied workforce. It also affords smaller companies an opportunity to attract good talent without a major enterprise size budget.
Read Eric Jackson’s article “Why Companies are Terrible at Selecting, Retaining and Motivating Their Talent” (via Forbes Magazine) for a good list of what NOT to do when courting or retaining talent. In the meantime, let CA Nimsoft’s ITSM talent optimize service management talent in your organization.
Your MSP business has automated reporting, monitoring, and help desk workflows. Why not automate marketing as well? Once the sole domain of only the largest MSPs, marketing automation platforms are simpler and less expensive, and now viable for a significant number of MSPs.
Consequently, marketing automation technologies can present a huge opportunity. Marketing automation enables MSPs to build intelligent, programmatic management of the entire lead lifecycle, so they can better capitalize on the leads generated, make sales and marketing staff more productive and ultimately boost sales. To illustrate, here’s a sample scenario for how an MSP could leverage marketing automation.
All Star MSP exhibits at a local business conference. As part of the exhibitor package, the company receives a spreadsheet with the contact details for the 220 individuals that attended. All Star’s marketing coordinator uploads the list into the company’s marketing automation platform, which then automatically does the following:
In this scenario, the value of the initial marketing investment is maximized, sales gets to focus solely on the highly qualified leads that are most likely to buy and marketing gets the insights it needs to track the process, optimize it, and make smarter plans and investments to further build the pipeline.
Given all these benefits, is a marketing automation platform right for your business, right now? The answer may be yes, but it may be no. How do you decide? To get complete details, be sure to download our new white paper “Marketing 101 for MSPs: Marketing Automation”. The paper outlines the key capabilities of marketing automation, the benefits it can provide MSPs and some practical steps for getting started.
This article was originally posted on MSPmentor as a guest post from Ken Vanderweel. Read the original article here.
We all know the story of Goldilocks and the Three Bears. It turns out, Goldilocks would have made a good systems manager with her “just right” approach. But what is “just right” when it comes to monitoring the growing complexity of today’s IT environments.
One could argue that the same end-to-end system monitoring required by large enterprises is also a requirement for small and mid-size businesses. Capabilities such as automatic discovery, centralized monitoring of environments—physical or virtual; on or off premise as well as integrated service desk monitoring are becoming essential to businesses of all sizes. However, the return on investment in many of the enterprise-level monitoring solutions just isn’t feasible for the small and mid-size business. Even when deployed on a modular basis, the scale and scope required to justify the cost simply will not make for a wise business decision. It’s a tough sell for any CIO in a small or mid-size business.
On the other hand, the continued use of point solutions, which proved useful in more homogenous environments located on premise, is quickly becoming less effective as IT environments proliferate. While they still serve a purpose, we advocate for building a system that’s sized for your organization and also offers flexibility to configure—not customize—to meet the business need today and tomorrow. We emphasize configurable because although customization is always a possibility through coding, it often adds to the long-term cost of ownership. That’s cold. Configurable systems offer greater flexibility to meet your business objectives without compromising IT resources. In fact, configurable systems should reduce overall IT costs or at least improve service levels without increasing service management costs.
As we pointed out in the previous section, configurable solutions offer greater flexibility at less cost than customization. From our point of view, systems management that’s “just right” includes the following three characteristics: (1) unified; (2) configurable; and (3) flexible in terms of capability and pricing options—pay-as-you-go versus conventional usage licensing. A unified approach should give you complete visibility into your local IT environment or remote locations and cloud-based infrastructures. From a configuration perspective, APIs and SDKs offer a faster way to customize monitoring than coding. These same APIs can also support integration with service desk functionality, which can be a boost to setting and meeting SLAs.
Finally, any system should be designed from the ground up to be extensible. We see this as a must-have feature, given the dynamics of today’s IT environments. Mobile (BYOD) and the cloud are making a huge impact on environments. So as these technologies proliferate, systems management solutions need to adapt and not become obsolete. With an adaptable solution, you won’t wake up frightened, like Goldilocks to find three bears. You’ll be better equipped to monitor the “bears” whether real or virtual; on premise or off.
Let CA Nimsoft build a systems management solution that’s just right for your business and budget.
In an era of big data and big infrastructures, the server role really is too big to fail. Your servers sit at the core of the business applications that are critical to running the business. Although the server role may be too big to fail, IT budgets aren’t always big enough to effectively monitor proliferating and heterogeneous server environments. Even small to mid-size enterprises and MSPs tell us it’s challenging to maintain service levels in a constantly changing environment.
We believe the answer lies in automation. While automation isn’t the panacea for all things monitoring, it can alleviate a significant portion of server monitoring issues that impact service levels. We canvassed our customers to see how they managed server proliferation in an era of too big to fail. Here are our top three recommendations.
The advantage of clusters—scale, scope and high availability—are the very issues that make them difficult to monitor. It’s not feasible to assign an administrator to each cluster or platform type. Even if it were possible, manually administering them is ineffective at spotting real-time issues that could point to a potential failure.
With automation, administrators can establish upfront performance thresholds, aligned with the SLA, and receive automatic alerts when thresholds are approached or exceeded. But even before a threshold is exceeded, status reports indicate the overall health of the network particularly in a failover or load balancing situation, avoiding unnecessary alarms. This gives administrators the visibility they need to manage more server clusters without the added overhead.
A growing concern among systems administrators is not only the proliferation of servers, but also the proliferation of server platforms. Although most platforms have their own monitoring capabilities, it’s not enough to monitor the server independent of the cluster to which it belongs. Systems administrators look for efficient code-based systems that monitor multiple platforms from a single system. This alone helps administrators operate more efficiently despite the complexity of virtual/physical environments.
We recommend using topographical tools to make it easier to locate issues. Our philosophy is that a picture is worth a thousand data points. Why comb through endless data streams or log files, when you can automate the process and visual the results. Having a holistic, single console view also gives administrators more confidence that they can maintain service levels effectively. Of course, a picture that’s only partially complete is of no value, which leads to our third element… visibility.
When it comes to monitoring servers, every administrator knows that the sum of the parts is greater than the whole. Where administrators need assistance is gaining visibility to each part’s interdependency across the entire high availability system including virtualized environments. So if an application is running slowly, the administrator can pinpoint the server issue, and also other underlying issues that may be the root cause. Often, the most obvious cause is not necessarily the source of the problem; it may be a symptom of another issue. With service-level insights, administrators are monitoring the metrics within the context of the SLA and as part of the entire HA system.
We find that administrators who have visibility to insights at the service level tend to have better optimized IT assets. These administrators are aware of the service level thresholds under which each server operates. As a result, they are more effective at utilizing available capacity because they know the point at which a server will impact service levels.
The role of servers in most organizations makes them too big to fail. However, effective server monitoring doesn’t have to be too big to manage effectively. Learn more about effective server monitoring in our 8-page white paper, The Top 5 Server Monitoring Battles—and How You Can Win Them.
The answer may seem obvious… of course they’re not mutually exclusive. However, our experience, working with both enterprise and MSP customers, is that often IT Service Management (ITSM) and Business Relationship Management (BRM) are unintentionally mutually exclusive. We’ve found that the disconnect between ITSM and BRM is often the result of a lack of clarity on the role of BRM within the organization and often indicative of overarching IT issues. Organizations that are effectively integrating the BRM process tend to also have clarity around several key areas including organizational structure, supply versus demand, and accountability.
While ITIL broadly defines the process of BRM as being the voice of the service provider to the customer and vice versa, how BRM fits within the organization depends on a number of factors. One such factor is organizational size and complexity. In large enterprises where IT service management encompasses numerous business units, the role of BRM may fit at or near the executive levels of the IT organization, with dotted line responsibility to the business unit. In a smaller organization the role may fit within systems management or program management. In any case, BRM acts as a partner to the service management team and should be aligned with the organization’s operating model, e.g., geographic based, market based etc.
Typically, IT service management is responsible for supply—the IT services and infrastructure that already exist. Part of supply responsibility is ensuring appropriate resources to deliver on existing supply. BRM is typically responsible for demand management—the IT services and infrastructure that don’t exist, but customer need or business need is driving demand. This is where is a little clarity goes a long way. In the true sense of the meaning, the BRM function ensures that the business has what it needs to remain competitive, makes the business case for updates and prioritizes what’s needed/requested. BRM works closely with service and program management to agree on deliverables budget and ensure a smooth transition. For a more in depth discussion, read CIO’s A New Model for IT Demand Management by Michael Gentle.
In a traditional account management role, say within a professional services firm, the account manager is responsible for all aspects of the relationship with the customer and ensures that the team behind her or him upholds their part of the service or support. We view the BRM similarly. They are the outward face of the services management team and responsible for cultivating the relationship with the customer. Part of cultivating the relationship with the customer is cultivating partnerships within IT so that the hand-off from BRM to service management is clear. For example, the customer wants to implement sales force automation. Regardless of the tool or its implementation, the BRM is accountable to the customer for the implementation and post implementation support; and service management and project management are accountable to BRM for meeting the agreed upon deliverables. Is IT Organizational Confusion Exacerbated by the Role of Business Relationship Manager? by Vaughan Merlyn is a good read on the BRM.
BRM is an essential function of ensuring the business needs are aligned with IT service management priorities. When you consider all the roles that go into ITSM, having a business relationship manager gives the customer a single point of contact, which is easier for the customer. However, such a relationship can only be successful when there is clarity within the organization backing the BRM.
Learn how CA Nimsoft can help you leverage service management to provide a clear interface between the business and IT.
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