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XChange 2017: MSPs Need To Become A True Virtual CIO For Customers, Not A Virtual 'Captain Obvious'

Too many MSPs fail to be truly proactive in their relationships with customers, leaving them to make the same recommendations that everybody else would make, says TruMethods' Gary Pica at XChange 2017.

MSPs should track and minimize their reactive support hours and use the freed-up time to become a true virtual CIO for clients, said Gary Pica, founder and president of TruMethods, in a session at XChange 2017.

They also need to move away from technology pricing focused on tools, features and support and toward value-based pricing, which instead addresses how their services impact the entire business, said Pica.

Surrounding yourself with the balance sheet for the whole business rather than just the IT department will make the per-seat charge for managed services look relatively small by comparison, he said, thus enabling MSPs to raise their rates.

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"We're a relatively small cost to our customers," Pica said during an executive session Monday at the Gaylord Palms Resort & Convention Center in Kissimmee, Fla. "They just don't see it that way unless we explain it that way."

Too many MSPs fail to be truly proactive in their relationships with customers, Pica said, leaving them to make the same recommendations that everybody else would make. As a result, Pica said the MSP's virtual CIO function becomes more of a virtual "Captain Obvious."

"If you don't understand their business, you can only give them the same advice as everybody else," Pica said.

The channel's relationship with customers will shift from being technical to primarily business-oriented as the evolution to the cloud continues, Pica said. MSPs should therfore focus on how well the end user's technology aligns with their standards, Pica said, and demonstrate the business impact of those misalignments.

"This is the part we're going to be left with, or you'll be left with less," Pica said.

Therefore, Pica said MSPs need to know much more than technology. For starters, Pica said they should know the business challenges, risks, vision, core value, competition, competitive advantage, market position, and margins for each customer.

The main barrier to gathering that customer information, Pica said, is all the time MSPs are sinking into fulfilling ticket requests today. If they are able to successfully control the number of reactive service requests generated by clients, Pica said their value as a true business partner will rise.

"How much time do you spend on reactive support?" Pica asked the audience. "What's left above that is the time you're providing higher-level services."

Pica urged MSPs to tally all the tickets they've received over the past month, add up the time spent addressing those tickets, and divide by the number of endpoints they serve. The resulting metric has been branded by Pica as reactive hours per endpoint, per month, or RHEM.

"If you're not tracking that today, you're going to want to start tracking that," Pica said.

The MSP's total available time minus RHEM yields the total amount of time available to address business issues at the top of the stack. Pica said MSPs typically have just an hour left over, and much of that often gets sucked up by inadequate staffing.

To reduce the amount of time and money MSPs are spending on reactive processes, Pica said they must reduce the number of tickets, reduce the amount of time spent on each ticket, or a combination of the two.

"If you can address the core issue, the symptoms will start to go away over time," Pica said.

Pica proposed that MSPs add a dedicated network administrator to the payroll who's focused exclusively on lowering the noise from reactive tasks, maintaining standards, conducting the technical alignment, and aligning the virtual CIO role with their technical strategy.

MSPs with little money left over need to prioritize existing clients and determine which should be the most important, Pica said. From there, Pica said MSPs should reframe their conversations with customers so that they're making decisions about how much they're willing to pay for better results rather than selecting vendors or technology.

The top of the market has gone up, Pica said, with the average per month deal price for MSPs rising from less than $2,000 several years ago to nearly $4,000 today. That's all because MSPs are starting to change the way they look at their business.

"When you see things more simply, you'll be more successful," Pica said.

McCollister's Technical Services is continually making improvements around driving the amount of money spent on reactive service requests to the lowest level possible, according to Solution Sales Manager Ron Duggan.

But the Burlington, N.J.-based company has spent too much time talking with technical people, Duggan said, and needs to redouble its focus on getting in front of the right audience.

"We're not talking to the decision-makers," Duggan said.

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