managed services modelWhen I started running my own IT business, I was your typical one-man-band. A techie crawling under tables, fixing computers, and setting up servers.

I was good at what I did, I was professional, and word soon spread.

Before long, I had clients lining up to work with me. More clients than I could manage, if truth be told. I simply didn’t have enough hours in the day to meet all the demands that these clients put on me. What to do?

Well, I could hire my first member of staff to help with the workload. Perhaps I could find somebody equally as good as me technically, and equally as professional as me. For anybody who has ever tried to hire staff, you’ll know such hires are very rare indeed.

But let’s say I did find this wonderful new hire. Surely if they were good, then after a few months (weeks?) the two of us would attract even more new business, and we’d hit the same problem of servicing that business.

We would be trading our time for money — and finding more than 24 hours in any day is an impossible task to solve.

Surely there must be a better way to grow a business?

Selling Value vs. Selling Time

Around the same time I was wrestling with my business growth dilemma, I came across a concept known as managed services.

The basic tenet of managed services is this. Your client doesn’t simply want things fixed; they don’t want them to break in the first place.

Or to put it another way, your client doesn’t actually care how many hours you do (or do not, more on that later …) spend fixing stuff — they just want things to work. They just want to get on with running their business.

How to explain the value of an IT investment

That struck me as an interesting concept. If I could get all my clients’ infrastructure working (as I knew I could!) with minimum downtime and spend less time firefighting, yet still be paid as much (if not more) than I did selling my time for money, then that seemed like a good deal.

In fact, come to think of it, the break/fix model (selling my time for money) actually relied on never truly fixing the client’s issues fully. If they did get fixed fully, then why would the client need to hire and pay me? Hmm …

The bottom line of managed services is this — sell value, not time.

What Is Managed Services?

Over the years, managed services has been defined by different people in different ways. In my mind, however, managed services can be defined as:

  1. Providing 24/7/365 monitoring and maintenance to clients
  2. Providing a flat-fee (some might call this “All You Can Eat”) service to clients
  3. Providing vendor support to clients

Let me clarify what this means to you.

24/7/365 Monitoring and Maintenance

24/7/365 monitoring and maintenance can be achieved by using a remote monitoring and management (RMM) tool to keep an eye on your clients’ infrastructure, automatically resolve many of the problems it finds, and alert you to any you need to resolve yourself.

In other words, you automatically minimise issues and know about any problems before your client does.

What Is Flat-Fee Support?

Providing a flat-fee support service means that if a client contacts you once or 100 times in the month, they are still paying the same amount to you. This is very attractive to clients as it allows them to budget for their IT costs and not face any surprises. It’s very attractive to you because the amount of money you earn isn’t dictated by the amount of hours you work. It means you can build a scalable business.

Contrary to widely held opinions, this “all you can eat” model won’t see you flooded with thousands of calls each month. Trust me when I say your clients have better things to do than call you every five minutes.

How Can You Manage Your Clients Vendors?

Providing vendor support means that your clients no longer have to play telephone Ping-Pong with their suppliers. Broadband faulty? The client doesn’t call the ISP — who then tells them it’s an internal issue and to call their IT, who then tells them it’s a broadband issue and to call the ISP, and on, and on, and on. Instead, the client calls you. You then use your technical expertise to speak to the ISP and resolve the problem yourself.

This approach is attractive to the client because it gives them one throat to choke. It’s attractive to you because you can resolve the problem quickly rather than playing phone tag with the client and their supplier.

Combine these three pieces together, and you have an impressive value proposition for clients, and a way for you to successfully grow your business without having to worry about finding more hours in the day.

Why Managed Services Works

Managed services is a win for the client. It’s a win for you. It’s a win-win situation.

To revisit my own story, once I made the move to managed services, I was able to grow my own IT business very quickly. Clients found the managed services model attractive, and I was able to scale my business.

If you’re currently stuck in the break/fix model of selling your time for money, I’d encourage you to explore managed services, too.

Conclusion

The old break/fix model of selling your time for money is, ironically, broken.

There are only 24 hours in the day, and that isn’t going to change any time soon.

You can sell those 24 hours, but then you’ve reached capacity. You can add more staff to add more capacity, but pretty soon, that capacity will be filled too, and you’re then back to square one.

Managed services relies on selling value rather than time. It’s a win-win for client’s and for you.

If you’re still working on the break/fix model, then what is stopping you from moving to Managed Services? Leave a comment below, or drop me an email at richard@tubblog.co.uk — I’m intrigued to hear from you!

Ready Set Managed

Photo: lOvE lOvE/Shutterstock.com

Richard Tubb

Posted by Richard Tubb

Richard Tubb is a blogger, speaker, and author from Newcastle-Upon-Tyne in the Northeast of England. He provides expert advice to help MSPs grow their IT business, and he has helped the owners of hundreds of MSPs to free up their time, concentrate on doing what is important, and make more money.

5 Comments

  1. Good idea. I have a friend that works on the IT business. He also does the maintenance model instead of the break/fix. It is so much more effective at maximizing your time and earnings. Also as you said, customers prefer paying to have their systems working properly (because it saves money and time for the business in the long run) than waiting for the broken stuff to be fix, potentially putting more stress on you as a technician.

    Reply

    1. Richard Tubb

      Thanks for the feedback, Henry, and I’m glad to hear your friend has adopted a Managed Services-like model themselves. It works! 🙂

      Reply

  2. agreed, speaking from personal experience no matter what size business you have we all need the same levels of protection and whatever upto date security innovations are available. however in a small business its highly unlikely, practically and financially that a team of highly skilled It and threat hunters are at your disposale, which is where platforms like this are essential

    Reply

    1. Richard Tubb

      Thanks for the feedback, Samantha. Managed Services eliminates the need for small business to build their own IT department, with all the challenges that comes with that task!

      Reply

  3. This is great for somebody thinking about joining the IT business like me lol. Great Post!

    Reply

Leave a reply

Your email address will not be published. Required fields are marked *