IT and Business Insights for SMB Solution Providers

Co-Managed IT: The Beginning of a Beautiful Friendship

A push into the midmarket with co-managed IT is how I.T. Solutions of South Florida plans to grow and stand out in the changing MSP landscape. By Deana and Jason Pizzo

DIFFERENTIATION IS KEY to the growth strategy of I.T. Solutions of South Florida and responding to changes in the MSP market. That’s why earlier this year we launched a co-managed IT offering targeting midmarket companies that extends and enhances current in-house IT teams as well as delivers increased efficiencies and cost benefits.

With so many SMBs and larger businesses utilizing the cloud, traditional MSP offerings are becoming commoditized. We saw a need and an opportunity in the midmarket, where internal IT staff are stretched thin and have little time for keeping up with new skills training, developing documentation, automating processes, establishing a ticketing system, or creating a centralized place for configurations.

Also, much of the organizational knowledge is often in the IT employee’s head or on sticky notes, making the business owner feel trapped. That is a huge burden for the IT professional who wants to take a vacation, for example, but worries that no one will know how to troubleshoot an issue. It’s also a potentially huge problem for the company if the IT person suddenly chooses to leave and walks away with that knowledge.

With co-managed IT, we can be a partner to IT and help them exponentially expand their offerings with our team of experts. We want to be a solution provider, not just a patching and managing service. Our goal is to increase ROI for clients and change the way they do business through technology. We provide road mapping for six, 12, and 24 months out. We also ask questions like: How are you doing payroll? What is your workflow from sales to engineering? What line-of-business apps do you have, and do they talk to each other? That separates us from other MSPs, because we are saving them money through technology. IT won’t just be an expense on the P&L.

It also helps our own growth strategy that midmarket companies have IT budgets. Plus, our team loves working with the IT staff on the other end. When you’ve established trust and camaraderie with the in-house IT group, it’s the beginning of a beautiful friendship.

Challenges and Strategies

Co-managed IT is a much harder sell, however, with a longer sales cycle. Oftentimes, the conversation is with both the finance person and the business owner. The challenge is that they already have an IT department so they don’t think they need you. So we must demonstrate how we can save them money as well as increase efficiency.

Documentation is a big conversation opener. Are they using tons of freeware with no documentation? What happens if their IT person leaves for another job? What are they doing for security? Could they have a better backup system for less money? What is their IT spend vs. the ROI?

Another big challenge is not only winning the deal, but winning over the IT department. While the business owner is evaluating the service from a financial standpoint, the IT team doesn’t want to lose their jobs. If IT is not on board, they will throw the brakes on the deal, so it’s important that internal IT understands we are their ally and their partner. We’re there to make their job easier. The idea is to make it a win-win.

Once we’ve got buy-in for co-managed IT, we’ve found business continuity and disaster recovery is the easiest product to get in the door initially. Security is also a pressing initial need that makes a good starting point.

We are early in our initiative, but have already landed two co-managed IT clients and are actively romancing another four. It’s definitely not a quick process, and our marketing and branding need to be spot on so if a prospect suddenly has his or her hair on fire with an acute IT need, we will be top of mind.

For other MSPs considering a co-managed IT program, we offer the following tips:

  • Have persistence; this is not an easy sell.
  • Position your offering as an extension of the IT staff; you’re a partner, not someone who is putting them out of a job.
  • Seek the opportunity; it will not fall into your lap.
  • Do your homework on your target. Find out who the decision makers are and work your network.

Going forward, our federal certification as a woman-owned business will open some doors to the government market—a perfect fit for co-managed IT. And we intend to stay lean and mean, automating as much as we can without losing the human touch. That human interaction is also what makes us different.

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