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MANAGED SERVICES Thinking outside the box
Before moving away from box sales into the managed services space there are a number of important factors for comms resellers to consider...
T
he first question a reseller needs to ask when entering the managed service business is what do they and the customer actually mean by ‘managed service’, according to Peter Titmus, Chairman, Networks First. “A managed service encompasses a broad area and there are some different ideas about what it is,” he commented. “Definition is key, as is understanding what the reseller is selling and ensuring they are not being ambiguous or misleading. If everyone is not clear about what is on offer, and what is required, then it is easy for the reseller to miss an opportunity for a better or bigger sale, or even worse, become involved in something which in reality they just can’t deliver.”
From Networks First’s experience, clients looking for a complete managed service provision often want WAN, LAN, telephony and a flavour of cloud or data centre based application support. “A managed service is a business solution sale, not a box sale,” stated Titmus. “Sales teams must be trained appropriately to ensure that what they sell matches the customer’s expectations. This is not simply about price. The reseller needs to be asking what the customer’s drivers are and what the customer is trying to achieve.”
Key for most resellers will be identifying partner opportunities. “When considering partnerships, it is vital to ask who will help to deliver the service in a fully integrated and seamless fashion,” said Titmus. “The customer needs to be able to rely on getting a cohesive service that they can trust and their expectations will be high. Within managed services, it
will be expected, and necessary, to go over and above, doing more while still making a profit. Managed services has a reputation of being oversold and under delivered, but when it’s done right customers become loyal with long-term relationships being established.”
For any managed service partnership to work, it shouldn’t be about one party being the sales front. Managed services is a team sale with everyone throughout the sales process being available to answer the questions that are relevant to their part of the service. “A true managed service solution will encompass a number of different disciplines, and it is essential that the sale is fully inclusive so that all the different providers can support their element as part of the process,” added Titmus.
Many businesses are encumbered with a complex and costly ICT estate, and a managed services proposition can simplify the complex and deliver value to the customer. Andy Scopes, Director of Managed Services at Datapoint, noted: “A managed service takes out cost, makes telecoms and IT simpler and embeds you with the customer.”
The traditional maintenance market is becoming commoditised with eroding margins, so managed services are the only way forward, says Scopes. Managed services open the door to a more strategic relationship with steady annuity revenues rather than unpredictable peaks and troughs where resellers are often at the bottom of the pile as a tactical supplier. “Get stuck into the customer’s business, know their market and their challenges
Peter Titmus
“A managed service is a business solution sale, not a box sale”
to re-package existing services. Delivering a managed service should mean that resellers become a pivotal element within the customers’ business,” he said.
so that you can provide proactive services to overcome them,” said Scopes. “Resellers should start with their existing customer base. This is a position of strength from which resellers create tailored services and show demonstrable results. Resellers should capitalise on these results and ask customers to act as references and case studies for prospects. Then they will be in a position to broaden out to new service areas.”
Outsourcing solutions raises the bar when it comes to turning customer needs into tangible benefits. “The essence of outsourcing is removing workload from the customer’s organisation which can mean taking away jobs too,” added Scope. “So before turning customer needs into tangible benefits, it’s key to understand firstly if the customer is serious about this, and to ensure that you’re talking to the right decision maker such as the IT director or CIO as opposed to the telco or IT manager.”
Resellers should only consider offering managed services if it adds value to the business by securing long terms revenues, advises Clive Petty, Business Development Manager of the Channel Partner Division at Kcom. “It should not be an opportunity
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Delivery of services to meet customer needs is often a key challenge in the managed service environment. Customer needs are not static. Businesses have to deal with dynamic shifts within the market as a result of actions and policy changes caused by competitors, governments and regulatory authorities. Petty added: “Resellers need to ensure that they include a clear understanding of the key parameters from which the managed service will be measured in their service delivery agreement.”
Resellers operating in the SME sector need to ensure that they offer a choice of services. “We know that our resellers require a portfolio of services that is flexible and scalable with a service wrap and pricing structure that enables them to support the SME sector,” said Petty. “No two SMEs are alike, so resellers will often find that they will need to offer a menu of managed services such as call management and email services, so that SMEs have the flexibility to pick and mix services. They can take incremental steps towards a fully managed ICT service.”
The long walk should be taken in single steps, advises Petty. “It is worth looking for those simple and effective services which may not offer the highest reward or margin, but where the learning process will be an invaluable asset, especially for those resellers who are more used to a capex sales model and are introducing a services sales model,” he commented.
n Connectivity Category COMMS DEALER OCTOBER 2010 51 sponsors the
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