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Take a Systems Approach for Profitability: Home Improvement Edition

Take a Systems Approach for Profitability: Home Improvement Edition

My colleague, Steve, recently hired someone to mow his mother’s lawn. She’d paid the previous person $50 for the whole property. He found someone at the same rate, but his mom thought it wasn’t fair because the new guy did it in half the time using a riding mower.

Steve argued that the fee should be based on the value of a well-tended lawn, not on how the person achieved it. A riding mower costs far more than a walk-behind. While it takes less time, he needs more clients to pay for it. In the long run, his wise investment in superior equipment will yield greater returns.

This story illustrates the mindset required to transition clients from an hourly rate to a monthly service contract. But it also shows how using the best equipment to do the job efficiently is a prerequisite for business growth. An MSP’s fee is the same whether they spend one hour or 10 maintaining a client’s environment. The key to greater profitability is the capacity to take on more clients by keeping that number closer to one.

Does Best of Breed Still Make Sense?

Good business practices and newer technologies can streamline IT management efforts over time. However, many MSPs are realizing that system design may be the biggest factor governing the time spent managing each client’s IT infrastructure. Traditionally, IT professionals have taken a best-of-breed approach, thinking that the biggest and best equipment will perform the best and last the longest. That works on the component level. After all, a bigger SAN will accommodate a client’s needs for more years, and the better server will handle more demanding applications.

But when you look at the environment as a whole, this best of breed model starts to present significant challenges.  The complexity, cost and inefficiency of the entire environment is high.

  • Each component has to work with everything else, and compatibility and interoperability issues consume hours of work.
  • Separate equipment for each application results in overprovisioning and wasted resources.
  • Each piece of hardware has its own management tools that are accessed separately.
  • The total cost of the equipment and manpower support is high.
  • Managing multiple vendor contracts and support resources is time consuming.

Converged Infrastructure Benefits

A converged infrastructure, on the other hand, relies on coordinated system design, packaging multiple components into a single optimized solution for infrastructure orchestration and automation. By pooling and virtualizing resources, converged infrastructures centralize IT management, consolidate systems, increase resource utilization and lower costs.

By reducing the amount of time required to coordinate and manage IT resources, MSPs free up their staff to handle additional clients and achieve many advantages:

  • Deploying new resources takes far less time.
  • System patches and upgrades are pre-tested for impact on the entire infrastructure.
  • Resources are pooled to support multiple applications and business units.
  • Automated and coordinated systems reduce the need for specialized IT skills.
  • Only one vendor is necessary, with a single financial, technical and business point of contact.

MSPs need to employ the most effective and efficient tools for supporting their clients. By considering the big picture—the efficiency and quality of the entire system, rather than its individual components—MSPs can reap higher profits while providing better service with less effort. 

In other words, if you want to make money by mowing more lawns, get a riding mower. And to grow your lawn care business even more, get one that bags, edges and fertilizes at the same time.

John McCallum is Vice President of Sales, Zenith Infotech.  Zenith Infotech specializes in delivering enterprise-class IT solutions for virtualization, storage, and business continuity for IT providers. Zenith’s TigerCloud multi-tenant converged infrastructure enables SMBs to deliver hosted servers, Desktop-as-a-Service and Disaster-Recovery-as-a-Service. Learn more at www.zenithinfotech.com or email [email protected].

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