At a trade show last week, I ran into an old colleague of mine, Clint Harder, an independent consultant with the Corvid Group, a consulting firm that works extensively with MSPs. Clint mentioned how he often sees that hiring outside experts is often not a priority or a budgetary option for many early-stage MSP executives. He then outlined how MSPs often hit a wall when it comes to growth. To overcome that wall, here are six traits to look for in a consultant or coach who seeks to assist your MSP business performance.
First, a bit more about the challenges: What many executives find is that to scale past a certain plateau, they need to invest in the business, doing things like embracing ITIL, building automation, ramping capacity, and more. Often, it is the companies at this stage that realize a keen need to get help from outside consultants.
As the MSP market continues to expand and mature, more organizations are starting to reach this point. The fact that, as Joe Panettieri mentioned in his recent post, there are several new consulting firms entering the MSP space, speaks to the way the industry is expanding, and the increase demand for consulting services that’s arising as a result.
Note, both in the MSP segment and across the IT market more generally, the definition of “consultant” has grown very broad, encompassing everybody from an executive brought on as an interim CEO to an engineer who's hired to do a SQL Server install. For the purposes of this article, I’m defining consultants as more strategic in nature, more focused on advising than doing. For example, a sales consultant could be brought in to help bring in near-term revenue, or to help optimize the existing sales team’s processes, skill sets, and approaches. Here I’m talking more about the latter than the former.
Now, Those Six TraitsFor businesses that have reached a point in their evolution in which bringing in outside help makes sense, here are six key points to consider when assessing potential consultants:
1. Real, Proven MSP ExperienceAn industry as dynamic and growing as ours is bound to attract all types of consultants, whether they have managed services experience or not. Does your consultant have real world experience, and demonstrable success, within managed services? Whether a consultant is being brought in for sales, operations, or virtually any other discipline, managed services experience is vital. While this may seem obvious, it’s a critical ingredient for success.
For example, there are significant differences between IT project work and recurring IT services. Practically and strategically, it’s very different to deploy something and walk away, as opposed to building something that you’ll be responsible for maintaining on an ongoing basis. A technical expert may have years of experience managing Oracle databases, but without managed services experience, they may not have a clue about portals, service catalogs, and a host of other areas that are an essential part of the managed services landscape. Similarly, selling these recurring IT services takes a very different approach and skill set than selling most any other service or product.
For consultants to offer real strategic value, there’s no substitute for them having a real managed services track record.
2. Technical KnowledgeWhile your consultants do not have to be network engineers or sysadmins, they should know the difference between a router and a switch, understand the difference between production and development environments, and have a general understanding of the IT technology stack.
That is true for a host of potential roles that consultants can fill. Marketing deliverables need to resonate with technically savvy readers. Sales approaches need to be based on an understanding of the technology environments of prospects. Business plans need to be built on an understanding of rapidly changing technology shifts. In the end, this business is about managing technology, and if your MSP consultant does not have that knowledge, what value can they really add?
3. IT Operations KnowledgeSimilarly, a good MSP consultant has experience with different monitoring and reporting tools, operational management tools (i.e. help desk), and operational processes and staffing.
If consultants are to be brought in to optimize operations, they need to be able to decipher what services are included as part of a fixed rate, and which are add-on charges. They need to understand the roles and responsibilities of higher cost technical staff, and provide insights into what activities may be offloaded to lower cost staff. They need to have insights into what can be automated, and what can’t.
You would certainly expect a manufacturing business consultant to have knowledge of assembly lines and process controls. MSP consultants should be held to a similar standard.
4. Business SavvyDoes your MSP consultant understand your targeted customers’ technical and business needs? More importantly, do they understand your business needs?
The best consultants are ones that can map underlying technical environments to business value and strategies. They can look at how customers have been acquired and identify the patterns that are critical to building repeatable, efficient sales revenues. They can compare what top performing sales reps are doing to what those that continue to miss quotas are doing, and establish key best practices that can boost results across the board. They can help shape the target markets that an MSP pursues, and which it won’t.
Do not underestimate the value of business sense in your MSP consultant. With it, their services can be invaluable. Without it, a lot of time and money can be invested in efforts that yield little return.
5. FocusVery few consultants can improve your sales and marketing materials, help define your service catalog, and fully implement your monitoring system from scratch. Beware of consultants who bill themselves as a jack-of-all-trades that can do all of the above. Instead, start with a focus on your key objectives for the upcoming consulting engagement, and choose the person who’s most closely aligned with that area. Look for both a strategic focus on that area and a track record of success, and choose accordingly.
6. ReferencesThe managed services community is a small world. It should be easy to check up on a prospective consultant. Check their references, and check the qualifications of their references. An hour invested before engaging a prospective consultant can save you tens or hundreds of hours, not to mention thousands of dollars, down the road.
Best PracticesOnce you’ve decided on the right consultant to work with, here are a couple suggestions for engaging with consultants to realize optimal value:
- Start with a focused engagement and clear scope to get to know the consultants capabilities, performance, and potential value to your business.
- Negotiate (and pay for) some retainer hours after the project. It can be very useful to have a consultant on-call to help with specific issues and customer opportunities after the initial engagement is complete. Set up a monthly or quarterly retainer so that you can get a quick response to inquiries when they arise.
Phil LaForge is VP and GM, service providers at Nimsoft. Monthly guest blogs such as this one are part of MSPmentor's annual platinum sponsorship. Read all of Nimsoft's guest blogs here.