In the last few months I’ve spent a lot of time on the road, at events and visiting with countless VARs, MSPs and other technology solution providers. And, I can tell you first hand that this is an industry in motion! As technologies and markets evolve, solution providers are carving out their own unique market segments, areas of specialization and core competencies in order to compete and grow their businesses. Here's a closer look at the strategies plus seven keys to your continued success.
The variety of strategies and business models is impressive, and it seems that providers tend to differentiate themselves along 4 primary lines: Vertical Markets, Solution Technologies, IT Business Models and Geographic Markets.
Take healthcare for example. In recent years, dramatic changes in medical technologies, new regulations like HIPAA and changes in demography have created unique opportunities for providers that specialize in end-to-end solutions for doctors, hospitals and insurance companies. The same can be said of numerous other industry verticals – Gov/Ed, Finance, Legal, Manufacturing, Construction, SMB and so on.
Of course, there is always a place for businesses that develop unique expertise around specific vertical technology sets. Retail/POS, VoIP, Unified Communications, Storage/DR, Data Centers, Accounting/Finance, Human Resources, and ERP systems are just a few examples of vertical products and services that can be delivered across a variety of vertical industries and business types. Becoming expert in end-to-end solutions in any of these areas is another effective way to differentiate your business.
IT Business Models
Even if you don’t focus on specific vertical industries or technologies, odds are you’ve ‘tried on’ more than a few business models to see which worked best for your company. (I suspect this is especially true for readers of this blog.) From straight time-and-materials and break-fix, to pure-play managed services, to product-centric resellers, to retained IT consultants, fixed-fee solutions and everything in between, outsourced IT professionals have created and adapted business models to successfully address the unique demands of the clients they work to attract.
For most of us, geography is one of the fundamental ways we differentiate ourselves from the competition. Your ability to focus locally, regionally, nationally or globally depends on your specialization, unique expertise and your desire to build and leverage partner networks. In more densely populated urban areas, numerous providers successfully leverage the proposition that they are hyper-local and accessible. Conversely, providers who offer truly unique value in one or more highly-specialized verticals may have clients stretching from coast to coast and beyond.
Master the Basics to Win
Regardless of specialty, market or business model, every solution provider needs to engage in a series of common, fundamental business processes, including:
- Identifying Prospects
- Assessing Needs
- Creating and Selling Solutions
- Delivering/Implementing Products and Services
- Billing/Invoicing Products and Services
- Managing the Ongoing Relationship (Client Retention)
- Using Expertise and Good Will to Attract New Clients (Referrals/Acquisition)
So, as you consider ways to leverage your special skills and knowledge to compete more effectively, don’t forget to take a good look at the basic processes and systems you use to manage your business. If you find weak areas or holes in your processes, take the time to fix them. In the end, the payoff will be well worth it. There are a number of purpose-built tools available to help you – Autotask software is one. Just remember that regardless of how you choose to compete in an increasingly commoditized and crowded marketplace, if you master the basics you’re more than halfway there.
Bob Godgart is the CEO of Autotask Corp., developers of Autotask hosted professional services automation software, the VARStreet family of advanced quoting and e-commerce tools and Taskfire a hosted service desk and ticket management system sold by IT solution providers for businesses of all sizes with internal IT resources. Monthly guest blogs such as this one are part of MSPmentor's annual platinum sponsorship. Read all of Godgart's guest blogs here.