I had another meeting with a peer and as we are discussing Outsourced CIO, LLC (OCIO), he says to me: “Sounds like you have a lot of competition with vCIO services.” After I bite my tongue and make sure my face is not showing the internal wince I feel. I take a deep breath and think through how I have been handling this objection head-on. Each person is different and each business owner has a different epiphany when they understand that I am not in competition with anyone, especially other IT companies.
Let me explain what I mean. There is a difference between Account Management and vCIO Services. Most MSP’s have what they are calling “vCIO” as an add-on to the current MSP agreement. The problem with this offering and branding is that it is not true vCIO services, it is Account Management.
The account manager’s objective is to make sure the client relationship is healthy, plus discovering new sales opportunities to capture more one-time project revenue and increase Monthly Recurring Revenue (MRR) through upgrades. Account managers tend to manage the account health and satisfaction loyalty. Most of the time it is about solving a technology-based problem related to the particular MSP’s offered services.
The account manager traditionally has more business acumen and commercial background and a corresponding lack of the detailed technical skills. When this service (vCIO) is an add-on, it is usually assigned to a technician. With no formal training, the technician is supposed to be the IT Consultant and maybe they are provided a few “templates” for account reconciliation or reports they are providing but it still accounts management. Without any hours or specifics regarding those services, what ends up happening is the MSP starts to lose money due to not quoting the vCIO services properly. Further the “IT Consultant” is under the false impression they are having business conversations with their clients when in actuality they are having technical discussions.
At a previous company that offered vCIO services, there were no boundaries on “vCIO” services. This tended to cause problems because this “fuzzy” offering also was “fuzzy” for the customer and the result was the customer did not understand the value, time, or costs involved with some requested services. They also assumed because it was “technology related” it was included. Further, we mixed sales with consultation. Consultation became “free” in the customer’s eyes because there was no definition of these services. Consultation services solve problems instead of giving free advice and require time, commitment, and discovery. Further, we used to mix project management with implementation. There is a difference and they are separate services. Because of no clarity, definitions, and alignment, there is also a lack of process. This becomes apparent when providing project management services without formal training or specific industry best practices and tools. When I left that company, I was spending 60-80 hours a week trying to care for 24-customers who had been sold an “add-on.”
The differentiation between “account management” and vCIO services is clearly seen using contrasts to my previous experience with the kind of services that OCIO offers regarding vCIO services. OCIO acts on the changing needs of the client. We create boundaries with a mapping which is essentially mapping out the clients different IT Management needs with specific services and boundaries to reduce the often assumed “this is included.” OCIO’s vCIO services are also based upon and correlated against current industry standards and best practices as well as customization per client. With OCIO, Project Manage is a product. Having formalized training with Project Management (PMP or Project+) is essential so that clients are educated about the value of a well-rounded project and project management is key. Because of this industry standard and best practice (Project Management), customers are included in the process and communication is continuous. Finally, the difference between account management and OCIO’s vCIO services is that we have well-crafted packaging of the services. We use audits, assessments, and discovery to ensure it is aligned with the business strategy of the customer, not the MSP. This includes development roadmaps and solution stacks specific for the client rather than ad-hoc or reactive IT. Another peer, who might have been called my “competition” laid it out this way. “You are not in competition with us because you offer 3rd party non-partisan c-level services dedicated to the business, not the vendors.” I liked what he was trying to say.
On that note, we work closely with IT Companies. The ones that get customer service, OCIO and its vCIO offerings can have a synergistic relationship with our clients and verticals. Recently when we were auditing a couple of customers who were working with a local MSP, we (OCIO) discovered that they were charging the client for backups they were not using, although paying for vCIO, they were not receiving these services, and the last time an audit was done on their subscriptions and users was over a year and the client was paying for 7 users they were not using. OCIO gave the local IT company the opportunity to “do the right thing” but instead of being teachable, faithful, and accountable, they dropped the two customers like a hot potato. We think it is because they felt “threatened” that the businesses had gone with a 3rd party non-partisan who was not them. I am familiar with many MSP’s locally and nationally, and we have found ones that pick up the ball and run with it. They accommodated last minute hosting changes when a vendor changed the requirements in the 11th hour, they consistently had integrity, honesty, and communicated with me and the customer. They pick up the phone after a couple of emails back and forth with the client and are proactive to call the client when service requests come in. They don’t close service request tickets until it is confirmed with the customer that the service request is complete. Another “differentiator” with a great MSP is the ones that OCIO works with have national NPS ratings over 75% and work through a Master Agency/Channel. This right off the bat reflects a consistency of service, reliability of services, and exceptional customer service otherwise they would not be in the channel. Companies like this are not in competition with OCIO, they are partnered with us and our customer’s benefit. By the way, we also saved those two businesses over $500 per month in service agreement monthly costs they were paying with their previous provider and the quality of the services is 110% better (testimony from the businesses themselves).
Does OCIO have a lot of competition? No, currently no one is offering these types of services in a standardization or consultative way in South Carolina nor the surrounding states…yet. Designing services with clear outcomes crafted in a best practice and industry standards are our differentiator. Let us see if we can assist you with getting a competitive edge with your technology and align it with your business strategy through an orientation consultation today. Who knows, we might even be able to save you some $$$ with your current vendors.