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19 September 2018

Great businesses need smart people and smart tools

A Passion for Excellence

Empalis Consulting GmbH, based in Stuttgart, brings its deep expertise in IT infrastructure to businesses across Germany. With a rallying cry of “Perfektion geht nur gemeinsam” (Perfection only works together), the team has an attention to detail which is extraordinary, even by German standards.

Known for its breadth and depth of expertise in data storage and protection, the company has a loyal following; it regularly welcomes over fifty participants to its famous “Noon-to-Noon” storage briefings. I recently attended one of these briefings and was impressed by the level of engagement between host and delegates.

Searching for perfection requires constant innovation. This has led Empalis to design and develop a new product range, called Empalis Service Plus. The management team at Empalis realised, that despite having a large team of data protection specialists, they could not be with all their clients as often as they would like. Empalis Service Plus allows the team to provide a continuous delivery of exceptional customer service.

Data Protection is not a part-time gig

As the value of data to a business increases so does the responsibility of ensuring it is always available and protected. Threats, appearing from anywhere across the globe and at any hour, drove Empalis to find a better way to stay closer to their customers. Much closer than the eponymous bi-annual health check. This led them to design Empalis Service Plus, powered by Predatar.

As Markus Stumpf, Technical Operations Director of the Empalis Service Plus team, said; “our primary purpose is to provide confidence and peace of mind; to free the customer so they can focus on their core business.”

Empalis’ development of its tiered packages will place it in the vanguard of companies capable of responding to increasing cloud adoption, enabling it to on-board clients needing managed services very swiftly.

A 5-Star Service

Staff at Empalis can already see how customers are using Empalis Service Plus to improve service levels. Markus Stumpf sees increased customer engagement when using the new service. As one client recently said;

“we no longer see Empalis as an extended partner but as part of the team”.

Frequent flyers know that aircraft manufacturers have sophisticated telematics to constantly check the health of their fleet. This level of protection has contributed to the dramatic rise of air travel safety. For many businesses, data protection is also a life and death matter, which is why Empalis’ new product is nothing short of a revolution in customer care.  Customers know the Empalis team are constantly keeping an eye on their systems for any sign of trouble and applying their own telematics for greater insights.

Changing Cultures

In 2019 Empalis will celebrate its thirtieth anniversary. As well as having a loyal customer base, the company enjoys a strong sense of community within the organisation.

Empalis Service Plus is more than a new product. It is at the core of a new people strategy which prepares the business for the future. Its leaders recognise that whilst they have been the beating heart of the business for many years, a succession plan is essential to bring in new people with new ideas.

Especially in Germany, which is known for its tight labour market and ageing workforce, having more recruitment options is vital. Empalis Service Plus has allowed the company to hire engineers who are not prepared to travel and bring on new talent, whilst also increasing customer responsiveness.

Alina Mot, the recently promoted CEO of Empalis, had this to say;

“Empalis Service Plus has given our business a new direction and new sources of revenue, which makes the future very exciting.”

Empalis is not standing still. The new CEO is navigating the transition from traditional consulting to modern service delivery.

The Predatar team are proud to support this programme to help ensure the company remains highly relevant, for many years to come.

 

 

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02 September 2018

Why all IT services are not the same

For the original value-added resellers, professional services were a means to sell more product. In some cases, product-attach services were even given away to facilitate closing large infrastructure deals. The customer was saying, “look, you want to sell us this stuff, so you should be here when it arrives. Oh and while your here you can install it”. The margin was in the resale of the product, so it was the equivalent of a car salesman throwing in a set of foot mats; a closing tactic.

As margins in product resale have declined, VARs have been on a journey to monetise their technical expertise. The journey started with professional services and progressed to managed services in a bid to build recurring income. Whenever business models change, there are unintended consequences. These require board-level decisions about how best to structure and operate the business.

For example, if VARs want to place their star technical engineers into a profit centre, should that extend to charging for presales work? If the VAR is more reseller than service provider, should the presales fee be waived to help win a big deal? With the introduction of managed services what is their relationship with the professional services team? Who should own the primary contact with the customer?

Let’s look at four areas where the VAR must adapt to meet the challenge of becoming an MSP: Organisation Structure, HR, Billing and Scaling-Up.

Organisation Structure

Originally, technical engineers were aligned to the sales division as presales engineers. When services needed to be commercialised, a new and separate division was created, then another, just for managed services. Each division had its own incentives and goals, as well as different business tools to help them do their job. This division of labour was great for making everyone accountable but not so good for presenting a unified experience with the customer.

The general trend in the channel today is one towards a flattening hierarchy so that data and information about customers can be shared across the business. As revenues flow from product sales to managed services, technical teams may have the most customer touch points. When this happens, who should own the primary relationship with the customer?

The increasing adoption of SaaS computing models has seen a hollowing out of the sales function into new business functions. One team “lands” the deal while another, customer success, is responsible for on-boarding, adoption and renewal. As the VAR becomes more MSP-like, the model is less about product-attach services and more about long-term operational run.

Breaking down organisation silos is tough but imperative if you are to compete in a world of increasing automation and AI.

Services Billing

In the cloud era, especially in B2C, many services are free to the user. Subscribers who pay for a service certainly don’t expect to be charged for set up and configuration. In the B2B enterprise world, channel CEOs expect a return on highly-paid technical engineers, so they install professional services software to track their utilisation. Time must be accounted for, so every day is billed on a time and materials basis.

There is a customer backlash against this as they increasingly expect to be billed on value and outcomes, not time. More progressive channel players, confident in their capability, are turning to fixed price contracts. CSPs like Google and Amazon Web Services go one step further, they never mention the cost of labour. Their massive scale is achieved through automation, propelled by artificial intelligence and machine learning.

Like Uber, who could never control millions of taxi drivers with a room full of people armed with 2-way radios, IT services will be increasingly automated. Every successful company is now a technology company, regardless of industry.

The managed services model with outcome based, pay-as-you-use billing, is more aligned with the needs of customers who want to align IT expenditure with value and measurable ROI.

Scale and Efficiency

One of the great things about professional services is the amount of trust and understanding which can be built between the VAR and its customers. When a client feels confident you really know their environment they are less likely to shop around. In that regard, a great professional services team can build tight relationships and foster loyalty.

On the downside the people with both the technical and consulting skills are in high demand, causing wage inflation. Neither can they be everywhere at once and are most often placed on the highest producing accounts. As an organisation adds consulting resource, revenue can grow, but only linearly. Onsite visits build close links, but travel time limits the reach and efficiency of the team.

A managed service model is a different dynamic. The people who deliver the service are often remote which can make it hard to build such tight relationships. However, if modern communications can bridge the relationship divide, then the economic model for an MSP can be much more scalable. Shared resources, both people and infrastructure, help service providers achieve much greater economies of scale, as well as geographic reach. Revenues can grow exponentially.

Using this model MSPs and CSPs disrupt the status quo and put consult-heavy organisations at an economic disadvantage. Most of the world’s largest outsourcers are currently shedding staff.

Training and Human Resources

With employer demand for tech talent routinely outstripping supply, companies with ambitious growth plans need to pay attention to the most efficient organisation models. A growing managed service team requires multiple roles and can be a great training ground for new talent. Platforms which can capture knowledge and diffuse it around a team can really help to accelerate skills development.

Whilst professional services are often very bespoke, managed services are built on processes and platforms. The difference between a small pizza delivery business and Dominoes is the process used and process is driven by technology. If you want to scale your managed services business, you need to design the right process first.

It’s important to realise that the successful transformation from VAR to MSP requires executives to make decisions about organisational structure, business focus and revenue models. Predatar provides great software on which to build your managed services portfolio as well as consultancy to guide you through the transformation.

To find out more please drop us a line at info@predatar.com

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