I’ve loved business for as long as I can remember. Sure, I went through the Police Man / Fire Fighter / Astronaut phase in my early years, but ever since the ‘what are you going to be when you grow up?’ question started getting serious, I’ve wanted to work in business.

It’s exciting to me that someone can take an idea, apply expertise and resources, and build a company which has the potential to create jobs, generate a return for shareholders, and contribute to the economy.

I often find myself trying to understand other businesses, and business models. One way I do this is by asking the question ‘So, how do you make money?’ The answer can reveal a lot about the value proposition to the customer.

For this month’s blog, I want to compare two models of technology support businesses: Traditional (Break/Fix) and Managed Services, look at how each model generates profits for the service provider, and the implications for you, the client.

A traditional support provider charges for support on an hourly basis. Sometimes, there is the option to pre-purchase blocks of hours at a reduced rate, but the underlying logic is the same. A Managed Services provider (like 365) charges a fixed rate per month based on the size of a client’s network (workstations and servers), then includes all support, proactive management, Anti-Virus, Anti-Spam, Backup, and technology consulting.

At a very basic profit & loss level, the models look like this:


There is one key difference I want to focus on: support hours. Under the traditional approach, support hours are a revenue driver. For a traditional service provider to grow their business and be more profitable, they need to increase a) the number of issues their client base is having; and b) the amount of technician time those issues take to fix.

Under managed services, support hours are a variable expense. For a managed services provider to grow their business and be more profitable, they need to decrease the number of support hours required by their client base. How? By ensuring that client networks are stable, well-maintained, and reliable.
We’re admittedly biased, but we think a model that rewards network stability rather than network problems is a model that is better for our clients.

So, how does your technology support provider make money? Are they profiting from your problems? Does their business model align with your technology goals?

Tags Managed Services  Business Talk 

Posted by Michael Anderson at 12:00 AM 0 Comments

 

It’s early into the New Year, and you’ve no doubt already heard many mentions of the Mayan prediction that the world will end at the close of 2012. Whether you believe the prediction to be true, or that the Mayans simply ran out of room on the rock, there is something to be learned from this apocalyptic warning.

Studies show us that most small businesses are not equipped to survive a major disruption to their business systems - which means they are at risk of an 'end of the world' event each and every day.

In 2011, 365 met Winnipeg businesses who have experienced:

- Complete site loss due to fire
- Prolonged power outages
- Server and data loss due to theft

While the likelihood of these events is admittedly low, their impact can be catastrophic. In fact, many businesses don’t recover.

So, the question becomes where to start? Let’s assume that your business already has a backup plan in place (if not, we can help) what extra steps are needed to develop a disaster recovery plan? Here are 3 suggestions:

1. Identify your Essential Business Data


Ideally, businesses should be protecting all of their data. In practice, some data is more important than other. Identifying mission critical information, and protecting it, is an important part of any disaster recovery plan. For example, while some data may be backed up on a daily basis, a system that receives multiple updates throughout the day (such as an accounting application) may benefit from a real-time solution that sends updates to an offsite location several times daily.

2. Identify your Mission Critical Systems

If your business system became unavailable due to a disruption or loss, what would be the first things you would need access to? Email communications? Financial System? Another critical business application?

Where do these systems reside today? Are there contingency plans in place? How quickly could access be restored?

3. Know your Downtime Tolerance, Business Needs, and Budget

There are many options available to businesses to protect their business systems. Generally speaking, the cost of these options increases with the level of protection. Your specific disaster recovery solution will depend on your business, its specific needs, your tolerance for downtime, and your budget – all things that need to be discussed before looking at solutions.

As a starting point, take our 2 question disaster recovery quiz.

While we fully expect the world to still be here a year from now, we hope you’ll take advantage of the year ahead to protect your business from an ‘end of the world’ event.  If you would like a consultation on starting your Disaster Recovery planning process, we would be happy to help.

Tags Disaster Recovery 

Posted by Michael Anderson at 12:00 AM 0 Comments

 

"What's your hourly rate?"

It’s a question that we get asked frequently as we meet with business owners. We understand – people want to know what a service costs, and need that information to properly evaluate what is being offered. Used in conjunction with other evaluation criteria, price is an important thing to know. However, when price becomes the only factor in a purchase decision, we risk reducing the product or service being considered to a commodity.

Commodities are homogenous, interchangeable goods or services – lacking differentiation. When making a commodity purchase decision, price IS the only criterion. For some companies, technology support has become a commodity. Their view of IT services sounds something like this:

“Network support companies are all basically the same. I call when there’s a problem, a technician comes out to fix it, and they charge me an hourly rate for their time.”

If this is true, then price really is the only thing to consider. However, we think there are some good reasons why IT services don’t fit into this category. Here are 3 to consider:

1. Results vary

This is the single biggest indicator that IT service is not a commodity. The results being achieved by businesses vary significantly. As we speak to businesses, we see a wide range of server health, data protection, and network uptime. Many businesses that we meet with tell us they’re doing ‘fine’, when on closer inspection there are any number of ‘ticking time bombs’ with the potential to cause major business disruptions.

2. Changing isn’t free

Unlike commodities, which are interchangeable at a low cost or no cost, changing IT service providers isn’t free. The cost of a new provider learning your network environment, re-training your users on how to get support, and undertaking the necessary security precautions are all costs incurred by you, the client.

3. Cost of failure is high

IT service providers occupy a unique trust position with their clients. Not only are they tasked with keeping the company’s key systems up and running, their administrative access gives them access to your most sensitive data. All networks support companies may ‘look’ the same, but selecting the wrong company to entrust with your business systems can have significant negative impacts for your business.

So if price isn’t the only consideration, what should companies be looking for in a technology management company? Our 5 questions to ask before the handshake is a great place to start!

This is our final blog post for 2011. From the team at 365, we wish you and your family a Merry Christmas, with health and happiness for 2012. Thanks for reading!

Posted by Michael Anderson at 12:00 AM 0 Comments

 

There is a new movie out right now called Moneyball, and starring Brad Pitt. It tells the true story of Billy Beane, the General Manager of the Oakland Athletics baseball team in 2002. Faced with the departure of some key players, and a low budget, Beane begins to challenge the prevailing wisdom around indicators of player performance. Instead, by applying rigorous statistical analysis (called Sabermetrics), he begins to uncover better indicators of a player’s offensive success. Armed with these new metrics, Beane is able to find players undervalued in the market, and puts together a competitive team with a fraction of the money of his competitors.

Is there a lesson here for your business, and your technology support? Absolutely.

When we talk to companies working with a traditional, reactive support company, they often speak of their vendor’s performance in terms of response time. While responsiveness is an important element of delivering technology support, it is not the best indicator of optimal technology management. Rather, we need to focus on metrics that are results-based. For us, this means 2 things:

1. Uptime. Are we achieving a high level of system availability?
2. Employee Productivity. Have we successfully removed technology management from internal employess and freed them up to focus on value-added work that drives business performance?

It is impossible to achieve good results on these 2 metrics simply by being responsive in a reactive support role. Achieving high uptime levels, and ensuring improved employee productivity requires the application of a comprehensive approach to service delivery, and one that incorporates proactive network management.

We recently gave some of our clients the opportunity to talk about the results they have seen working with 365 Technologies as their IT department. You can see what they had to say here: 365 Results

"Our network is never down"

"We're able to get back to the business of great design"

"We have more time to focus on delivering excellence to our customers"

How are your results? Are you focused on the right things, or is a different approach needed?

Tags Results  Performance  Uptime 

Posted by Michael Anderson at 12:00 AM 0 Comments

 


365 Technologies has been active in the Winnipeg market for just over a year now. Next week, we’ll take some time to thank our clients, partners, and friends at an appreciation night.

It’s funny – things never quite turn out exactly as you expect, and this past year has been full of learning opportunities as we set out to change how technology is managed for small and medium-sized (SME) businesses in Winnipeg. In the past 13 months we’ve spoken to hundreds of companies, and met face-to-face with over 100 decision makers. Here are 3 lessons that stand out from those conversations:

Lesson 1: Poor technology performance is too easily accepted

As we’ve taken the time to understand their respective businesses and the role that technology plays in supporting their growth, we’ve been surprised at what owners consider to be ‘ok’ when it comes to their IT. Slow computers, unprotected servers, uncertain backups, and cumbersome workarounds to name just a few. The reality is that there are few other areas in a business operation where this performance level would be accepted - not from employees, suppliers, or accounts.

This doesn’t have to be the case. Today, solutions that were once restricted to large enterprises are fully available to small and medium sized businesses. Cloud-based service delivery models allow companies to benefit from enterprise-class solutions under a monthly subscription, saving significant upfront hardware investments. Where hardware is required, manufacturers are increasingly offering solutions targeted to the SME market. Having a network that is robust, reliable, and budget-friendly is entirely possible.

In the same way, companies have settled for less-than-ideal support from their IT service providers. Slow response times, erratic billing, and a reactive approach to technology management are widely accepted. We believe Winnipeg businesses can do better.

Lesson 2: There’s a LOT of data still at risk

We’ve posted some of our data loss horror stories here previously. While the businesses we meet with unanimously understand how vital their business data is, we still encounter companies weekly whose data is unprotected, and who stand to experience significant business disruption if a data loss occurs. We believe that this is the single biggest issue facing small businesses, which is why we’ve talked about the business risks involved, and the need for building strong routines.

Lesson 3: A different understanding of IT costs is needed

It’s never easy to convince people to look at something differently. When we talk to prospective clients about their IT costs, they inevitably refer to the bills they receive from their current break/fix service provider – and we are almost always more expensive. It is only when we start to look at the impact that technology has on employee productivity that a truer picture of IT costs comes to light. Downtime, productivity loss from slow systems, and use of internal staff are all elements that need to be considered when evaluating a company’s support costs.

It’s been a great first year! If you’re already a 365 client, thank you – we look forward to a continued partnership that supports your company in the pursuit of its goals. If you’re not, we hope this blog continues to bring you valuable insights, and we welcome the opportunity to work with you.

Posted by Michael Anderson at 12:00 AM 0 Comments