by Dave Sobel | 12/29/14
With the year-end approaching, it’s time for analysts (and guys like me) to make our predictions for 2015. It’s a time-honored tradition, as the end of one year and the start of another feels like a great time for us to be gazing into our crystal balls.
Interestingly, from a technology perspective, the change of year can be as insignificant as the single change of a digit. Will mobile be less important in 2015? What about cloud and convergence technologies? In some respects, 2015 will be “more of the same” as it will build on many of the trends and innovations we saw in 2014.
Of course, some things don’t require finally honed divination skills. As Daniel Burrus so eloquently wrote in the book Flash Foresight, many trends are easy to predict. Processors will be faster, chips will be smaller, batteries will last longer, and bandwidth will get faster and in more places. There are many trends that we know, despite the feeling of uneasiness we often experience when thinking about the future. In fact, many of the most successful businesses are built by making these observations and anticipating these trends.
Over the past year, MAXfocus performed a research study around how to help solution providers prepare, predict and take advantage of coming trends, and we released this business model as “The Perpetually Valuable MSP”.
The first common theme we identified is a need to track leading indicators of change and predict the impact those changes may have on customer spending behaviors. Forward-looking information is, by definition, imprecise and constantly changing; so MSPs cannot wait until there is “proof” that conditions have changed. Instead, leaders of MSP organizations need to have a plan to evaluate the status of factors inside and outside of customer control and make educated predictions about their impact on the MSP opportunity.
We examined exactly the kinds of trends that these MSPs must have the ability and discipline to track the status and implications of, and found that they fall into three categories:
Category 1: External Factors
· Economy: How do changes in the national/regional/local economy affect customers’ ability and willingness to spend on IT solutions and services?
· Competitors: Are there new competitive offerings available to customers that provide better value and would require changes to services, prices, etc.?
· Industry: How do conditions in your target customer’s market segment affect their priorities for buying and using specific technology solutions?
Category 2: Internal Factors
· Resources/capabilities:What changes to your internal resources could affect your ability to deliver current solutions or adopt new solutions?
· Capacity/financial position: How does your current financial health affect your ability to acquire resources, make investments, and appear healthy to customers?
· Strategy/objectives:What is your attitude about investment, growth, and change, and how open are you to changes based on your short-term and long-term goals?
Category 3: Customer Factors
· Internal resources:What changes to your customer’s internal IT and business resources might affect your relationship and their willingness to spend on your services?
· Financial position:How does the customer’s financial health affect their behavior with regard to IT solutions and services, and what would cause those changes to occur?
· IT /business strategy: Do your customers see IT solutions as a strategic investment for advantage, as a normal element of current business operations, or as a necessary but unpleasant expense?
All of these factors affect your ability to engage with customers and deliver value, but none of these factors is inherently positive or negative. In other words, your goal is to determine the current conditions regarding each of these factors and track changes – for better or for worse – and determine whether you need to adjust your business strategy. For example, the economy could improve, which may allow you to introduce new offerings or increase prices. Alternatively, the economy could decline, which may require you to streamline operations or reduce prices. There is no “ideal” set of conditions that are required for an MSP to succeed; your goal is simply to adapt your strategy according to these conditions and present the most appropriate offering to your customers.
One of the best practices we outlined in this research is a change in the way planning is done. Rather than focus on year-long plans, those MSPs that are most able to respond instead focus on rolling forecasts and plans, thinking about the next quarter with a vision to a plan beyond.
Thus, instead of predictions for 2015, I would encourage solution providers to forgo thinking about things yearly, and instead use the above list of questions in a quarterly planning process, each time reviewing and making intelligent decisions about the coming quarter and include a vision for the rolling 12 months. This approach, not constrained by an arbitrary date change, moves solution providers forward, ensuring they remain Perpetually Valuable ongoing.
Dave Sobel is responsible for fostering the growth and success of GFI MAX Partners. As director of partner community, he helps promote collaboration, education and innovation among GFI MAX Partners and among the industry as a whole, ensures they have access to business, technology and market resources, and are utilizing the MAX Platform to achieve positive growth, enhance their offerings and become best-in-class solution providers.