Grow Your Revenue and Profits Through Managed Services for ...

Grow your revenue and profits through managed

services for a work from anywhere world

Jan 28th, 2021, 11-12 Eastern

New readiness series! Accelerating growth

with M365 Business PremiumAccelerate your growth and profitability

through deep dive readiness on building

profitable managed services with M365BP

✓ Practical guidance on developing managed

service offers

✓ Real world examples from Industry experts like

Paul Dippell, Alex Fields, and MSP peers

✓ Deep dive technical training with Microsoft Experts

✓ Sales and customer conversation tools training

✓ Panel of experts helping answer partner questions!

Save your spot:

https://aka.ms/AccelerateWithM365BP

https://service-leadership.com/about/


Meet the experts

Neha Bhaskar

Sr. Product Marketing Manager, Microsoft 365 SMB

Paul Dippell

CEO, Service Leadership Inc

Mikko Saarto

Country Head, FinlandOffice Management

Tim Sinclair

Principal Product Manager, Microsoft 365 SMB Engineering

Jon Orton

Director of Product Marketing, Microsoft 365 SMB

Our presenters Our Q&A experts

David Bjurman-Birr

Security Architect, Microsoft

Download the Workbook for this webinar: https://aka.ms/SLIWebinarWorkbook

https://aka.ms/SLIWebinarWorkbook

Accelerating

growth for

SMB IT Partners –

Opportunities

76%SMBs are adapting and

enabling remote work1

184%expected surge in video

collaboration2

90%SMBs would consider hiring a

new MSP if they offered the

right cybersecurity solution3

85%of MSPs see security as biggest area of

growth in the next 12-18 months4

Sources: 1. AMI | Business Survey 2020: the impact of COVID 19 on SMBs in the USA June 2020; 2. Techaisle | US SMB and Midmarket video collaboration adoption March 2020; 3. Microsoft Internal Research 2019; 4. Channel Futures | 2020 MSP 501 Full Report

https://www.analysysmason.com/research/content/reports/covid-impact-smb-survey-rdmz0/#:~:text=Business%20survey%202020%3A%20the%20impact,on%20SMBs%20in%20the%20USA&text=Analysys%20Mason%20surveyed%20over%20400,it%20to%20change%20in%20future.

https://techaisle.com/blog/398-us-smb-midmarket-video-collaboration-adoption-may-increase-by-184-percent

https://www.channelfutures.com/msp-501/2020-msp-501-full-report

Microsoft 365 Business PremiumComprehensive security and productivity solution, designed for businesses with 1-300 employees

Collaborate in real time

Enable remote access and protect identity

Defend against cyberthreats and data loss

Easily secure and manage devices

”Having a best-in-class platform like Microsoft 365 addresses multiple challenges in one go, something

that was missing earlier. Today, I can say that we have all the tools in place for significantly improving

business productivity and collaboration while providing a much higher level of security.”

—Praveen Vashishta, Chairman and CEO at Howden India

https://customers.microsoft.com/en-us/story/812792-howden-insurance-brokers-insurance-microsoft365

Create ongoing value for you and your customer

Microsoft 365 Business Standard ($12.50)

Office apps and services, Teams

Microsoft Defender for Office 365

Intune

Azure AD Premium Plan 1

Azure Information Protection Premium P1

Device Antivirus

Autopilot

Windows Virtual Desktop license

Windows Upgrade rights

Microsoft 365 Business Premium $20 per user per month

Secure your customers and

manage risk

Grow your profits through

Standardized managed services

Reduce operational cost

and complexity

SLI: A Best in Class managed services model

Total Profit Solutions for IT Companies™ | www.service-leadership.com

© All Rights Reserved – Confidential and Proprietary – Licensed Material – Confidential and Proprietary

Service Leadership Index®

The Service Leadership Index is the foremost

Solution Provider benchmark worldwide.



What is Best-in-Class MSP Performance?

9

Over 12 years, Best-

in-Class (top

quartile) MSPs

averaged 2.4X

higher EBITDA %

than Median MSPs.

• This is regardless

of where they

are, how big or

small they are, or

what customer

segments they

pursue.

• What matters is

Operational

Maturity Level™

or OML.



Operational Maturity Levels™

Higher Operational Maturity Level™ means increased ability to:

Drive accelerated performance | Maximize profit and value creation | Differentiate in the marketplace

Mitigate business risk | Drive accountability

OML™ABILITY TO EXECUTE A BUSINESS PLAN

OML 1OML 2

OML 3

OML 4OML 5

Basics of profit

levers, few

controls or

forward planning.

Don’t know

what you don’t

know. Largely

trial and error.

Basic controls.

Some forward

budget planning,

little attainment

tracking.

Robust controls.

Detailed forward

budgeting &

attainment

tracking. Comp

tied to

attainment.

Same as OML 4,

now extending to

LOBs adjacent to

IT at high

performance.

BEGINNING

EMERGING

SCALING

OPTIMIZING

INNOVATING

10



OML™ Progression of MSPs

11



▪ There are 39 Operational Maturity Level Traits that all high performing Solution Providers

master, spread across their Strategy, Sales, Service, Finance and Incentive Compensation.

Six OML Traits have the greatest influence on profitability and growth

12

OML Traits of MSPs

OML Trait What It Means Greater Maturity Means

Value Creation Strategy How much profit by when? Greater likelihood of

creating optimal stock value.

Target Customer Profile Who exactly are we selling & delivering to?

Faster time to market

Greater differentiation

Faster to add customers

Higher utilization of employees

Lower operational costs

Faster progress on your

Value Creation Strategy

Driving Technology

Standards

Every customer buys the same technology & my

fullest offer.

Cross-Selling Execution 100% of customers buy 100% of my offerings

(most of them, from the start of the relationship).

Selling the Pre-Contract

Assessment

Getting the customer to become a customer

(that is, pay us) sooner.

Vendor Management Fewer vendors with each providing the most

unified management within their segment of the

stack; deeper relationships.



13

Each OML Trait Has a Different ROI

ROI Weighting of OML Trait: Driving Technology Standards



14

Score Yourself on the 6 Key OML Traits

?

OML

Open the workbook: https://aka.ms/SLIWebinarWorkbook

Let’s see your OML in the six key OML Traits

and your steps to improve it.

https://aka.ms/SLIWebinarWorkbook



15

What’s Your OML Score and Priorities?

?

OML

Functional

Area OML Trait

ROI

Weight

÷ Your OML Score

(1 to 5)

= Weighted

Score Priority

Accomplish

By

Strategy Value Creation Strategy 3.0

Strategy Target Customer Profile 3.1

Service Driving Tech Standards 3.2

Sales Cross-Selling Execution 3.2

Service Selling the Pre-Contract Assessment 3.2

Strategy Vendor Management 2.5

Your Total Score (Range: OML 1 to OML 5)



16

Functional Area | OML Trait | ROI Weight

Strategy | Value Creation Strategy | 3.0 / 4.0

If we grow revenue and

profits each year, we’ve got a

good value creation strategy.

We know the amount of

stock value we want to

create, we know by when we

want to create it, and we

know how we’ll extract it.

Those owners who have a Value Creation Strategy, are most often the ones

who create material value for themselves. That’s because it gives you a

longer term trajectory against which you can plan, execute, measure and

adjust. It doesn’t matter if your Value Creation Strategy has you exiting in 1

year, 5 years or 30 years: just make one and revisit it each year.

Why

?

OML



17


Strategy | Value Creation Strategy | 3.0 / 4.0

Those owners who have a Value Creation Strategy, are most often the ones

who create material value for themselves. That’s because it gives you a

longer term trajectory against which you can plan, execute, measure and

adjust. It doesn’t matter if your Value Creation Strategy has you exiting in 1

year, 5 years or 30 years: just make one and revisit it each year.

Why

?

OML

Now, score

yourself from 1

(low) to 5

(high).

If we grow revenue and

profits each year, we’ve got a

good value creation strategy.

We know the amount of

stock value we want to

create, we know by when we

want to create it, and we

know how we’ll extract it.



18


Strategy | Target Customer Profile | 3.1 / 4.0

Good leads are hard to get.

Anyone who has budget for

what we do, we’ll sell to.


But, we sell only to a narrow

range of client sizes.

Across all sizes of customers, Managed Services can be sold well and

profitably. But a given MS operation doesn’t transport well to customer

sizes it was not originally built for. Higher profit, faster growing MSPs start

and stay focused on a narrow customer size range. Lower-performing MSPs

try to span too large a range of customers sizes, and suffer for it.

Why

?

OML



19


Strategy | Target Customer Profile | 3.1 / 4.0


Anyone who has budget for

what we do, we’ll sell to.


But, we sell only to a narrow

range of client sizes.

Across all sizes of customers, Managed Services can be sold well and

profitably. But a given MS operation doesn’t transport well to customer

sizes it was not originally built for. Higher profit, faster growing MSPs start

and stay focused on a narrow customer size range. Lower-performing MSPs

try to span too large a range of customers sizes, and suffer for it.

Why

?

OML

Now, score

yourself from 1

(low) to 5

(high).



We’ve forgotten why we

thought we couldn’t be fully

standardized across our client

base. We partner with vendors

who have the most unified

toolset possible.

20


Service | Driving Technology Standards | 3.2 / 4.0

It seems at least counter-

intuitive to require our clients to

be standardize from the start,

possibly suicidal. We use “point

solutions” tools that we

integrate.

The key to high quality, growth and profitability is minimizing technical

complexity. This enables: great customer and employee experience,

retention and referrals; high sales confidence; fewer and lower cost people.

Higher-performing MSPs get standards in place right away; lower

performing MSPs decide not to or haven’t figured out how. High-

performing MSPs leverage vendors who offer a unified toolset rather than

trying to integrate tools from the ground, up, themselves.

Why

?

OML



We’ve forgotten why we ever

thought we couldn’t be fully

standardized across our entire

customer base. We partner with

vendors who have the most

unified toolset possible.

21


Service | Driving Technology Standards | 3.2 / 4.0

It seems at least counter-

intuitive to require our clients to

be standardize from the start,

possibly suicidal. We use “point

solutions” that we integrate.

The key to high quality, growth and profitability is minimizing technical

complexity. This enables: great customer and employee experience,

retention and referrals; high sales confidence; fewer and lower cost people.

Higher-performing MSPs get standards in place right away; lower

performing MSPs decide not to or haven’t figured out how. High-

performing MSPs leverage vendors who offer a unified toolset rather than

trying to integrate tools from the ground, up, themselves.

Why

?

OML

Now, score

yourself from 1

(low) to 5

(high).



22


Sales | Cross-Selling Execution | 3.3 / 4.0

Sell whatever we can of our

offerings, to who we can.

We’ll get there somehow.

100% of clients buy

100% of our offerings; 70%

of the time right from the

start of the contract.

Your goals are in service are: high simplicity and low service cost. Your goal

in sales is to maximize revenue per customer. The top performers attain

these by getting every customer to look the same, and invest the most in IT

by selling to 100% of them, 100% of what they offer.

Why

?

OML

Example of follow-on

upselling: O365 to

M365BP, then adding

Azure.



23


Sales | Cross-Selling Execution | 3.3 / 4.0

Sell whatever we can of our

offerings, to who we can.

We’ll get there somehow.

Your goals are in service are: high simplicity and low service cost. Your goal

in sales is to maximize revenue per customer. The top performers attain

these by getting every customer to look the same, and invest the most in IT

by selling to 100% of them, 100% of what they offer.

Why

?

OML

Now, score

yourself from 1

(low) to 5

(high).

100% of clients buy

100% of our offerings; 70%

of the time right from the

start of the contract.



High Performing MSPs Sell and Installthe Full Stack from the Start

Assess Quote Signed

On-Board

Deliver Managed Services Refresh

Stabilize

SLA in Effect

Assess Quote Signed

On-Board


Stabilize

Gold Package

SLA in Effect

Assess Quote Signed

On-Board


Stabilize

Gold Pkg

SLA in Effect

Gold Package

Low

Operational

Maturity

Median

Operational

Maturity

High

Operational

Maturity

Note: “Gold Package” means your fullest MRR package.



High Performing MSPs Sell and Installthe Full Stack from the Start

Assess Quote Signed

On-Board


Stabilize

SLA in Effect

Assess Quote Signed

On-Board


Stabilize

Gold Package

SLA in Effect

Assess Quote Signed

On-Board


Stabilize

Gold Pkg

SLA in Effect

Gold Package

Low

Operational

Maturity

Median

Operational

Maturity

High

Operational

Maturity

• Rougher ride for you

• Rougher ride for the client

• Smoother ride for you

• Smoother ride for the client

Note: “Gold Package” means your fullest MRR package.



Other Reasons High Performing MSPsSell and Install the Full Offering from the Start

• Advanced security exists because basic security isn’t

secure.

• When the customer buys “Basic Security” they can’t

imagine you’re not keeping them secure.

• You’ll have them sign a disclaimer.

• When they have a breach, you’ll show them the

disclaimer.

• They’ll say, “Well, I trusted you, why did you let me

make a stupid decision?”

• Then, to retain the customer or at least avoid a lawsuit,

you’ll spend 600 hours for free, recovering their system.

• If you have three Managed Services packages (e.g.,

Gold, Silver, Bronze), your Sales reps will pitch the

Bronze most often.

• That’s because Sales rep would rather sell something

than nothing, and it’s easier to sell a lower price.

• For every time they pitch Gold, they’ll pitch Silver 3

times and Bronze 10 times.

• Which means they’ll never get good at selling Gold.

• But Gold is the only offering that scales, allows you to

grow quick enough, keep the customer happy, and

make a fair profit.

There’s No Such Thing as

“Basic Security” and “Advanced Security”

The Solution You Allow the Sales People to Present

Most Often, is the Solution They’ll Learn to Sell



27

Results of Driving Technology Standards and Selling the Full Offering from the Start

Performance Criteria MSPs < OML 2.9 MSPs OML 2.9-3.8 MSPs > OML 3.8

Revenue Growth -1.9% 5.8% 13.8%

Service GM$ Growth -11.8% 5.6% 15.2%

Product GM$ Growth -16.% 31.9% 18.7%

EBITDA $ Growth -63.9% 9.5% 39.7%

Stock Value -16.0% 10.7% 35.2%

Source: S-L Index™Q4-18 through Q3-20

Tech Stack StrategyLots of vendors, self-

integrated tools.<<< In between. >>>

One vendor per segment of

stack, unified solution.

Solution Sales Strategy Get in the door, then upsell. <<< In between. >>>

Sell the full Gold Package

from the start, including

advanced security.



28


Service | Charging for Assessments | 3.2 / 4.0

No need. We do a quick but

good technical assessment

at no cost, and quote

successfully from there.

We do a paid technical and

business alignment on 95%

of our opportunities before

quoting Managed Services.

Doing a paid, full technical and business alignment assessment before

quoting Managed Services enables the highest differentiation, close rate of

desirable customers, revenue per account and profitability. Higher-

performing MSPs do this on 90%+ of opportunities; lower-performing MSPs

either view this as optional, counter-productive or hard to sell.

Why

?

OML

Note: Microsoft has Secure Score

and Productivity Score tools that

your customers and prospects can

access, but your assessments

should also include how their execs

look at technology and provide a

3-year business technology

roadmap.



29


Service | Charging for Assessments | 3.2 / 4.0

No need. We do a quick but

good technical assessment

at no cost, and quote

successfully from there.

We do a paid technical and

business alignment on 95%

of our opportunities before

quoting Managed Services.

Doing a paid, full technical and business alignment assessment before

quoting Managed Services enables the highest differentiation, close rate of

desirable customers, revenue per account and profitability. Higher-

performing MSPs do this on 90%+ of opportunities; lower-performing MSPs

either view this as optional, counter-productive or hard to sell.

Why

?

OML

Now, score

yourself from 1

(low) to 5

(high).



30


Service | Vendor Management| 2.5 / 4.0

We have multiple vendors

for each segment of the tech

stack, and we choose our

solutions based primarily on

market “buzz” and margin

incentives.

We have only one vendor

per segment of the tech

stack, and we have a

solutions committee that

builds a business case for

each choice.

High profit, high growth Solution Providers, paradoxically, partner with

fewer vendors. They also partner more deeply with those chosen few. They

have business plans vetted by the leaders of the company, for each new

solution or service they add to their portfolio. These behaviors give them

increased scale, efficiencies and flexibility.

Why

?

OML



31


Service | Vendor Management| 2.5 / 4.0

We have multiple vendors

for each segment of the tech

stack, and we choose our

solutions based primarily on

market “buzz” and margin

incentives.

We have only one vendor

per segment of the tech

stack, and we have a

solutions committee that

builds a business case for

each choice.

High profit, high growth Solution Providers, paradoxically, partner with

fewer vendors. They also partner more deeply with those chosen few. They

have business plans vetted by the leaders of the company, for each new

solution or service they add to their portfolio. These behaviors give them

increased scale, efficiencies and flexibility.

Why

?

OML

Now, score

yourself from 1

(low) to 5

(high).



32


?

OML

Functional

Area OML Trait

ROI

Weight

÷ Your OML Score

(1 to 5)

= Weighted

Score Priority

Accomplish

By

Strategy Value Creation Strategy 3.0 3 1.00 4

Strategy Target Customer Profile 3.1 2 0.65 3

Service Driving Tech Standards 3.2 2 0.63 1

Sales Cross-Selling Execution 3.2 4 1.25 5

Service Selling the Pre-Contract Assessment 3.2 2 0.63 1

Strategy Vendor Management 2.5 4 1.60 6

Your Total Score (Range: OML 1 to OML 5) 2.8



33


?

OML

Functional

Area OML Trait

ROI

Weight

÷ Your OML Score

(1 to 5)

= Weighted

Score Priority

Accomplish

By

Strategy Value Creation Strategy 3.0 3 1.00 4 2021/3/23

Strategy Target Customer Profile 3.1 2 0.65 3 2021/4/28

Service Driving Tech Standards 3.2 2 0.63 1 2021/3/12

Sales Cross-Selling Execution 3.2 4 1.25 5 2021/6/26

Service Selling the Pre-Contract Assessment 3.2 2 0.63 1 2021/2/11

Strategy Vendor Management 2.5 4 1.60 6 2021/2/26

Your Total Score (Range: OML 1 to OML 5) 2.8

Hear from a peer: Office Management, Finland

Office Management, Finland

Office Management is a Nordic

outsourcing partner for SMB

Mission: To make every workday

better by simplifying

9 offices in Sweden,

Finland and Norway

450 employees

Mikko Saarto

Country Manager of business in Finland,

40 employees

In charge of creating profitable growth

Providing IT for 550 SMB companies with

7,500 users in Finland

The “Before State in 2018” Challenges

• Multiple vendors

• Multiple customer offers

• Multiple combination of management and security configurations per customer

• Acquiring high % of customers at entry level pricing

Resulting in …

• Flatline customer growth

• Flatline Revenue

• Decreasing EBITDA – the key reason to adopt a new managed services strategy

The turnround: Following the mantra of simplification

Increase profits and growth through managed services

Target Customer

Profile

Standardized Technology

Stack

Cross-Selling Vendor Management

Our managed services offer model

M3

65

BP

Building your managed security practise

For →

Add-on services →

Include →

$2.5X

Lead offer with customers- comprehensive protection for data, devices and cyberthreats

Custom development

Secure score based assessments

All onsite and remote support

End user training

Comprehensive Security

Office and Teams

For →

Include →

Add-on services →

For →

Include →


$X

Baseline security

Customers traditionally deploying productivity but not much security

Cost conscious businesses now moving to remote work

M3

65

BP

Basic Security

Office and Teams

$1.6X

Intermediate security

Customers acknowledging the need for enhanced security but not quite the full meal deal

Remote support

M3

65

BP

Advanced Security

Office and Teams

$2.5X

Lead offer with customers- comprehensive protection for data, devices and cyberthreats



End user training

Custom development

Comprehensive security

M3

65

BP


Office and Teams


M3

65

BP


Include →



End user training

Custom development

Add-on services →

Device anti-virus

Anti-malware & anti-phishing filtering

Secured mail sending with encryption

Two factor authentication MFA

Device management in Intune and policies

Mobile Device Management MDM

Conditional access

Monthly monitoring and shadow IT discovery

Autopilot

Example of custom add-on service

with PowerBI and Dynamics Add-on services

• Build tools for the core customer business that gives us a larger role than just being an IT supplier

• Build once, use at scale-deploy these Power BI apps to multiple customer environments

• Cross-sell – for example, in this case we’re selling both M365 BP and Dynamics

The ”after” success business benefits

of our modelKey results

• During 2018 – 2019 shift to managed services

• Increased Revenue by 10%

• Increased EBITDA by 240%

• Increased Profit/Employee by 230%

The ”after” success business benefits

of our model Customer growth

• 2X customer growth

• Clear path to Upsell

• Moved from OML 3.2 to OML 3.8

• Next will step up to win larger size customers within our customer target range

Get Started on your journey to a more profitable practise with M365BP

M365 BP: A foundation for profitable managed services

Standardized technology stack

Easy to create standardized customer

offers with one solution across

productivity and security

Cross-selling

Cross sell with Azure and Dynamics

Easy to add-on SKUs like MDATP and MCAS

Selling the pre-contract assessment

Develop assessment packages around Secure Score and Productivity Score to uncover needs

Vendor management

One vendor, bill and license across productivity and

security

Microsoft 365 Partner Playbook: Practical Guidance across the partner journey

Understand business

opportunity

Partner opportunity

Build profitable

managed services

Managed services best

practices from experts

Train your team

Technical

Technical Training

Sales GTM

Customer

Conversation aids

Manage and deploy

solutions

IT Checklist

Deployment Guide

WebinarsDecks and docs Videos Tools and templates

M365 Business Premium Partner Playbook

https://aka.ms/M365BPPlaybook

Practical Guidance for partners for building a profitable managed service practise with M365BP – including managed services offers that meet today’s customer needs, technical and sales training and go to market content. Built in partnership with Industry and Microsoft experts. Companion tools and online training.

New! Announcing the Microsoft 365 Partner Playbook


Next webinar Feb 11th –

with Alex Fields and

David Bjurman-Birr

Register now https://aka.ms/AccelerateWithM365BP

Get started on your Microsoft 365 BP Journey

CTA Resources

How do I learn more about M365BP?

Learn more about the solution

Get started with demo environment

https://aka.ms/m365bp

https://transform.microsoft.com

How do I get my staff trained?

Join our webinar series

Get the playbook

Train your staff with TechFundamentals workshops



TechFundamentals training run by your distributor

New! M365BP and BV IUR Benefits on Partner Center

How do I stay connected?

Stay updated with latest product news, ask questions, give feedback

https://aka.ms/smbtc

https://transform.microsoft.com/

https://transform.microsoft.com/

https://aka.ms/GrowWithMicrosoft365


https://nam06.safelinks.protection.outlook.com/?url=https%3A%2F%2Fclick.email.office.com%2F%3Fqs%3D46950ba3a876a6ae169773f4095122e724e99854a8ec94a92fbb7ca246b5fe30e479c26832ac87dd37b22ee62d9141d1ab38bc01165d032d&data=04%7C01%7Cnehabha%40microsoft.com%7C716510b59ec946d12a4508d8c21a9415%7C72f988bf86f141af91ab2d7cd011db47%7C1%7C0%7C637472766701514823%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=F3BA4p6B50DGSg6ZLPyP0TBg6WB99WmJPtSusR15GSg%3D&reserved=0

https://aka.ms/smbtc

Grow Your Revenue and Profits Through Managed Services for ...

Documents

Transcript of Grow Your Revenue and Profits Through Managed Services for ...