If you serve as a Virtual CIO for your small business clients, there’s a lot of responsibility on your plate.
Managing your client’ IT departments on an outsourced basis takes a lot of patience, persistence, and non-stop resource juggling.
But done right, providing virtual CIO services is the far-superior business model for technology providers targeting the SMB segment – as this focus allows you to incorporate a vast array of services as needed -- including managed services, cloud computing, network integration, storage, security, and mobility to name a few.
In this article, we'll look at five essential best practices, or commandments if you will, for taking on this highly-rewarding IT calling:
Getting Up to Speed First
If you’ve spent any time around a Fortune 1000 organization’s IT department, you know that dozens of distinct job functions and departments are dedicated to supporting end users.
Given the huge IT labor shortages and the seemingly unquenchable thirst for outsourcing, many core IT services are provided internally by contractors. This is transparent to Fortune 1000 end users because they have a single contact point: the project manager, help desk coordinator, floor technician, departmental computer coordinator, or business unit technologist.
But a full-time computer support professional often isn’t on the payroll in a small business.
Hiring even a junior or entry-level IT technician or a desktop support specialist may not be cost-effective. Yet, in today’s highly competitive, information-centric climate, small businesses rely more than ever on technology for mission-critical business functions.
As a technology provider focusing on small businesses, you’re uniquely positioned to be the single point of contact for your small business clients’ IT support.
By providing an end-to-end solution, you have more control over customer satisfaction, response time, pricing, and licensing.
In addition, you leverage your sales efforts and enhance your profit margins.
Furthermore, by providing more services to your clients, you build up stronger brand-name loyalty and learn more about what it takes to solve their unique business problems.
Positioning yourself as a virtual CIO and your company as the Virtual IT department can be so profitable and compelling that anything short of fully embracing the concept leaves money on the table.
(1) Provide Anything and Everything They Need Related to IT
What services should you provide as a Virtual CIO? In a nutshell, “everything.”
Because small businesses don’t have a lot of internal resources, you need to be prepared to provide anything and everything that’s IT-related that your clients need.
This means that if you and your Virtual IT company can’t provide the answer, you need to find the answer for your clients.
By very definition, this means wearing lots of hats. This might include network integration, website design, app development, hardware maintenance, software patching, help desk services, troubleshooting, mobile device management, social media monitoring, or training at any given time.
(2) Find the Right Clients
Serving as your clients’ Virtual CIO is definitely a niche market.
At one extreme, many small businesses are too small. The harsh reality is that if a small business can only afford to pay for a few hours a year of professional IT services, a Virtual CIO is generally not the answer.
In those cases, the small business owner or a more technically-inclined employee will have to shoulder the bulk of the IT responsibilities while occasionally calling in a more entry-level computer repair technician.
At the other extreme, in the mid-market or enterprise market, you’ll find full-time salaried CIOs with teams of IT professionals to support their efforts. Sure, in-house IT departments do hire out professional services from time to time.
But outsourcing is usually highly-specialized or with relatively large technology providers that can provide immediate or near-immediate workforce capacity boosts.
Most Virtual CIOs find that prospective small business clients often are accustomed to dealing with many IT vendors. Their computers may have come from the local office supply superstore and the phone support from the owner’s 16-year-old nephew. The marketing manager may have designed their website internally, and they might send their staff to the local community college for software training.
Now your company wants to sell this somewhat content small business owner the benefits of consolidating its IT services under one umbrella. How do you do it? In addition, how do you identify which prospects are a good fit for your outsourced Virtual IT department?
Typically the right clients have experienced the pain and frustration of dealing with multiple IT vendors and being caught in the middle of the “blame game” – which often feels a lot like being a human ping pong ball: “It’s not our fault. The other IT vendor caused this.”
Think of a new client relationship as a proving ground. As you deliver great results and value for new clients, the kinds of clients you want will be very receptive to more long-term Virtual CIO-like relationships, where you manage all of their immediate and ongoing IT needs on an outsourced basis.
Many non-technical small business owners are completely unaware of just how much time it takes to identify, screen, and manage several different IT vendors. When you ask potential clients if they’re prepared to hire a full-time IT professional just to referee the finger-pointing between their dozen or so different technology vendors, the Virtual CIO option becomes more cost-effective and appealing.
Suppose a small business owner wants to spend half of their year being professional price shoppers at the expense of neglecting their core business responsibilities. In that case, there are, of course, opportunity costs to consider as well.
Small business prospects that are hell-bent on squeezing their vendors as hard as possible, and negotiating one-sided money-losing deals, should be sent packing as soon as possible – before being given the chance to taint your precious client list.
(3) Sell Virtual CIO Services at the Right Price
It’s great to have a portfolio of IT services to offer. However, the price and value must be in line with market demand to make the sale and build the relationship.
After all, if a small business prospect had a six-figure IT budget, that prospect would likely hire a salaried full-time CIO, guarantee a continuous supply of high-octane cappuccino, and call off the outsourcing deal. However, most small businesses don’t have the budget or need for a full-time in-house CIO or IT manager.
Many technology providers price services for Virtual IT departments at hourly rates, which may indicate the demand or how difficult it can be to predict anticipated usage over a 12-month period accurately.
Other Virtual CIOs favor managed services-style pricing – where pricing includes certain services for a set number of desktops, mobile devices, and servers – with options to scale up the number of supported systems and the overall scope of what’s included.
(4) Keep Clients Happy
After your company has been contracted as the Virtual IT department for a small business, how do you ensure the partnership remains mutually beneficial?
From the standpoint of the Virtual CIO, it’s very important to proactively manage expectations, stay in constant communications, and ensure that you’re at the minimum meeting expectations –preferably exceeding them.
While a variety of very cost-effective technologies exist to stay on top of this key priority, from basic CRM systems to survey tools, and client retention tools, first and foremost, there must be a culture supporting doing what’s right for the client first and best for your own company second.
Obviously, if that approach doesn’t prove financially viable, you may need to revisit your pricing structure or client selection process. But at the end of the day, your clients are the judges of value – not you. For the long haul, virtual CIOs in “IT” must keep their clients happy. Period.
(5) Partner to Deliver Complete Solutions
Finally, positioning your company as the Virtual IT department for small business clients can be highly rewarding and profitable.
However, those wanting to enter the market for these services should be prepared to provide or help locate anything and everything small business owners might request.
By very definition, this means that Virtual CIOs must be excellent at cultivating relationships with deeply-niched IT consultants and small consulting firms that can be brought into their clients on an as-needed basis to deliver complete solutions.
Recognize that not every small business client is a good match for your firm’s Virtual IT department. You must carefully qualify prospects’ needs and intentions to distinguish the price shoppers from those looking for a long-term business relationship — the best measure of a successful Virtual IT department deployment.
What do you think is most critical for being a successful Virtual CIO? Please let us know your thoughts in the comments section below.
And to follow through on the tips introduced in this article, especially if you also support SaaS or IaaS, be sure to enroll now in our free 7-day eCourse: Go-to-Market Strategy 101 for B2B SaaS Startups and Scaleups.