Why building Strategic Alliances can help your MSP Business
Last month I wrote an article entitled “As an IT Business Owner, when should I ask for help?” that received a lot of feedback. The article discussed how it’s not unusual to see the owners of IT businesses trying to do everything within their business themselves, and typically achieving very little as a result.
Continuing on that theme, one of the things I’ve observed from the most successful Managed Service Providers that I work with is that they are laser-like in focus on a core competency within their business, knowing what they are good at and sticking to it.
For most smaller IT companies this core competency is IT Infrastructure – Servers, Workstations and Networks. The result is that they are viewed as experts in their field, delivering projects and work in a timely fashion and at high quality.
Compliment Your Core Competency with Strategic Alliances
On the other hand, you are probably familiar with the phrase “Jack of all trades, and Master of none”. I’ve seen plenty of examples of this where an IT company is approached by a prospect or client to do work that falls outside their core competency, it could be web-design, data cabling or bespoke development, yet they are afraid to say no to that work – often for fear of pushing that client away, or indeed because they’re not confident when the next opportunity will come along.
Subsequently, they take on this work and try to complete it under “best endeavours”. As this work is outside their normal field of expertise, the result is often that the work is challenging to complete, takes longer than it really should, and is often completed to lower standards than the client deserves.
By far a better approach would be to stick to your core competency, but build up Strategic Alliances with experts in other competencies complimentary to your own.
Benefits of Strategic Alliances
By building such trusted relationships, the next time you’re approached for work outside your core competency by a client or prospective client, you can do one of two things. You can refer that client directly to your trusted Strategic Alliance partner, or if the task is a smaller part of a larger job that is within your remit – you can sub-contract the work to that Strategic Alliance partner to complete under your direction.
The result in both cases is that you’re delivering the service to your client that they truly deserve.
The client is getting the expertise they require in every field, and you’re enhancing your reputation – not just as an expert in your core-competency, but as a very well connected company who doesn’t pretend to know everything, but knows when to involve a trusted and reliable 3rd party that will be of benefit the client.
What’s more, the more Strategic Alliances you build with like minded companies, the more partners you’ll have out there who’ll be looking for work on your behalf. The next time your Data Cabling partner is approached to install 20 Wall-Ports and install a server, guess who’ll they’ll be calling to sub-contract the server installation to? Strategic Alliances can help you find clients you’d never normally have met.
Who to Partner With?
Some examples of Strategic Alliances IT Infrastructure MSP’s might consider building are:-
- Web Site Design
- Search Engine Optimisation (SEO)
- Data Cabling
- Database Development
- Software Development
- IT Leasing and Finance Companies
- IT Training
- Telecoms and Voice-over-IP
I’m not suggesting for a minute that building such Strategic Alliances precludes you from working in other areas to build you experience. I know of many MSP’s who, for instance, are comfortable to take on VoIP clients with less than 10 handsets, or Data Cabling work for the odd additional socket – but sub-contract large VoIP roll-outs or projects to flood a new office with Data points.
Jobs that you can take in your stride and can be delivered in a timely fashion are fine, but any work where you have a gut feeling that things will be outside your range of ability to serve your client properly, is probably the time to call in someone for who that work *is* a core competency.
Richard Tubb is an IT Business Consultant who works with ambitious IT companies who want to grow their businesses in a scalable and sustainable way.