Unlike any other service in a company’s catalog, managed services represents the full breadth and scope of everything a company has to offer. It doesn’t have a choice. Managed services is essentially taking over all the operations, as well as the risk, of running some or all of a company’s infrastructure. This leverages every single instrument in a company’s orchestra in order to be effective, from product, support, professional services, and every back-office function as well, as we’ll discuss in a moment.

Managed services is essentially taking over all the operations, as well as the risk, of running some or all of a company’s infrastructure.

This has been a key lesson for me to understand and to share with anyone unfortunate enough to hear me yelling from my balcony. When I first entered the business, in retrospect, my approach was much more akin to joining a rock band. All I needed, I thought, was to learn a few chords, get a few key players together and crank out the power ballads. What took me some time to understand was that this music was far more complex than I had assumed, written for a much larger set of musicians, with different and strange instruments, ideally coordinated and overseen by a conductor who brings all the players together.

Here are just some of the players in the managed services (MS) orchestra, and how they may have to tune to support one another:

Sales

• Successful MS sales is, more often than not, led by dedicated, overlay sales professionals.
• MS-specific sales comp has to be clearly defined, prioritized, and clearly communicated to all constituents.

Finance

• MS-specific financial models must be agreed upon across the organization.
• Lower MS margins than expectations must be agreed vs. expectations for maintenance or hardware and software.
• Acknowledgment that outer years of the MS business and each MS contract are the most profitable.
• MS-specific deal review, with rules of engagement clearly defined.

Channels & Theaters

• Buy-in, participation, and championing of MS across and outside of the organization.

Marketing

• MS-specific support, weaving MS into the overall services story.

Service Operations and Engineering

• MS-specific support, with different goals than traditional business.

Legal

• Many MS-specific contract terms need to be drafted and templatized.

Executive Leadership

• Orchestrating all the players to the same sheet of music.
• Continually prioritizing and championing MS to internal and external audiences.
• MS growth inevitably runs into large obstacles that require the power of the C-suite to overcome.

Analogy of Managed Services: Managed Services Requires Every Player to Read from the Same Sheet of Music

Because managed services is the only place in a provider where the entire organization’s resources are brought together in coordination to ensure customer success, there are more players than any other segment of the business. The “music” is more complex than the players are used to because it often requires them to work together when they have very little knowledge or understanding of one another. Revenue recognition is an example in which a new understanding of the MS business and the accounting rules that need to be applied must be gained. And importantly, because all these players have to play in time together with this new sheet of music, it works best when it is conducted by a leader who has the ability to direct any action in any area of the business and overcome obstacles that any individual within the group couldn’t do on their own.

Because managed services is the only place in a provider where the entire organization’s resources are brought together in coordination to ensure customer success, there are more players than any other segment of the business.

In a perfect world, all the players understand that they are in an orchestra, that there is such a thing as a shared sheet of music, and that there is a conductor overseeing all aspects of the performance. But, as Moby said, “In a perfect world, I would be 6-foot-3, have a perfect head of hair and look like Orlando Bloom.” Indeed.

My experience has been that there are often many competing visions for how MS should operate to be successful in any given company. When these competing musicians start playing different songs at the same time, it can lead to a cacophony of well-meaning players, each playing very loudly to get their song heard.

7 Steps Toward Successful Managed Services

One of the largest challenges I see for managed services, especially new or growing MS businesses within a larger organization, is the need to recognize that MS success requires a different level of orchestration across more and different players than an organization might be used to.

What does this mean for you in your business right now, and what can you do about it?

1. Start with a vision of that perfect world for yourself. What does a well-orchestrated and coordinated MS approach look like for you and your business? Break this down by functional category: Sales Ops, Sales, Channel, Marketing, Delivery, Engineering, Finance, Exec, etc.
2. Perform a gap analysis of what needs to get done by function to reach that perfect vision.
3. Socialize the vision and gap analysis with each separate function and true up as needed.
4. Prioritize and rank order what functions you think you should address first. Don’t try to do everything at once. Instead, pick your top three and work those first.
5. For those top three, collaborate with each function to translate the gap analysis into concrete objectives (S.M.A.R.T. goals).
6. Work your plan, come back to your vision, true up and re-prioritize as needed, pick the next three functions and keep working.
7. Keep socializing your vision of orchestration up, down and across; sell the vision of orchestration and exactly what that looks like.

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