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By: Greg VanDeWalker on August 18th, 2020
Partnering in the Copier Channel for Managed IT Business
Interview with Industry Thought Leader Ed McLaughlin
What do you mean by “partnering” in the managed IT services industry?
I define “partnering” as allowing someone else to do something you’re not as good at, and to finish off the tasks you bring to the market. A long time ago, there was an analyst for IDC who shared on a panel she didn’t see the imaging industry being able to really embrace the IT Channel because of its “incapacity to partner.” It was a strong statement at the time, but as I thought about it I realized there was a lot of validity her statement. The imaging channel, in general, really wants to control their environment and very much believe “if I can hold it and I can possess it - I control the quality.” But the fact is, the IT industry in nature, partners with people and it’s not the way the imaging channel conducts itself. Partnering and trusting someone else to do something you’re not as good at is a change to the channel’s DNA… and there are going to be a lot of things in the IT space that you’re not good at as a core copier business.
Besides the control issue, do you see other things that are maybe inhibitors to why the copier channel struggles with partnering?
There is a trust element that the partner can deliver on what they promise. To their credit, they are very sensitive to the customer experience, and they want to make sure that it’s their brand, it’s who they are, and their customer can have confidence when dealing with their partner – they take the whole relationship personal. It’s a good thing in some ways, but when you’re branching into new areas, it’s deadly. You have to learn how to partner with other people, how to garner the experience of others, and how to expand your own capabilities and find a way to blend what you do with what your partner does to enhance your customer experience. But you have to allow your partner the space to get things done.
In your opinion, why is it so difficult to build an in-house IT practice by themselves? Why is IT so different than the copier channel?
There are so many different avenues of IT. The copier industry never realized that the heart of their business was not making images on paper, although that is what they did and they did it for decades and did it well; but the purpose we had value in the organizations and workflow was because we were the vehicle that unstructured data flowed through a company – and that is the real knowledge that is there in the company. If we had understood that, we really would have been more involved when the image becomes digital, how are we going to get all that content and make it into something. Now there are people that – there is content management, and understanding content management, there is security, there’s AI, etc. All of this is now something you need to become an expert in, as opposed to being an expert putting dots on paper.
Dots on paper was pretty easy to control the environment. The impact you had was important. Now the dots on paper, its destination is not moving an idea necessarily, its destination is to convey an idea temporarily and it’s going to end up in the trashcan. Its value has dropped over the last few decades, and it is going to continue to drop in that level of importance. But the value we brought, and the value that was there is still very much an important part of the processes that go on inside a company. We have to be cognizant of how we can continue to participate in that – and we’re going to need help along the way because we didn’t really learn that along the way in the past. Even if we did, we still wouldn’t know it all. It was the people who really understood the content, they didn’t really understand the AI, security, management, etc. so you need a multitude of partners who can bring things together and make things happen efficiently.
You can kind of look at yourself like a conductor, and a conductor has to learn how to trust their orchestra, but at the same time, they are out there in control giving direction and making sure things happen the right way: timing occurs properly, and everything is going the right way. If we think of ourselves as the conductor, maybe the trust can be developed. Where the copier changes at the RND speed of an engineer, software change is faster than Moore’s Law.
What advice would you give to copier dealer owners who are looking to pivot or add to their offerings during this difficult time?
Don’t wait! There still a learning curb ahead of you. The time to think about it is over. Six months ago, you probably had another 2-3 years, or so you would have thought so if things continued the way they were. But now, with the acceleration of COVID-19 and the impact it’s had on business processes – that is the key element that changes. There are pivot points and inflection points that occur in the industry from time to time. We were coming to this point anyway, but then these other motivation inflection points have a more lasting impact – and this is one of those inflection points.
There is no longer a time to consider whether or not you should be in managed IT services business – so reach out to a partner that can help you accelerate quickly.
Long before I was on the Continuum Board, I was telling everybody there are only a few ways to go getting into managed IT services:
- Build your own
- Buy from someone else
- Partner with a Master MSP to lead the way
There may be something you need in the beginning that you may not need 2-3 years from now. But in my way of thinking, it is the partner piece that makes the absolutely most amount of sense for anybody getting into this business. If you’re going to get into managed IT services quickly, do what you know how to do, and that is to manage the account, to work with the customer, and learn from your partner on the other pieces. As you go on, you’ll learn more things just like anything else in life. As you learn those things, you can find ways to incorporate them into your other skillsets, or maybe in six months you don’t need help desk anymore, or level one of the help desk and you find that integrating that with your copier help desk that you actually become more efficient than possibly your partner – fine, move on, have another piece like security because you’re not going to have that.
You’re going to need partners as you continue to grow.
In my way of thinking, unless you already have the experience and you’ve already got the people and a company that will get you there and give you free reign – partnering is the only alternative, and if you’re thinking about it – it is the only way to go. Unless you really understand the model of the MSP, I’d throw away the other option. Today we don’t even talk about building a managed IT services business yourself because of how far the market has come, and the amount of investments required. Now the only viable options really are to either buy a good MSP or go partner.
If you’re buying an alien business, here are questions I’d ask myself:
- Do you really even know what you’re buying?
- Are you doing the right things?
- Are you buying the right partner?
- Are you getting something that will make you grow?
- Why are they selling to you? How come they aren’t buying you?
It’s not that buying is impossible, it’s not that it is a wrong decision, but it has more risks than if you were to partner with somebody. Once you’re in the managed IT business and then partner with somebody, or buy someone – I absolutely agree. You’ve done some basics, so now you’re talking about creating scale and depth.
In the beginning, I’m going to suggest there is only partnering. It’s the only quick start and scalable.
We should never be talking about building ourselves in the first place because it isn’t the build cost, it is the build cost that never stops because IT changes so quickly. You’re always going to be making investments and you’re never going to be able to get capital out of it until you get to scale… and it’s going to take you awhile to scale, years!
Customer needs have forced the industry to evolve our IT offerings. When is the “Managed Security Service Provider (MSSP)” going to be the new standard, or baseline, “Managed Service Provider (MSP)” offering?
It already is, we’re already there. I was just attending a seminar with this topic. People were looking at cybersecurity as something of the future, and I was thinking, “Cybersecurity is here now.” It’s an entry into the game.
If you don’t have cybersecurity in your offering, what do you bring to the table? It’s the number one concern, and should be for people who are going to be your customer.
Cybersecurity is good for MSPs and their customers to get what they deserve today.
What have you been working on? What are you excited about?
We’re trying to bring tools to the marketplace to help solve problems for MSPs and their customers. Shawn Cashmark and I have founded Predictive InSight. We have a number of different projects we’re bringing to the market including our Data Collecting Agent (DCA) product. This is far more intelligent than anything else we’ve seen or been accustomed to. It’s got predictive analytics, military grade security, a stronger network, better accuracy, automation, etc. to solve bigger programs. This superior product includes us doing the heavy lifting and work for our customers. In comparison, Predictive InSight will take only one person per every 10,000 managed devices, instead of one person for every 3,000.
Another area we are expanding is our Technology-as-a-Service storefront. It’s got a lot of moving parts and I see a big future in these capabilities by simplifying complicated technology stacks into services.
Collabrance Resources Highlighted in Interview
- MSP Offering: https://www.collabrance.com/msp-offerings/MSP-Offering
- MSSP Offering: https://www.collabrance.com/msp-offerings/security-offering/mssp-offering-solutions
- New to Managed IT Services Resources (i.e. 90 day on boarding plan; Managed IT Success Checklist): https://www.collabrance.com/ready-grow/new-managed-it-services
- Managed IT Sales Best Practices from an Office Equipment Dealer: https://www.collabrance.com/about-us/blog/2020/05/adjusting-your-managed-services-sales-process-achieve-growth-2020
- Starting a Managed IT Business Case Study: https://www.collabrance.com/testimonials/sdg
Edward McLaughlin is a Co-Founder of Predictive InSight, a data mining and predictive analytics company serving the print industry. He is also Executive Advisor with NEXERA a BEI Services Company.
Ed has over 50 years of executive and management experience in the office imaging, automation, and business services industries. He has broad experience in operations, turnaround situations, product development, and supply chain simplification. He has led the strategic selection and execution of numerous successful mergers and acquisitions paying special attention to selecting complementary and synergistic business cultures.
After four years of service in the US Air Force, Mr. McLaughlin began his career with Sperry Rand Corporation, Univac Division, where he was an accountant with the International Davison controllers department. He later held many sales, managerial and executive positions with companies such as 3M, Canon, Ricoh, and concluding his corporate experience as President of Sharp Electronics Corp.
He serves on numerous boards and has been Chair to the Audit committee of Sharp Electronics Corp.
Mr. McLaughlin is a graduate of LaSalle University, Philadelphia, PA, and an alumni of IMD University Lusanne Switzerland. He has twice been identified by industry associations as Executive of the Year and has been awarded two Lifetime Achievement awards.
Connect with Ed: https://www.linkedin.com/in/edmcl/