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From MSP To vCIO: Do You Have What It Takes?

Oct 9, 2020

One of the most misused and misunderstood terms quickly gaining traction in the channel is vCIO (Virtual Chief Information Officer). While most will agree that the phrase belongs to a tech professional or team, many fail to identify the full scope of this critical role and, more specifically, how those activities affect the businesses they support.

A vCIO is not just responsible for managing IT systems. According to SearchITChannel, their responsibilities include “formulating strategic IT goals, planning the IT budget, analyzing and reworking business processes, and facilitating technology changes. The vCIO can help customers maintain their IT infrastructure — keeping the lights on — but can also provide more-forward-looking services.”

That latter point is crucial. MSPs are increasingly marketing virtual CIO services to their local business community as an ultimate tech resource, ensuring that their systems are up and running 24/7. However, some fail to recognize the importance of strategic visioning in their offering or focus too much on infrastructure, not on long-term planning.

For example, a true vCIO will ultimately be responsible for assessing current and future needs and drafting the company’s technology roadmap. MSPs offering these services must have team members who can thoroughly evaluate and comprehend critical pieces of other organizations, from IT current infrastructure and automation capabilities and limitations to strategic business goals and compliance requirements.

The key is to have the vision to understand the impact of new technology investments and workflow or process improvements. What potential changes could positively affect the organizations you support?

The normal engagement

True vCIOs are visionaries. If a client lacks internal IT resources to support a modern business, MSPs are typically capable of providing almost any service those companies may need. From the most critical applications, including email and cybersecurity, to help desk support and procurement services for hardware and cloud solutions, providers have a long history of success.

vCIO services are a different animal. For MSPs, technology usually involves tactical projects that may, or may not, include a monthly recurring revenue element. Securing a one-to-three-year contract is extremely valuable for any IT services firm. However, in many MSP/customer relationships, providers will only make initial upgrades and then support those technology systems’ status quo for the agreement’s duration. Unless something goes wrong, the client requests or agrees to upgrades, or one side or the other goes through a merger or acquisition, nothing changes significantly over the life of the contract.

Of course, there are exceptions. Engagements between MSPs and clients can be more fluid with a roadmap and timeline of technology improvements. These plans were driven by customers, and their budget processes than by IT services providers in the past. However, with the increasing complexity of technology, the movement to WFH and hybrid work situations, and the need to control costs, MSPs have more opportunity than ever to manage implementation, support, AND strategic planning.

The long view

The ultimate goal for IT services providers is getting the keys to the kingdom. For decades, MSPs (as well as VARs and systems integrators) have worked hard to earn ongoing recurring revenue opportunities from their clients as well as their continued trust. That faith allows providers to have more meaningful conversations and push the boundaries when making recommendations for improving infrastructure, automation, and data protection.

The vCIO role furthers those responsibilities. MSPs who offer those services must take an even longer view to imagine what those businesses will need to meet their objectives one, two, or even five years in the future. That focus goes beyond IT. Offering vCIO services means someone on your team must understand financial data and objectives and workflow and best practices for that specific industry.

For example, MSPs with medical specializations (i.e., physicians, dental, and chiropractic offices, hospitals, clinics) should be well-versed in HIPAA and insurance requirements and healthcare technologies. Those IT services companies must fully comprehend new industry challenges and opportunities and make insightful recommendations. MSPs need a strong understanding of the medical field to provide vCIO services to these types of organizations.

Next steps

How can IT services firms gain that level of wisdom and expertise? They earn a vCIO status one client at a time, starting with the longest-standing businesses with the deepest relationships. MSPs must have team members capable of analyzing existing infrastructure and clients’ organizational objectives, including financials, with a strong understanding of the new technology landscape.
Innovation is critical. With more highly distributed workforces and rising operational costs, companies expect vCIOs to offer process improvement ideas and introduce new automation options. Efficiency through technology should be a significant part of that focus.

How can the organization save time and minimize company resource consumption while maximizing revenue streams and cash flow? With deep technical and business expertise, MSPs are perfectly positioned to develop IT infrastructure roadmaps and introduce the innovative new solutions their clients need to meet their strategic goals.

That may require providers to grow their expertise in new areas and collaborate with peers and other third parties to deliver all the tools and support options their clients may need in the future. Most MSPs are ill-equipped to offer every conceivable offering themselves. Unless providers have an unlimited budget for hiring and training, most end up limiting themselves to a core set of service offerings.

However, in their vCIO role, MSPs may identify the need to deliver additional support and more advanced solutions, including SOCs to neutralize growing cybersecurity threats, and MS Business Central to streamline operations and accelerate growth. Collaboration partners can typically handle those roles and allow providers to increase their revenue streams without expanding their payroll.

Broad technical capabilities are invaluable pieces of a vCIO practice. SMBs are looking for outside experts capable of guiding organizational process changes and technology development and effectively securing their operations. MSPs with expertise in those areas and relationships with other experts to fill any potential support gaps can more confidently pitch their services to businesses of any shape or size.

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