White Labeling Managed IT Services Pros and Cons
Traditional channel partners considering making the move to selling certain products as a white label partner should evaluate certain factors before making the jump.
As demands and complexities on today’s IT organizations grow, businesses are becoming increasingly dependent on various partners to help them accelerate the transformation of both their organizations and their business. There’s no shortage of analyst reports that demonstrate that IT organizations are expected to lead strategic programs, largely tied to various digital transformation initiatives, while at the same time ensuring the business is protected from security threats, and continuing to manage all of the tactical parts of the organization such as IT helpdesk. In fact, Support Office states that the net global spending on digital transformation in 2018 was approximately $1 trillion. This number is expected to increase to more than $2 trillion by 2022.
Combined those factors are driving demands on two fronts that we’re going to dive deeper into. For a Channel Partner to serve the CIO as a ‘Trusted Advisor, and for Managed IT Services to serve as a means for IT organizations to lessen the strain on their organizations to invest their time and resources on things that are either not core to their business, non-strategic, or in areas where they’re struggling to support. For example, Market researcher Vanson Bourne suggests 74 percent of CIOs spend more time maintaining existing IT systems than searching for new solutions to business challenges.
What Is A Trusted Advisor and Why Is It Important to IT Leaders?
Merriam-Webster defines trust as “assured reliance on the character, ability, strength or truth of someone or something; one in which confidence is placed,” and defines advisor as “someone who gives advice.” Combined, and applied in the context of meeting the needs of today’s IT organizations, it simply means helping IT organizations simplify the complexities of navigating and managing today’s technology so they can more effectively execute and meet the demands of the businesses and customers they support.
The right Trusted Advisor not only helps the client navigate the various stages of the buying process, such as defining needs & requirements, gathering and documenting inventory, developing new solutions, and managing the sourcing process to the successful selection of suppliers and contract negotiations. Given the increased acceleration of adoption of emerging technologies in recent years combined with an entirely new landscape of suppliers, having someone act as a ‘sherpa’ to help navigate that journey can lessen the load significantly for an IT organization. It can also improve the outcome by engaging an independent party to validate requirements, hold suppliers accountable to the right solution, and by ensuring the project plan meets the business objectives.
Otherwise said, today’s channel partners who act as a Trusted Advisor act as the ‘General Contractor’ across multiple technology providers. Why is this valuable to the CIO of an organization? Rather than having to run multiple sourcing exercises against disparate technologies and suppliers tied to them, a Trusted Advisor can run the process for them from beginning to end.
Over time, Trusted Advisor status is earned and cemented by executing what they say they will do, being an advocate for their client, delivering the right solution that meets the underlying business objectives, and in the process enables the IT organization to increase its focus on delivering business-critical digital transformation programs.
How Managed IT Services Adds Value to Trusted Advisors
The acceleration and increased speed of adoption of technologies such as Unified Communications (UCaaS), Contact Center as a Service (CCaaS), SD-WAN, CyberSecurity, and others has driven exponential growth in the numbers of technology suppliers for an IT organization. Combined with the disaggregation of the traditional vendor model, whereby a single vendor would deliver dozens of services, often-times, today’s best-in-class solution will likely come from companies that specialize in their respective areas of technology.
While a Trusted Advisor can certainly help the client navigate the sourcing process, it is the execution of the delivery and lifecycle management that will make the difference between success and failure of a project. A primary driver for Managed IT Services market demand is for the Managed Services Provider to serve as the ‘General Contractor’ across multiple technologies, and what can become dozens of technology suppliers.
Whether we look at the Project Management phase, the Service Delivery phase, Customer Onboarding phase or Lifecycle Management phase, there’s tremendous value in enabling the IT organization to have ‘one throat to choke’ for handling all post-sales related issues.
Enabling Trusted Advisors – White Label vs. Agent Model
Let’s take a deep dive into white label partners vs. agents and outline the advantages and disadvantages of each. Last week we went over the basic definition of each, here is a refresher!
The Admin Bar defines a White Label Partner (WLP) as an individual or team who does work on your client’s project but appears to be part of your core team. A WLP partner of NETRIO would sell our services as an MSP under their brand. NETRIO would be delivering MSP services under our WLP alias. When NETRIO works with an WLP, we are an extension to their team and the customer does not know the difference.
An agent is a trusted advisor who works with clients to help them through their journey to finding a solution. For example, an agent would be selling NETRIO services to a client as a way to outsource Managed IT Services. The agent would guide the customer through their journey of signing a contract with NETRIO. NETRIO would then be aligned with your business requirements and help your company meet its strategic goals.
Benefits of White Label Partners
NETRIO is seeing more and more companies adopt a white label model. This allows a company to develop their own market strategies, sales strategies, and marketing strategies by building off of what NETRIO has already established. Our biggest advice when entering a white label partnership is to emulate what they are suggesting. One huge WLP benefit is not having to reinvent the wheel.
Other benefits of WLP:
- Customer Ownership
- Additional Client Value
- Improved Client Retention
- Financial profile improvement
- Higher Top-Line Revenue
- Improved Margin Profile
- More attractive EBITDA
- Increased company valuation
Factors to Consider:
- Customer Strategy
- Executive Alignment
- Support Capabilities
- Billing Capabilities
- Requires Investment
- Risk vs. Reward
Is WLP Right For Your Company?
These are the factors you should take into consideration when choosing between WLP and Agent. Things like performance, revenue growth and topline revenue are going to be extremely important when making a choice that is right for your company. If you would like to explore White Label Partnership with NETRIO, contact us for more information.