Can an MSP Actually Deliver CIO as a Service???

¡Hola!

Alright guys, uh, here's still ChannelCon, day 1. I got a lot of sleep last night, finally, first night away from the kid, and I got a lot of things perking in my head, and I saw Luis, I saw you here, and figured let's chat about something.

Sure. Interesting topic, but for people that don't know you, Luis Giraldo, ex-MSP, but now at Scalepad for the last 3 years. And Scalepad has a number of different solutions across different challenges that MSPs have in their day-to-day lifecycle management, backup monitoring, compliance, business analytics, quoting and contract management. So we solve for a lot of those things.

And also one of the best podcast interviewers that I've actually ever met. MSP Confidential, if you haven't, check it out. You really come, you're always prepared. You have questions that get into that inquisitive nature that a lot of people skip out on when they're interviewing.

Thank you. I think a lot of it comes from just having been a bit in the trenches myself. And you know, it's been a process of learning how to be super focused on the actual conversation and getting a bit of that peripheral view on some of the topics, things that come up during the conversation. Tying them to some of the challenges that you're hearing about when you're at an event like this. Maybe somebody talks about an issue they're having and you kind of correlate all those things and get into a little bit more of a detailed discussion, I guess. It's kind of, I enjoy that.

Well, being that we both were MSPs too, I think there's a level of curiosity that we can dive into, right? Like we were talking before we hit record on, you interviewed a fractional CIO, a true, I, hey, I'm in there to consult on the information that's processing through an organization. And the thing that popped into my head first was, How do you monetize that? How do you pay for that? What does the business structure look like? Because as a guy that ran an MSP, the first thing I'm thinking of, oh, those people are expensive. Someone that has that inquisitive nature for your customers. But yeah, this is kind of what runs through my head. So if you want to synthesize a little bit, because people probably haven't seen that episode. Is it live? Is it aired?

Yeah, it aired on Friday with Chris Jensen, who's a fractional CIO in the enterprise primarily, but he works a lot with MSPs. Where can people find it? So it's on the Scalepad YouTube channel. It's also on the recent events on LinkedIn, so people are still finding it from last week.

Okay. And what was the big takeaway for you?

I think one of the big takeaways, and Chris really got into a bit of sort of the engagement model of like what happens with a client conversation when he starts working with them for the first time. And I think a lot of it was really interesting to break down that he starts with the things like a business impact analysis. And really talking about strategy. What are the depth of tools and to what extent are they being used in the enterprise or in that particular business? And he works with a range of business sizes, you know, anywhere from a few million dollars to, you know, hundreds of millions of dollars. And I think that one takeaway is that in that spectrum, there's definitely different needs that clients have. And to come into a strategic conversation right off the bat, I think requires a little bit more of a bespoke approach to the conversation. I think what was pretty obvious is that he works with a lot of MSPs and they tend to come in very standardization-focused.

Buy my stack.

Yeah, buy my stack. We need you to do this. And in many cases, even if it's the right thing for the customer to do, I think the timeline of when that happens may not be adequate or ideal because one of the things that happens is customers like, well, you don't know anything about my business yet. Like, how do you want me to come and spend a bunch of money on this? Like, how does this even affect or give us an ROI or any of these questions that might come up? In a true strategic business outcome conversation. So I think it was interesting, and I think as we kind of transition or evolve into a compliance world where a lot of the things are really about these longer-term business outcomes, I think it behooves MSPs to be thinking about, okay, how do we engage strategically first and then bring in sort of all the things that we want to do from a hardware refresh perspective or from an initiative of like replacing a CRM or an ERP or whatever, into the longer-term conversation without sort of, I guess, too soon just making it all about the tactical hardware piece?

Well, and it really becomes interesting. So in consulting, I did business coaching for years. There's a saying that you meet the client where they are, right? Because you're never going to immediately be able to implement everything that you want in the beginning because there might be too much disruption that you cause by trying to change too much too fast. And when you get to a larger-size customer, They have so many employees that they can't just flip a switch and have everyone pushing this button instead of that button and sending emails out this way instead of that way. And there's a popular consulting technique called kaizen. I don't know if you're familiar with kaizen, right? Where you go around the mountain and you have to talk to every single department and say, "Hey, how does this process affect you? How does that process affect them?" And that's time-consuming. So when you bring up this whole idea of it being a bespoke process, That just tells me it's going to take time. It's going to take you 90 days, 120 days just to learn who your customer is. How do they make money? How do they process the economics that they are assisting with?

And listen, I think it's tough because obviously MSPs come in with a mandate of just keeping the lights on, making technology work, and that sort of maybe gets in the way of, especially if it's the same person doing a bit of the strategic conversation, but also driving a bit of the technology working, you know, keep the lights on type of thing. It just makes it difficult to separate those two streams of data or conversation or info.

Well, and if you think about why we did that as an MSP community, we did that because it makes the economics easy, right? If I know that they're going to have this, I can predict that they're going to take this much time per user per month, and I could set a price on that. But it's very hard to have a conversation about it with a customer if the price is moving all the time or the hours start to go this way or go that way. And as a lot of us MSP owners are accidental entrepreneurs, it's an uncomfortable situation to be in.

Yeah, you're not wrong. And I think the challenge is obviously, again, coming in with the desire for standardization, you know, reach a certain baseline, a minimum. And a lot of those things are moving into the compliance world now where the compliance is actually dictating the baseline of the minimums. But I think in the framework of compliance discussions, customers can be a little bit more engaged This is something that's changing a lot for MSPs, I think, in recent years and going forward is how much the customer is actually involved in those conversations. But it's kind of on us to say, well, yeah, and I get it, it's not as scalable as a very sort of packaged, modeled kind of scenario, but it's on us to get the customer thinking about this more long-term. And I think it just makes for a better relationship where you're truly kind of trying to drive the business outcomes of that business. And not so much your agenda as an MSP specifically, which I think is where you maybe lose a bit of touch with the customer.

You do, and so I got really obsessed about this topic actually, and I started to look into, there's that old proverb of if you want to see what's going to happen in the future, look in the past. Like, has anyone ever gone the same metamorphosis? And the actual, the financial sector, so primarily bookkeeping and taxes, they actually went a very similar metamorphosis of this, where, right, they started off with, Hiring an accountant, right? The idea of I can't just do it in-house 'cause small business in the '50s and '60s started needing a numbers person. After the baby boom era, everyone opened a business, which started to create bookkeeping services, right? Real similar to us as help desk services, which then turns into taxes, right? CPAs start to have a boom around the '70s when GAAP started to become popular, right? Generally Acceptable Accounting Principles. Rather than hitting regulation, they just hit education to say, hey, let's just standardize, guys. Like they were able to approach this before regulation really set in, other than the taxes that the IRS would, you know, require you to have. But around the '80s and '90s, what you actually start to see is that fractional CFOs start to pop up, 'cause someone needs to be able to consult between the bookkeeper saying, "Here's how much we made," and the CPA saying, "Hey, here's what we should do with your money to have your taxes in a certain bucket." So it's kind of an interesting dichotomy when you look at both of us overlap, because now you're going from us being right, just the IT, to being all-you-can-eat commoditized help desk services. And now we're going back to being consultants.

Yeah. And to use that same metaphor, I think MSPs need to become the CFOs of technology for their customers. And that's kind of what Chris really gets into as a CIO. He's just having a very, very different conversation than most MSPs are having right off the bat. And so I thought that was interesting. A lot of food for thought there. And again, I think compliance is driving a very, very different engagement model with the client where they have to participate in their own rescue much more dynamically and deeply than they have ever before. And the MSP is going to be the conduit for this. They can't really kind of take a backseat to wait till the customer decides that they want to be engaged on their own strategy. So it's kind of up to the MSP to be more involved there.

Well, and beyond that, it's not everything is technically oriented, right? Some stuff is going to be their internal processes. Some things are going to be how they manage change management. Some stuff is going to be how they manage their employees, right? So there's going to be those aspects that aren't just go check a box in a system or a platform and walk away.

Truly, truly. This is going to be a multi-year, I think, process of just getting used to having those deeper conversations and maybe even separating the roles. The other thing I think is interesting, and Chris talked about this on the livestream, is the average small business can't afford a CIO, can't afford a CISO, never mind. And so the CIO is kind of taking on a lot of the CISO-type roles. And in the small business outsourced IT model, the MSPs are going to have to fulfill these roles. And sometimes it's not enough to just have the technical expertise. You really have to understand the business acumen. You have to really get in there, understand the processes. Another guest I had, Joe Market from Transformative, California-based MSP. One of the things he was doing that I thought was super interesting is he was getting his clients to invite him into their cadence of strategic meetings at least once a year. Because the context of the meeting and the conversation changes entirely from just the MSP's agenda of like, hey, we've got warranty management here to talk about, as opposed to, hey, what are you guys seeing as issues in your business impacting your growth or whatever other challenges, and sort of becoming a part of that conversation. I thought that was super brilliant. So maybe just flipping the coin a little bit and the switch to say, hey, bring me into your cadence, involve me with the rest of your leadership team, I think is a really cool thing to do.

Well, you and I both probably had, and tell me if I'm wrong here, but we always had that one client that would call you and go, hey, I just bought a company. We're going to integrate them in the next week. Now we're going to have a second location. You're sitting there going, could you have told me this yesterday?

Well, that's happened to all of us. I had one client that once, you know, gave me a 2-week heads up that they were opening a new location. And, you know, this was in the middle, like post-COVID.

Can't you just Amazon computers and get them to us?

I know. And so those things are always a challenge. And I just find it funny because it's our own fault, really. It's always our own fault.

Because we're not inserting ourselves in the conversation like you're saying.

Correct. Correct. We are always just a reactive component of that entire relationship. And that's how the client is going to treat it. They don't know any better. And so they didn't know to include us in the conversation because we just weren't ever in it.

Well, we're a very reactive culture for a lot of times, right? Because if you think of the whole birth of the IT help desk, and I say it sometimes, people get upset, it's we're still the janitors in some of our minds, right? It breaks, I fix it. It needs refreshing, I refresh it. There's not the forward engineering perspective of let's start with the root of a problem and find a way to overcome that. And in some businesses, they need to know what that cost is going to be. And I'm going to have to spend 5, 6 hours just telling them what the cost is going to be.

It's possible we've been having this same conversation for decades, but, but I love that it's coming up again. I think in the context now of some of the things that are becoming increasingly difficult to do, whether it's compliance or whether it's some of those other things, because I think every opportunity for evolution brings about some of the change and some of the other ways to sort of how do I bring this into my business as a proper process? And again, you know, the spectrum of size of MSPs, I think, dictates a lot of your capabilities. If you're a small shop, 3, 5 people, there's going to be limited things you can do in that.

Oh, Wes Spencer had built out a whole matrix of cybersecurity on like, hey, if you're this many million, you only have this much really to budget for this. So don't offer this service.

Yes. Don't try to be more than what you can realistically deploy.

Well, like what you say with compliance, then you're just going to put a big old bullseye on your back. You're going to say, oh, I can do it. No, you can't. Do you really want to do that? But yeah, and there's a whole interesting conversation too when it comes to not being afraid to talk money with your customers because all this is going to come at a cost and they're going to have to understand what that's going to be ultimately.

The risk education piece I think is another takeaway from the conversation with Chris Jensen because I think when customers are not educated about what their risk tolerance is in their business or they just don't understand some of the ramifications and there is in lies sort of the advantage of doing something like a business impact analysis because It's the exercise that allows them to understand a little bit better and not be sort of just rejecting every potential solution or tweak to their environment because they don't understand it. And you mentioned something earlier too, which is this idea of like the big bang projects. And MSPs are great at this. They come in with a new customer, it's like, yeah, we're going to remediate your whole thing. And for us to even give you stable support, you're going to need to do all this. And the thing that MSPs, I think, neglect to observe in that moment is how the client is perceiving the impact to their business of all this change at once. They don't understand if there's going to be impact or no impact from swapping out some access points or a firewall or some other solution. And so I think it's important to go through that process and find out where their fears are and work towards that.

Oh, I can tell you, we had a big project. We did a lot of senior living facilities, so big campuses, right? But only 20,000 30 users per campus, but hundreds of patients, right? We have people living there. And we did an entire network refresh, changed the SSIDs and the Wi-Fi passwords, because that's what we did. That was our standard. Well, we gave all 20 employees, right, the passwords, and then we got them enrolled. We forgot about the 100 patients that use those SSIDs.

Absolute chaos.

And we went and we forced— yeah, absolute chaos.

And then—

The next thing, more operational burden. We put all the content filtering on because that's what you do in a security environment. Well, when it comes to patients, it's like people staying at a hotel. They don't want to hit those walls saying, "We're going to not let you go to these websites." Yeah. More chaos. So we end up going through hours and hours and hours of redesign because we never had a conversation. Yeah. We never understood the actual impact, as you're saying. It's, and I'm curious of your thoughts on this, whether you're bearish or bullish on the idea, but we don't do enough in the MSP world to teach our teams and educate them on having true conversations that aren't just let me wait to tell you how you're going to do it. Right, the whole idea of compromise and like you said, bespoke consulting. I don't think anyone's talking about that.

I saw something on YouTube the other day, and it was this idea that, you know, we have a lot of people coming into the industry that are quite young businesses, let's just say. You know, they've been in operations for a couple years, 3 years, and I think the first 5 years are when you get good, and the experience is kind of what helps you see peripherally some of the issues that are going to pop up when you do this, when you deploy that. And I think that training internally, even for your sales teams, if you have dedicated sales teams— obviously this happens as you grow your business— but when they don't understand necessarily the ramifications, they're just trying to sell a project to the client, this creates sort of mismanaged expectations right off the bat. So I think there's a lot to learn and evolve and work into the process to educate the client, make sure everybody knows, and phase out some of these things. We talked about the Big Bang. A lot of what the clients will accept is the perception of reduced risk, and how you do that is you separate out some of the things into phases. And take it a little bit slowly.

Well, take it slowly and recognize that they're going to have to bite it one bite at a time. Right. How do you eat an elephant? One bite at a time. You're going to have to give them that opportunity.

Yeah.

And if not, you're just going to create friction or you're going to be that guy, as Alex says, right? Ring, ring. Give me money. And that's how they're going to perceive you. Yeah. So anywho, I appreciate it. Fun conversation. Other than that, guys, thank you for watching and we'll see you guys. I'll grab somebody else here in a minute.