Not every business is large enough to have its own CIO, so instead of employing someone, an MSP or a contractor is oftentimes hired to fill the role. While MSPs are properly trained in the services and offerings they provide, they aren’t always well equipped to tackle the business challenges CIOs face daily. By understanding how CIOs transform businesses, managed services providers can improve how they manage technical environments and deliver business results effectively as vCIOs.
Who Is Virtual CIO?
vCIO is the service that MSPs offer to customers. It refers to a dedicated MSP employee or a team managing the IT infrastructure of the client’s company and planning its growth and development.
vCIO responsibilities are:
- Plan the technology roadmap for the next period
- Create budgets year over year
- Meet monthly/quarterly/annually to keep management aware and involved in IT evolution as the company grows
- Remain aware of the business' goals as to propose relevant technology solutions to accomplish them
- Advise on best practices
- Keep the company aware of technological trends relevant to their industry
- Become a business owner/executives go-to for ideas for the business, as IT will more than likely be involved
- Keep business owners/executives aware of compliance requirements with suggestions and plans for adhering to them
- Speak to clients regarding large technical issues/incidents
- Build relationships with all key vendors that play a role in the business' technology stack
MSPs take care of operational tasks, they fix the current IT problems. A vCIO is a person who fills a strategic role for an organization regarding information technology. A tech advisor at the highest level.
Some MSPs stay away from using the "vCIO" word but do what a trusted advisor does: helping a client with planning, assisting with decision making, looking out for their interests.
Why an MSP Should/Should not Offer vCIO
- By becoming a virtual CIO, you move into the boardroom as a key decision maker. You get to add immense value to your client's business, and your client gets a trusted advisor in you.
- You can promote the services of your MSP to a client.
- Sometimes, you are told you are given autonomy to decide but in reality, you have to pass it by the boss.
- Possible conflict of interests as vCIO is supposed to put clients' interests above MSP’s interests.
Who Usually Hires vCIO
There are a couple of reasons companies hire MSPs to be their vCIOs. Some businesses contract MSPs to act as their CIOs. Other businesses use MSPs to support their CIOs and internal IT teams.
As far a size, typically, larger clients with in-house support consider using vCIOs. Besides other responsibilities, these clients often rely on vCIOs for strategic technology planning.
A vCIO can help SMBs be more proactive. When working will smaller clients, you can add a vCIO service to one of your bundles and conduct a quarterly vCIO meeting, where you can advise the client on their IT strategy.
How Do You Price vCIO?
A virtual CIO charges according to either an hourly rate or a flat fee.
Basically, the consulting rate is multiplied by the expected workload per month. Then that’s added to monthly billings.
It’s as simple as that.
vCIO and Sales
On one side, it’s great a vCIO can promote his managed services to a client, but here’s the thing: You can't be an impartial vCIO if you're selling the services you’re budgeting for. It's a huge conflict of interest.
Here’s what you can do to get around that: Get three quotes, and if yours is the best rate and fit for the client, then it’s perfectly fine. It’s a standard practice in most industries, and as long as you're doing it fairly, then it’s perfectly above water.
This also gives you a big advantage. You get to see your competitors’ rates and packages, so you can price yours to be just under competitor pricing.
How to Add vCIO to Your Offering
Every MSP should do strategic planning with clients.
1. To kick-start the vCIO process (the strategic planning process), find someone within your business who will be your vCIO.
2. Then, set quarterly goals for your vCIO. Each quarter ramp up your vCIO’s goals. There are solutions MSPs can use to assist their vCIOs with setting goals.
3. There are vCIO tools on the market (for instance, Strategy Overview), so use them. Without tools, vCIOs are operating less efficiently than peers. (Imagine running a helpdesk without a ticketing system?)
Before developing strategic plans, rank your current clients. Divide them into three buckets: A, B, C (best, average and worst). Your vCIO should focus strategic planning efforts on the first two groups first (worry about the last bucket later in the year).
All new clients start with the vCIO process during on-boarding. When taking on a vCIO role with a client, ensure there’s a process in place. With one, MSPs are more likely to have happier clients and teams, and increased profitability all around.
While many MSPs are familiar with the vCIO role, they may not be well acquainted with its responsibilities and the process itself. Understanding how sales and pricing plays a role will help you and your customers get the most out of your vCIO offering.