4 Virtual CIO Services Mistakes You Must Avoid

Clearly define your offering and the scope of your work, and only do business with clients who understand the value of your services.

Offering “virtual CIO services” is a trend in the managed services space, but it takes more than rebranding your current services as a vCIO offering. Ben Schmerler, Director of Strategic Operations for DP Solutions, says, “It’s important that if someone says they are taking the vCIO role, that they really understand what the role is, and that it’s not just a buzzword. Simply identifying things that are old and need to be replaced, or telling a client that they have to renew support on a firewall is not really providing anything strategic or valuable. It’s order taking. If you repackage your salespeople into vCIOs just because it sounds good, you will actually move further from being a trusted advisor than if you had made no change at all.”

Providing virtual CIO services the right way takes planning, strategy, and commitment as well as avoiding these mistakes that can minimize the value you deliver to your clients and your business growth.

1. Not Defining Your vCIO Offering

Schmerler says the first step MSPs should take is defining what the vCIO role is for your MSP business and then figuring out how you want to deploy it. He says at DP Solutions, they offer vCIO services as a part of their managed network services agreement, so it’s offered along with more traditional services like support desk or managed backup. “vCIO services include strategy sessions where technology is constantly evaluated and strategized during regularly scheduled visits,” he says. “And when we say strategy, what we really mean is having business discussions about the goals of technology, as opposed to bits and bytes, which is a trap many MSPs fall into.”

He says virtual CIO services shouldn’t fall under traditional break/fix, project services, or service desk.  Instead, you should define vCIO services by business questions and goals, and they should transcend the equipment in place to focus more on justifying (or disqualifying) technology application for the client.

2. Working with the Wrong Clients

Virtual CIO services can be beneficial to enterprise organizations without in-house CIO or smaller businesses that lack resources. Schmerler says businesses in verticals such as healthcare, legal, financial services, and other professional services with 20 to 200 employees are often a good fit. He stresses, however, that a prospect’s size and industry aren’t the only factors you need to consider. You also need to consider the reasons they are looking for vCIO services, such as compliance requirements or complicated business challenges. Schmerler says you also need to think about how the client perceives and values technology, whether they see it as something that can enhance or improve their business.

Another important factor to keep in mind is the client’s personality and mindset. “vCIOs often don’t work out very well in environments where decision-makers want to dictate everything and turn the vCIO into an order taker,” Schmerler says. “But if the decision-maker is a savvy businessperson who focuses on their expertise in the business as opposed to technology management, vCIOs can mesh very well.”

“Not all business is good business,” he says. “To have true business relationships that MSPs need to have to really offer a vCIO service, it’s a two-way street. For most MSPs in 2019, if they looked at their entire book of business and every client they support, they probably will have many clients where this kind of approach won’t work.” He says many MSPs operate under break/fix models, have block time/retainer clients, co-managed arrangements working with IT departments, and other models where the vCIO service wouldn’t be a good fit.

“Let your vCIOs focus their efforts with clients that will most appreciate it, and you will see the best return for your clients, your revenue, and your cost of operations,” Schmerler says.

3. Not Drawing Clear Lines

A common mistake for MSPs providing virtual CIO services is not clearly defining in the service agreement what is included. He says you may not want to include services such as identifying potential business applications to deploy or compliance assessments because they’re open-ended in nature. “Lines have to be drawn,” says Schmerler. “We can’t let vCIOs get overwhelmed with one client’s unlimited requests because their responsibilities within the service agreement are not well defined.”

4. Not Staying Focused on Your vCIO Role

To ensure long-term success, Schmerler says the vCIO has to stay focused on the role. “A lot of great employees have a tendency to try and own every issue, and that kind of enthusiasm is admirable,” he says. “But stay focused on the client’s business goals and strategy to use technology to achieve them. Time that is not invested in achieving the client’s business goals will impact ALL clients.”

Are You Ready to Become a Real vCIO?

Schmerler says, “Even in 2019, many IT service providers are still stuck in the break/fix world, with a race to the bottom when it comes to things like price and service offerings. The reality is that when IT service providers operate that way they have no actual client loyalty, and it is only a matter of time before a cheaper company comes along, or a shift in the client’s management occurs to displace you.”

He says having vCIO services is a sign of an MSP’s maturity and depth of service offerings. “A good vCIO is ‘sticky.’ It is very hard to get rid of an IT service provider that truly masters the concept of being a trusted advisor, as opposed to just talking about it,” he says. 


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The former owner of a software development company and having more than a decade of experience writing for B2B IT solution providers, Mike is co-founder of XaaS Journal and DevPro Journal.