How to Plan for Your Transition to Managed Services

Making the transition to a service-based business model may seem daunting, but there are steps you can take to create a reasonable plan for the future.

CI Staff

Think of the service-based business model in terms of bundling together the hardware, software, services and support that your clients need and then charging them a flat monthly fee for the entire bundle.

Adopting this managed service model, although challenging, will help you develop this stream of predictable, recurring revenue.

Thinking about making the switch? First you’ll need a solid, reasonable, and written plan with specific goals and objectives.

THE ULTIMATE GUIDE TO AS-A-SERVICE

Tips, advice, and long-term solutions on how to transition your business to an as-a-service model, and why it’s beneficial to do so.

Part 1: Why Change Your Business Model?

Part 2: How to Plan for the Big Transition

Part 3: Managing Cash Flow

Part 4: Adapting Your Sales Strategy

Part 5: Transitioning Your Existing Clients

Part 6: Business Process Automation

Part 7: How to Retain Clients

Check back for updates and new sections of the Ultimate Guide to As-a-Service to be released on CommercialIntegrator.com.

It is important to understand where you’re taking your business and why, and be able to communicate that end objective to your employees so they understand why you’re changing comfortable processes.

It is also helpful to transition in stages. Make a plan that is reasonable and achievable, whether that means transitioning over two years or five.

Decide how much of your annual revenue you’d like to be coming from monthly recurring revenue from managed services. Then plan to ease that percentage up year after year.

This Guide to As-a-Service suggests considering a three-year plan for transition, with the expected percentage of service-based recurring revenue growing each year. Get the details here.

There are many possible approaches to this transition. You might choose to sell smaller deals as managed services while continuing to close larger deals as traditional sales. Or you might decide to sell every new deal as managed services, but fall back to a traditional sale if you meet serious objection.

You could also work on slowly building your managed services bundle over time. Figure out what will work for you and your business and write it into the long-term plan.

And now for the big question, should you only offer managed services?

Read the Ultimate Guide to As-a-Service to answer this question and any more you might have over the course of your transition.