The skills, efforts, money and other resources it takes to build a successful Managed Services Practice from the ground up can be overwhelming. Everyone underestimates the resources it will actually take to build or buy one, because the focus needed from both management and technical resources is constant. As a result, many of us are guilty of “cobbling” together a solution in the heat of the opportunity. That may sound like a reasonable solution, but cobbling a Managed Services Practice together can create more problems than you could imagine. (I realize that this happens quite a bit in the Federal and SLED space to meet contract specifications, but organizations those markets are pros at cobbling and do it well.)
I have attempted a “cobble” in the past, when the organization I was in did not have all the expertise/resources needed to support a client. To respond to the opportunity, we scrambled to find a “partner” who would meet the needs of the contract, fill in the blanks we had and was in compliance. In this case, and in many others, we could not get a top tier partner to join with us, as we were usually competing against them. When this happens, you are usually dealing with an organization that someone “knew” about or knows “someone who works there.”
After identifying the partner in compliance, everyone gets on a call and talks about how great the opportunity is and how the two companies align and all the other opportunities that will come from this opportunity (aka: “Happy Ears”).
What usually happens, despite those Happy Ears, is you lose the deal, because there is overlap in resources. If you lose, the conversation is always self-justifying, and you’ll hear, “It probably would not have worked anyway.”
But what if – god forbid – you win?
That’s when the fun starts. Usually, the exact relationship was not defined, there are gaps in the solution, the terms between the two companies were not completed or there was some other miscommunication. As a result, the deal ends up not being as good for one or both companies. All those other “opportunities” that this “partnership” was going to spawn? They never materialize. Everyone goes back to a single-line approach of selling what you can deliver.
It’s no wonder why finance and legal teams are so skeptical when a sales team arranges a cobbled together approach. Salespeople have endured enough hard knocks to earn their much-needed optimism. We get told “no,” and we are back the next day anyway with a “different” approach/offering.
That’s why we are so good at coming up with cobble solutions, even when finance and legal teams want to remind us of all the roadblocks and sales conflicts we might will encounter. I am sure there are times that the “cobble” approach has succeeded, but that is not the norm.
Here’s what a cobble approach looks like (compared to a build/buy approach here) in terms of the “realities” of what you need to be competitive in the space:
Cobble
Integrate & Oversee
Financial
• Terms
• Cash Flow
• Risk
Integrate & Align
• Multiple Service Providers
• Integration of Multiple Interfaces
• Service Levels
• Price Models
Manage
• Internal Resources
• Manage Service Providers
• Ongoing Vendor Onboarding
Create/Refine
• Process Integration
• Governance
• Statement of Work
• Marketing
• Collateral
• Agreements
The bottom line is that if you are going to “team” with an organization it needs to be a strategic decision and thought out thoroughly – and strategically – beforehand. And I mean all aspects of the relationship. Not only do you need to define the technical/resource solution, but you also must define account control, terms and conditions, payment terms, service levels, service credits for missed SLAs, etc.
In my next blog, I will explain the advantages of the strategic partnership approach and some ways to achieve it.
