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5 Business Model Enhancements for Successful Cloud Transformation

Posted by Jeff Salanco on Apr 5, 2017 10:00:00 AM


There is an incredible wave of disruption in the IT Channel driven by digital transformation and the Cloud.  What sets the successful managed service providers (MSP) apart from those that will underperform is a robust and unique go-to-market strategy.

But the design of an innovative go-to-market strategy can be challenging. For an MSP to truly disrupt their current business model, they have to look beyond incremental business improvement activities to find more impactful changes that will support transformation. MSPs need to make a concerted effort, driven by five key exercises, to drive true disruption of a business model.

Look at the Market Differently

Successful MSPs have a deep understanding of their market and the demographics that drive it.  But to develop a disruptive go-to-market strategy that takes full advantage of this knowledge, it’s critical to look at the market differently and identify a niche that makes strategic sense. 

Keep in mind geographic borders are being redrawn because of cloud technology and the business requirements of the market are shifting due to digital transformation. 

Identify New Customers

The ability for an MSP to develop a well-defined customer segment is the foundation of a successful go-to-market strategy.  There are two components that are key to this development process. First, the ability to define their own niche segment through attributes that all customers in the segment share creates clarity of go-to-market purpose for the MSP.  Second, once the segment criteria are defined, a review of the size of the segment helps the MSP to understand the possible scope of the new go-to-market initiative, ensuring that the segment is unique but still meaningful in size.

Enhance Customer Empathy

Once an MSP has validated a niche market opportunity and has an understanding who they’re trying to help within the market, it can be easy to fall into the trap of starting the process of developing innovative solutions. But this can be a huge mistake. Instead, successful MSPs often take a moment to immerse themselves into the world of the potential client. 

They leverage a series of techniques to accomplish this, but one simple exercise is to work as a group to complete an empathy map for the target customer to document what the client is thinking, feeling, hearing, and seeing each and every day. This gives the MSP a better understanding of the challenges and opportunities they face relative to the niche market identified.

Innovate through Value

Once the MSP has clarity about the customer segments and personas within that segment, it’s time to finally look inward to explore ways to innovate and design cloud offerings and services that really make a difference. This is where an MSP develops their unique intellectual property (IP) that supports their go-to-market motion. 

And while many organizations pigeon hole IP into software code or patented offerings, it’s important to take a broader view. IP can be a customized business process, a unique culture, or a dynamic customer engagement methodology driven by a combination of innovation points.

One process that MSPs are leveraging to design IP through the innovation of digital transformation is the lens outlined by Larry Keely in the book Ten Types of Innovation. Innovation can take on very different forms.

Initiate Customer Touch Points

Once an MSP knows the who, how, and what, it’s time to get the word out. But how? While MSPs have a solid grasp of the current engagement methods, a new go-to-market strategy may demand a change.  The ultimate goal of this part of the process is to figure out the best way to get information related to your innovation in front of the potential client.

Regardless of what engagement methods your team identifies, a best practice is to outline them using a customer touch point template. This provides clarity around the full journey. A popular methodology is the Accenture Non-Stop Customer Experience Model, a framework used as a foundation to plot content types and delivery points across a customer journey.

An MSP’s ability to step away from their current business strategies and tactics can be a critical step in fully recognizing the opportunities available as a result of the market shifts driven by digital transformation and the Cloud. The development of a new way of delivering value to the market is no easy task and requires real change in the business. A concerted effort, independent of current business operations, needs to be undertaken to drive true disruption of a business model. 

Tags: MSP