How MSPs Can Help SMBs Avoid IT Debt

Posted by Eric Sokolowski  /  October 6, 2016  /  MSP   —   No Comments ↓

angry businessman handcuffed by IT debtFor MSPs and many IT pros the concept of IT debt isn’t new. That’s unlikely to be the case for your SMB clients’ leadership, who might instinctively blame the widening gaps in their application portfolio on a limited IT budget.

Talking to SMBs about IT debt

As your SMB’s technical advisor, you can better position yourself as a strategic partner when you intervene and help them confront the issue before it gets out of hand. But where do you start that conversation?

Explain it in plain English

Gartner coined the term in 2010. They estimated the global debt was valued at $500 billion - with the potential to exceed $1 trillion by 2015. By their definition, IT debt is: The amount of money it would take to clear the maintenance backlog and bring an organization’s application portfolio up to a “fully supported current release state.”

You can practically see the eyes of your SMB leadership glazing over with every syllable in that definition. This calls for a more relatable analogy.

Have them imagine their home has a leaking roof, or their car has an engine issue. The longer they avoid the needed maintenance, the more risk they are taking on and the more extensive (and costly) the repair could be. Be sympathetic about this as you discuss a corrective course. Budgets get tighter and leaner every year - sometimes resulting in out of date software and systems.

Explain why they should care

Continuing with the house and car analogy, an ignored (or unknown) issue could lead to devastating consequences. Left unaddressed, an SMB’s IT backlog could cripple the organization. Inform them of the security threats born from out-of-date applications, as well as the risks of internal system failure or data loss. They should also consider the fiscal implications. Tightly-strapped budgets could be painfully bruised by emergency tech support needs, an inability to serve their clients during periods of downtime, and other unexpected consequences.

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Help them determine the source

As you think about your own SMB clients, try to isolate what were the catalysts for their current situation and how it could be stopped going forward. In his post for Network World, Derek Britton cites a 2014 study identifying these possible sources:

Historical IT investments

The IT world is highly complex; supporting this complexity is an onerous task and previous IT investment decisions may have been a good idea at the time but are now a high burden to keep running.

Current IT prioritization

With 70% of all IT spend typically directed to 'keeping the lights on,' clearing the backlog isn't perceived as being a revenue-generating activity, and thus it may go under the radar in favor of more customer or revenue centric initiatives.

Human resources

The lack of appropriate skills is another potential issue, because identifying the solution is one thing but getting staff to resolve it can be quite another.

Unplanned backlog

Pre-ordained, planned work on the backlog is one thing, but IT priority is seldom isolated from the business in this way...Compliance projects and M&A activities typically find their way to the top of the list unannounced, pushing other backlog activities further down the list.

New technology/innovation

Many CIOs and IT Managers will point to the external pressures – such as the disruptive technologies companies must work with to maintain market share – that are causing them to delay other tasks.

Vendor Relationships

Filtering the must-do from the nice-to-have and ensuring the right technical and 3rd party strategy is in place is an important IT task.

The path to recovery (and profit)

Closing the gap begins by understanding the actual width of the chasm. If they don’t have one currently, or if it’s woefully out of date, offer your SMBs assistance to create an annual status report for their application portfolio. Gartner suggests making sure this report:

  • Can be easily absorbed by anyone in the business.
  • Details the number of applications currently in use, acquired, and decommissioned over the last 12 months.
  • Factors in current/projected costs to operate, sustain or improve the application assets.

In their words, Producing an annual report will not bring about a galvanized response, but dealing with the huge backlog of application maintenance and upgrade activity is never going to generate galvanic activity — there will always be more-pressing problems that the business will need to deal with…However, over time, the steady drip of information into the management team will start to bring about changes in attitude and develop a willingness to engage in dealing with IT debt.

Above any root cause or set action plan, the most important aspects of a recovery strategy is patience and focus. It’s never a quick fix. If there was a magical app that could instantly update any organization’s application portfolio, we wouldn’t see $1 trillion in global technology debt. So, as you guide them through the upgrades—with a timeline that’s manageable by their terms, pitch application training solutions, like those offered by KnowledgeWave, to help stay ahead of future changes, improve application fluency, and methodically close the gap.

Discussing your SMB’s potential technology debt isn’t an easy conversation to have. It could be too ambiguous or difficult to comprehend. But it is a critical conversation worth having. Positioned right, your clients will be grateful for your consideration of their wellbeing (in addition to solidifying additional revenue for your MSP business.) It goes a long way towards ensuring the organization’s success, as well as strengthening your role as their trusted strategic partner.

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