leading practices for partners - cisco...• take the profile assessment to determine which profile...

Building Your Managed Services Practice Based on Cisco’s Smart Care Service

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Leading Practices for Partners

TM

September 19, 2007 Building Your Managed Services Practice Based on Cisco’s Smart Care Service Cisco Confidential. A printed copy of this document is considered uncontrolled

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Contents

Contents............................................................................................................................................... 2

About This Guide ................................................................................................................................ 4

Overview ......................................................................................................................................... 4 Intended Audience......................................................................................................................... 4 How to Use This Guide.................................................................................................................. 4

Smart Care–Based Managed Services Overview ............................................................................ 5

What Are Smart Care–Based Managed Services? ..................................................................... 5 Customer Benefits of Cisco Smart Care–Based Managed Services ....................................... 6 Why Is This Important for Partners?............................................................................................ 6 Primary Steps to Building a Smart Care–Based Managed Services Practice ......................... 7 Costing and Pricing Considerations............................................................................................ 8 What’s Next? .................................................................................................................................. 9

Partner Profile Assessment ............................................................................................................. 10

Four Partner Profiles ................................................................................................................... 10 Determine Your Partner Type ..................................................................................................... 11 What’s Next? ................................................................................................................................ 13

Profile 1: Managed Service Solution Provider ............................................................................... 14

Advantages and Benefits ............................................................................................................ 14 Challenges.................................................................................................................................... 14 Possible Business Model for a Managed Service Solution Provider ..................................... 15 Action Plan: Managed Service Solution Provider .................................................................... 15

Profile 2: Project-Based Services Provider .................................................................................... 16

Advantages and Benefits ............................................................................................................ 16 Challenges and Considerations ................................................................................................. 16 Possible Business Model for Project-Based Services Provider[[NOTE: In artwork, please change IOS to Cisco IOS Software (twice).]]............................................................................. 18 Action Plan: Project-Based Services Provider ......................................................................... 18

Profile 3: Deep Technology Solution Provider............................................................................... 19

September 19, 2007 Building Your Managed Services Practice Based on Cisco’s Smart Care Service Cisco Confidential. A printed copy of this document is considered uncontrolled.

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Advantages and Benefits ............................................................................................................ 19 Challenges and Considerations ................................................................................................. 20 Possible Business Model for Deep Technology Solution Provider........................................ 20 Action Plan: Deep Technology Solution Provider.................................................................... 21

Profile 4: Transaction-Focused Partner.......................................................................................... 22

Recommendations....................................................................................................................... 22 Action Plan: Transaction-Focused Provider............................................................................. 22

Strategies for Successfully Implementing Smart Care Services ................................................. 23

Business Development Strategies............................................................................................. 23 Pricing and Delivery Strategies.................................................................................................. 24 Service Bundling Strategies ....................................................................................................... 25

Additional Resources ....................................................................................................................... 26

Legal Disclaimer................................................................................................................................ 27


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About This Guide

Overview This guide will assist you in establishing the business benefits, economic factors, and market opportunity for implementing Smart Care–based managed services in your business. Partners reading this leading practice document should have a clear understanding of their business type and the advantages or challenges involved in implementing a Smart Care–based managed service offering in your business. Following the guidelines in this document will help you build your practice with greater profitability and customer satisfaction. In addition, you will know how to locate the Cisco tools, templates, and programs available to help you achieve your business growth goals.

For more information about other leading practice documents, visit www.cisco.com/web/partners/support/steps-to-success/leading_practices.html.

Intended Audience This guide is intended for the following audiences:

• Executive management • Operations management • Project management • Sales management • Marketing management

How to Use This Guide Cisco® has developed many valuable documents and tools to assist partners in the creation of technology practices and business profitability. Rather than repeat information covered in other Cisco materials, we reference existing documents, Websites, and research articles throughout this document. As you read this guide, review the various reference materials indicated for each step. This will help ensure that you use all of the recommended material.

To gain the maximum benefit from this guide, follow these steps:

Step 1: Read the Smart Care–Based Managed Services Overview chapter to understand what the services are.

Step 2: In the Partner Profile Assessment chapter:

• Read the partner profiles to understand the characteristics of each. • Take the profile assessment to determine which profile fits your business profile.

Step 3: Read the Profile chapter that matches your assessment. Follow the action plan to effectively build your Smart Care–based managed services practice.

Step 4: Review the Strategies for Successfully Implementing Smart Care Services chapter for guidance on how to move forward with some of the ideas and concepts outlined in this document.

Step 5: Use the Additional Resources as a reference to direct you to resources and tools that will assist you in better understanding the information contained in the document.

September 19, 2007 Building Your Managed Services Practice Based on Cisco’s Smart Care Service Cisco Confidential. A printed copy of this document is considered uncontrolled

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Smart Care–Based Managed Services Overview

What Are Smart Care–Based Managed Services? Cisco Smart Care–based managed service is an innovative new service offered to Cisco partners that combines networkwide technical support with proactive network monitoring, assessments, and remote repairs, providing an end-to-end network managed service that partners can deliver to end customers.

Cisco Smart Care–based managed service verifies that the network is secure, reliable, and functioning optimally, helping customers to improve employee productivity and get more from their technology investments. Specifically, the Cisco Smart Care–based managed service:

• Verifies that the network is secure and efficient

• Delivers dashboard visibility into network performance

• Provides information to better manage and improve the network

• Reduces the time and effort necessary to keep the network running optimally

• Allows you to foresee potential problems before they affect your business

• Offers you the combined advantages of Cisco and its partners in a single service offering

First and foremost, Smart Care–based managed services are partner added services combined with Cisco provided premise-based monitoring bundled with Cisco SMARTnet® Service. They are services that can integrate with or augment your current offerings. The service, in conjunction with partner branded offerings, provides the following:

• Network-level support

• 8x5 phone support backed by Cisco Technical Assistance Center (TAC)

• Next day hardware replacement

• Software updates

• Cisco IOS® Software updates and upgrades

• Proactive bug repair

• Quarterly health check

• Annual security assessment

• Partner delivered services

Figure 1 depicts a typical Smart Care–based managed service implementation.

Figure 1 Smart Care Service Implementation Example


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Customer Benefits of Cisco Smart Care–Based Managed Services

For customers, the Cisco Smart Care–based managed service:

• Increases network visibility and provides you with the information you need to efficiently manage and continually improve their network

• Improves the uptime, security, and performance of their network through ongoing monitoring and periodic assessments that allow you to address problems before they affect their business

• Allows their IT staff to operate more efficiently by reducing the time and effort required to keep their network running optimally

• Enhances their employee productivity and their responsiveness to customers through improved availability of their essential business applications

• Optimizes their business profitability by helping them get the most from their technology investments

• Simplifies their contract management and maintenance requirements through a single service contract that covers all of their Cisco devices

• Combines the expertise and service advantages of both Cisco and Cisco certified partners into a single offering

Refer to the Cisco Website for more information about these and other related Smart Care–based managed services and solutions: Products & Services>Services>Technical Services>Cisco Smart Care Service.

Why Is This Important for Partners? The addition of Smart Care–based managed services provides you with a number of primary benefits, most importantly:

• Increased profitability: Smart Care–based managed services give you an opportunity to provide high margin support and to monitor services to customers.


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• Differentiation and competitive advantage: Smart Care–based managed services are only available to authorized Cisco partners and will provide a primary differentiation against third-party partners.

• Increased customer loyalty: Monitoring and managed services provide a way to stay in contact with customers through an ongoing relationship. The Smart Care–based managed services offering is not a one-time sale, but an entry into an ongoing proactive relationship that will build customer value.

• Business growth opportunities: By using the Smart Care–based managed services, you can grow your business capabilities without the initial investment required for in-house or third-party developed managed services. The solution is scalable, so the risk of growth management relating to this service is greatly reduced. Customers that have standardized using a Cisco infrastructure will need this service, so the market for this new product should be easy to identify.

• Low cost of entry and ease of use: The Smart Care–based managed services offering does not require complex certifications, high-end skill sets, or an existing network operations center (NOC) or managed services infrastructure. Therefore, implementation and ease of use are at the highest level possible.

Primary Steps to Building a Smart Care–Based Managed Services Practice

There are a number of primary steps you must consider when deciding to implement Smart Care–based managed services into your portfolio of solutions.

• Step 1: Gain awareness of the product and program.

What is Smart Care, and how does it benefit my company and my customers? What are the requirements to become Smart Care authorized?

• Step 2: Review your current business.

Can my business support a Smart Care offering across all functional areas? Is this something that we will be able to market and sell? How will we support this offering?

• Step 3: Create a business case.

What are the required investment and operational costs? How does the return on investment (ROI) match up with our up-front costs? Is a formal ROI study required?

• Step 4: Establish a go-to-market strategy.

Are Sales and Sales management onboard and excited? How will we coordinate marketing programs? How can we engage with local Cisco field resources? How will we train and incentivize our salespeople? What customer segment(s) will we target?

• Step 5: Execute.

Build a Smart Care–based managed service offering and customer engagement.

While the Smart Care–based managed service provides excellent opportunities for partners, not all partner types will be ready to gain advantage from implementing the service. It is important to recognize the market opportunity and financial investment required prior to implementing any marketing or sales plan.


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Additional information regarding the fundamental building blocks for Cisco partners looking to build their services business can be found in the Cisco Partner Field Guide or in the leading practices document titled Selling: Developing a Solution Sales Approach for Cisco’s Advanced Technologies.

Costing and Pricing Considerations When evaluating Smart Care services, it is important to review costing and pricing considerations that might affect profitability and market share, especially if the Smart Care–based managed service is integrated into an existing managed service offering.

Smart Care–based managed services can be implemented as part of an existing business or as a newly created complete managed services offering. In either case, you must understand the full cost and pricing implications in your business infrastructure and distinct market opportunity.

Four costing and pricing factors should be considered when building a Smart Care managed service offering:

• Partner specificity: What are the specific costs associated with implementing this technology, especially if it is linked to a fully managed service offering? What about items such as:

o Third-party applications or services o Help-desk staff and applications o Trouble ticketing and dispatch services o Device monitoring for PCs, server, and other primary services not covered by Smart Care–

based managed services

• Competitive landscape: There are many questions to consider when looking at your competitive landscape:

o How saturated is your market with regard to managed services? o Who else sells this type of service in your area? o Do your current customers already have this type of offering in place with you or another

provider? o Are there opportunities with your local Cisco office due to a lack of providers in your

geography?

• Marketing and risk mitigation: By using Cisco’s marketing and infrastructure, you can gain an accelerated market advantage for these offerings, a benefit not gained by building your own environment. To decide if managed services will work for you, you should:

o Determine the cost of market building. o Determine the inherent risks in implementing a new technology.

• Bundling and service integration: By combining Smart Care–based managed services with your existing offerings, you will have the opportunity to create additional margin and revenue opportunities. To do this, you must consider:

o How do you price bundled offerings? o How do you position monthly or annual contracts? o Can you convert existing SMARTnet customers to Smart Care service customers with limited

effort? o How many run-rate customers will it take to support managed services, onsite support, or

other services you do not currently offer in-house?

By reviewing and thinking through these various options and opportunities, you will start to build the framework for your business case and financial model relating to Smart Care–based managed services.


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What’s Next? In order to gain a greater understanding of how and why your business would benefit from implementing Smart Care–based managed services:

• Review the attributes for each profile in the Partner Profile Assessment chapter.

• Take the profile assessment test to determine which profile fits your business model.

• Review the Profile chapter that corresponds to your partner type.

Reviewing these benefits and considerations will help you determine if the Smart Care–based managed services offering will provide value to you and your customers’ business.


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Partner Profile Assessment

There are many different types of Cisco programs and partners. To best understand the opportunity represented by Smart Care–based managed services, this chapter highlights four distinct Cisco partner profiles. Review the profiles outlined in the table; then use the assessment in the following section to determine which category best matches your current business and technical readiness.

Four Partner Profiles

Table 1 shows profiles for the four partner types.

Table 1 Partner Profile Types

Partner Profile Description Managed Service Solution Provider

This profile has the following attributes: • Currently provides some sort of managed service offerings in

addition to its hardware and service sales. • Is familiar with recurring revenue models. • Has the necessary operations and legal infrastructure to support

long-term managed services contracts. • Has some sort of help desk and response system in place. • Has successfully integrated managed services into its sales and

marketing strategy. Project-Based Services Provider

This profile has the following attributes: • Provides broad-line solutions that include hardware, software,

and professional services. • Customers come to partner for a variety of technologies and

solutions. • Sales territory segmentation may be both horizontal and

vertical covering a broad range of customer types and industries.

• Service activities tend to be project based and have a defined start and end date.

• May have existing for-fee or for-free help desk or in-house support offerings.

Deep Technology Solution Provider

This profile has the following attributes: • Solution capabilities and specialization drive GTM strategy. • Have deep capabilities in a particular technology or set of

technologies such as security or unified communications. • Customer base can be broad, but offerings tend to be focused

on core capabilities. • May be a local go-to for sales and technical capabilities in


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Partner Profile Description primary offerings.

• Has some sort of help desk and response system in place. • Has successfully integrated managed services into its sales and

marketing strategy. Transaction-Focused Partner This profile has the following attributes:

• Focus is on hardware and software sales. • Services are limited to maintenance or selling of SMARTnet

contracts. • Sales activities are transactional. • Value to customer is based on price and delivery rather than

services provided. • Focus is on attach rate and renewals as core service strategy.

Why Four Profiles?

There are many models that partners follow in the delivery of professional services. By identifying profiles that align certain aspects of consistency or similarity, Cisco is better able to call out specific metrics, attributes, or leading practices that apply to that partner profile.

For example, a new services-based company requires introductory information and content that will help it get started. As a company becomes more adept at selling and implementing solutions, it will require more advanced information and different content. At the other extreme, a partner that has been successfully selling and implementing Cisco solutions for many years would require still different information and content.

In general, Cisco targets services-oriented partners for Smart Care–based managed services because:

• Smart Care meshes well with solution providers who are already pursuing a strong services-oriented business or a managed service* business.

• Most services-oriented solution providers already use heterogeneous network management to monitor the network proactively.

• Smart Care–based managed services enhance their capabilities by delivering greater value deeper into the network.

• Using a heterogeneous management platform enhanced by Smart Care’s capabilities delivers the greatest value of the network for both the partner and the customer.

However, these are very general categorizations. You may find information and content that applies to your business located in a completely different profile. Therefore, you should feel free to use and apply all the information you find applicable to your company needs.

The following section provides a simple process for determining which partner profile best aligns with your organization.

Determine Your Partner Type To determine which partner profile best represents your business, answer YES or NO to the statements under each heading. The list with the most YES answers indicates your partner profile.


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Managed Service Solution Provider Our Company … YES NO

• Sells Cisco products and SMARTnet contracts.

• Has an existing managed service offering that includes monitoring, either in-house or third party.

• Currently has managed service customers on annual or run-rate contracts.

• Provides in-house or outsourced Level 1 and 2 help desk services.

• Provides service SLAs relating to our support offerings.

• Uses an in-house service management or third-party platform such as ConnectWise or AutoTask to track trouble tickets and service incidents.

• Sells prepaid professional service contracts for onsite support.

Project-Based Services Provider

Our Company … YES NO


• Service offerings are predominantly project based (more than 60% of services revenue).

• Provides block hour agreements for ongoing support.

• Does not provide SLA-based incident management.

• Help desk offerings represent less than 10% of overall services revenue.

• Run-rate contracts for ongoing support represent less than 20% of overall services revenue.

Deep Technology Solution Provider

Our Company … YES NO


• GTM strategy is focused on a specific set of technologies, verticals and/or solutions.

• Carries advanced specializations such as unified communications.

• Service offerings are predominantly project based (more than 60% of services revenue).

• Run-rate contracts for ongoing support represent less than 20% of overall services revenue.

• Provides in-house or outsourced Level 1 and 2 help desk services.

• Considered a “go to” for specific solution and technology expertise by Cisco field offices.


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Transaction-Focused Partner Our Company … YES NO


• Has limited or no in-house professional services resources.

• Specializations limited to hardware specific offerings such as routing, switching, or wireless.

• Has limited or no managed service, help desk offering (less than 10%).

• Attaches SMARTnet as predominant form of product support.

What’s Next? Now that you’ve identified your profile type, review the Profile chapters to drill down into advantages, risks, and recommendations relating to your unique business type.

Not all business types are candidates for Smart Care services. In some cases, trying to implement a managed services strategy may be premature until additional business infrastructure is added or existing infrastructure is improved.

For additional information and resources, refer to the Additional Resources chapter at the end of this document.


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Profile 1: Managed Service Solution Provider

The managed services provider already understands the core financial implications of running a managed service practice. Since this partner profile already has some established offering, the objective is to extend down and get more customers acquainted with proactive service.

Smart Care creates a unique opportunity to bring proactive services into more of your customer base because of its lower price point compared to a full managed service.

Advantages and Benefits Advantages to integrating Smart Care–based managed services for this partner type:

• Easy to integrate Smart Care into business model due to experience with contracts, pricing, sales cycle, and operations.

• May allow you to use investment in tool sets to broader market.

• Offers the ability to target new customers with an entry-level managed service offering.

• Provides additional service revenue on devices specific to Cisco with the addition of proactive updates and upgrades.

• Offers new alternatives to cost conscious small business markets who have made investments in an infrastructure based on Cisco.

Challenges Primary considerations and challenges to be addressed by this partner type:

• Is the Smart Care offering competitive or complementary to existing managed services?

• Will Smart Care–based managed services erode the existing install base of managed service customers by offering a lower cost alternative?

• Will Smart Care–based managed services create revenue competition with existing managed service offerings? Will outside sales reps be willing to pitch Smart Care, or will pricing bands require incorporating an inside sales model separate from the existing sales force?

• Can existing tools be integrated with Smart Care–Based offerings to provide consistency across managed services and to provide an easy transition for customers?

• Will cost structure support the integration of existing tools such as trouble ticket systems, other monitoring and managing applications, and reporting tools?


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Possible Business Model for a Managed Service Solution Provider

Action Plan: Managed Service Solution Provider To move your Smart Care–based managed services business forward, follow these steps:

Step 1: Evaluate current managed service offerings and compare to services and capabilities offered by Smart Care–based managed services.

Step 2: Evaluate current customer base and target markets to determine if additional revenue can be gained where it was unavailable before due to size or cost.

Step 3: Discuss product offering with sales team to establish need in market.

Step 4: Evaluate gathered data to see if the addition of Smart Care–based managed services makes sense for your business.

Step 5: Engage with Cisco field service managers to discuss next steps, training, and implementation plans.


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Profile 2: Project-Based Services Provider

The project-based services provider converts end-to-end projects into a lifecycle selling structure using an implementation and support structure using SMARTnet or other manufacturer-based support agreements.

The strategy for this type of partner is to extend horizontally into new technology support with a low or no investment strategy.


• Allows you to use Cisco’s investment in high-end managed service offerings without having to incur the expense of building your own separate and possibly expensive managed service offering.

• Provides easy entry into a Cisco backed run-rate managed service offerings as an add-on to existing project work.

• Allows you to create your own unique value proposition with the customer by becoming a true partner over the entire lifecycle of the solution.

• Allows you to convert low margin CapEx projects to long-term, higher margin OpEx engagements for verticals such as public sector and education.

• Allows you to gain greater visibility into the customer environment and to drive technology upgrades.

• Positions you as a long-term trusted advisor less likely to be displaced by a low-cost technology only provider.

Challenges and Considerations Primary considerations and challenges to be addressed by this partner type:

• Does your company have a sufficient install base to warrant investment in and transition to a Smart Care–based managed service offering?

• Does your company have experience building partner branded service offerings?

• Does your company have experience with writing long-term contracts?

• Does your company have a plan to shift sales from product-based SMARTnet sales to Smart Care-based solutions?

• Does your company have the operational structure to operate both a project-based business model and a recurring revenue-based model?


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• Does your company have experience with accounting practices to recognize Smart Care-based revenue over life of contract rather than on product-ship or project-acceptance date?

• Does your company have the skills necessary to determine pricing and determine value of contract?

• How does your company pay a sales rep, and how does your company manage refunds in the event of contract cancellation?

• Does your company have access to legal resources for contract creation and management?

• Does your company understand the liabilities associated with long-term managed services contracts?

• Does your company have experience in marketing its own branded solutions? Typical partner resells solutions defined and marketed by technology provider.

• Does your company have a strategy to demonstrate new value proposition to customers as perception changes from a project-based partner to a managed services partner?

• Is converting a high-end billable engineer to Smart Care-based managed services economical?

• Does your company have processes and tools to capture current help desk and professional services hourly engagements and transition these services to a Smart Care-based offering?

• Does your company have the capacity and the will to invest in tools to provide value above and beyond Smart Care such as a help desk application or additional monitoring and managing applications?

• Are you willing to assign and create incentives to management personnel dedicated to the success of a managed services solution offering?

• Does your company have the relationship and can it effectively communicate with the local Cisco field offices to set expectations and create proper alignment for Smart Care–based managed services versus SMARTnet sales?


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Possible Business Model for Project-Based Services Provider

Existing PS

PrePaid Engineering Hours

Help Desk Support

Network Health Checks

Remote Dialin/VPN

Smart Care

Managed Services

Network Level Support8x5 Phone Support

backed by Cisco TAC

Next Business DayHardware ReplacementSW Updates Cisco IOS

Updates/UpgradesCisco IOS Identity Service

Proactive Bug RepairQuarterly Health CheckAnnual Security Assess

PS Hours, Help DeskVPN AccessReporting

Action Plan: Project-Based Services Provider To move your Smart Care–based managed services business forward, follow these steps:

Step 1: Review the considerations section above to determine if a managed services strategy makes sense for your business. Review the Cisco leading practice for partners document titled Building and Managing a Cisco VAR Managed Services Practice.

Step 2: Engage with local Cisco field service resources to establish a detailed action plan to gain necessary support for implementing a Smart Care–based managed services strategy.

Step 3: Review the current customer base to establish a target subset of customers that would be prospects for this type of solution.

Step 4: Plan and organize an implementation and support structure with your delivery and technical support teams. Determine which of your existing services, such as help desk or prepaid professional services, you would like to include in your managed service offering.

Step 5: Perform a pilot implementation with change friendly customers.

Step 6: Develop and execute a go-to-market strategy for additional installed base, targeting existing SMARTnet customers.

Step 7: Review and refine your plan paying close attention to customer experience and other primary performance metrics.


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Profile 3: Deep Technology Solution Provider

The deep technology solution provider has deep expertise in one or more of the Cisco advanced specializations such as security. Service delivery may be project-based or managed services based. In addition, these partners probably have existing help desk or other monitoring solutions, either in-house or third party, being used for existing customers.

Therefore, the objective for this partner type is to extend horizontally into new technology support offerings and engage in a lifecycle support strategy that includes proactive and reactive managed services for other Cisco technologies such as voice or networking. In the following diagram, the deep technology service being provided is security, and the partner is using Smart Care–based managed services to extend its service offerings into voice and network-level management.


• Easy to integrate Smart Care into business model due to some prior experience with contracts, pricing, sales cycle, and operations.

• Provides ability to target new customers with new technology-focused managed service offering.

• Allows you to eliminate entry point into existing customer base by targeting other technology areas not previously supported.

• Allows you to build revenue stream in support services in advance of deep technical expertise investment.

• May allow you to use investment in existing tool sets to broader market.

• Provides lower cost of entry point for small business customers standardized on a Cisco infrastructure.


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Challenges and Considerations Primary considerations and challenges to be addressed by this partner type:

• Does partner have skills in other technologies (such as network and unified communications components) necessary to support new business?

• Does the partner have the unified communications certifications to add Smart Care as a voice offering?

• Do Smart Care–based managed services integrate with or complement the existing managed service offering?

• Can sales force learn new skills to sell new technology-based offering such as Smart Care?

• Will existing contract templates work with Smart Care–based managed service offering?

• Will existing support tools for existing deep technology offering repurpose to support Smart Care–based offering?

• How does Smart Care pricing complement existing managed service cost and support structure?

Possible Business Model for Deep Technology Solution Provider


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Action Plan: Deep Technology Solution Provider To move your Smart Care–based managed services business forward, follow these steps:

Step 1: Review current customer base to determine if there are opportunities to sell additional managed services in noncore technology areas.

Step 2: Evaluate cost of integration and implementation of Smart Care–based managed services in your business if you do not currently sell broad-based managed services. Include contract, finance, and support costs relating to run-rate and contract services models.

Step 3: Engage with local Cisco field resources to map out s strategy to implement Cisco Smart Care–based managed services offerings.

Step 4: Create a strategic and tactical implementation plan to train, market, and sell Smart Care–based managed services offerings.

Step 5: Establish a pilot group of customers to receive services and implement and refine processes.

Step 6: Work to increase skill sets in new technology areas in order to provide other lifecycle services in addition to Smart Care–based managed services.


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Profile 4: Transaction-Focused Partner

The primary business focus of the transaction-focused partner is to sell Cisco products and SMARTnet contracts. This type of partner has very limited capabilities to provide project or run-rate managed services; therefore, the objective for this partner type is to begin to implement or convert projects to end-to-end lifecycle services.

Recommendations Smart Care–based managed services present current transaction-based partners with a future offering to sell to customers, but Cisco does not recommend that these partners engage in implementing this service until a more structured services organization is in place.

For more information on how to establish a services organization using Cisco leading practices, review the Partner Field Guide and the Leading Practice for Partners documents.

Action Plan: Transaction-Focused Provider To move your Smart Care–based managed services business forward, follow these steps:

Step 1: Continue to sell SMARTnet contracts with every product sale.

Step 2: Review Smart Care–based managed services literature to orient yourself toward the product features and benefits.

Step 3: Review the Cisco Partner Field Guide for information on how to build your services business.

Step 4: Engage with your Cisco field service representative to understand how to grow your business with Cisco services and solutions.

Step 5: Create and implement a services growth plan for your business.


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Strategies for Successfully Implementing Smart Care Services

The successful implementation of a Smart Care–based managed services practice depends on many factors. At a minimum, you will want to formulate plans that align all primary areas of your business, technical capabilities, customer mix, and field engagement opportunities with Cisco.

By establishing strategies that complement each other, you can quickly use the benefits of selling Smart Care services and enjoy the benefits of a closer, longer cycle relationship with your customers.

This section provides some of the strategies and considerations you might want to consider when developing and implementing a business strategy using Smart Care–based managed services.

Business Development Strategies There are two distinct approaches when deciding how to implement a go-to-market strategy and sales for your managed services offerings:

• Local use model

• Managed services model

Depending on the focus of your business and breadth or depth of your offerings, you may find that following one of these two paths makes the most sense. For partners that have been selling managed services previously, you should be comfortable with both scenarios.

Local Use Model If you are not offering managed services today, you may want to maintain a local focus as an authorized Smart Care provider until you are secure in providing this type of service. As a new paradigm for your business, the learning curve will be steep.

In the local use model, you would:

Use your existing installed base.

Utilize local talent and proximity to the customer as positioning benefits.

Focus on the value add portion of Smart Care and the additional value it brings to your customer’s business.

Bundle Smart Care services as an additional touch point for customer management.

Partners using this model are going to be limited in the size and breadth of their Smart Care–based offering to some extent and will most likely remain a partner focused on their traditional business using Smart Care as a value-added part of an overall portfolio of services and solutions.

Managed Services Model The managed services model focuses on expanding into new and remote markets with a remote operations focus for a Smart Care–based offering. This model focuses on building a more traditional managed service offering as its value proposition.

In the managed services model, you would:

Use existing go-to-market strategy for managed services, augmented by Smart Care.

Utilize Smart Care offerings to extend reach to smaller or more remote customers or other niche customers with an infrastructure focused on Cisco.


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Develop or have developed a business strategy around managed services, reoccurring revenue, and managed support services.

Both of these scenarios apply to partner profile 2: project-based partner moving to lifecycle services partner rather than profile 1 and profile 3, which are partners that are already in the managed service market.

Pricing and Delivery Strategies Your choice of business development and delivery strategy—using local talent and proximity or expanding into new and remote territories—will determine your cost structure, competitive advantage, and sales strategy and will differentiate you from other Smart Care–based managed service partners as well as other traditional managed service providers. Many managed service providers, in general, use 50 percent margins as a basis for pricing. Keep in mind that this margin target is only a basis, and the realized margin from managed services will probably be lower. Regardless, it is important to recognize that selling managed services requires a different pricing, sales, marketing, and delivery model than reselling products and professional services.

When deciding how to design and price your service offerings, consider the benefit to your target customers. For instance, if you have an existing relationship with your customers, and managed services are an add-on to the existing value added services you provide, consider pricing at a premium, using your value as a trusted adviser to your customer.

In contrast, if you are competing with other managed services providers for mind share, consider using a volume or velocity approach to selling and price aggressively. Sales engagements will be different from a traditional product and professional services model. Therefore, you may want to consider using an inside sales model to demonstrate and sell to a broader prospect base without incurring the high sales costs associated with a direct sales model. This will allow you to use your advantage of infrastructure while keeping your overall costs and pricing competitive.

In either case, price competitively to maximize your profitability and convert the most run-rate business possible, using Smart Care services as the foundation. The two models are explained below.

Local Use Model In this model, one of the principal competitive advantages you have is the presence of local engineering and support personnel for onsite support. Using this strategy it is possible to:

• Price Smart Care–based managed services offerings at a premium to traditional competitive managed services providers.

• Determine alternative pricing schedules for engineering and support resources based on whether or not the customer has a Smart Care–based managed services with you.

• Create a branded solution that speaks to your experience in networking and the co-branding of Cisco as a managed services partner.

Traditional Managed Service Model • Price Smart Care–based managed services offerings comparable to traditional managed services

providers.

• Possibly use an inside sales model to drive sales:

o Set up appointments by geography for managed services sales specialists.

o Package Smart Care–based managed services offering to sell remotely using demonstration or collateral.

• Try not to displace the local Cisco partner. Instead, use your Smart Care–based managed service as an offering above and beyond the customer’s local Cisco partner’s support.


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Service Bundling Strategies Some additional service revenue opportunities to consider when implementing Smart Care–based managed services may include:

• Selling prepaid professional services blocks

• Break/fix on-call professional services or products sold

• For-fee or for-free help desk for user (level 1) or IT (level 2) incidents

• Dial-in or VPN service for remote troubleshooting and diagnostics

• Network documentation of network topology

• Network disaster recovery planning and/or services

• Readiness review or health check on a monthly or quarterly basis

• Business technology review and planning sessions on a quarterly or annual basis


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Additional Resources

Resource Location

Building a Smart Business Guide Book

Solutions>Small & Medium Business>SMB Products and Support>Smart Business Communications System>Guide Book

Channel Incentive Programs Partner Central>Channel Partner Program>Channel Incentive Programs

Cisco Case Studies About Cisco>Changing Your Business>Case Studies

Cisco Managed Services Web Resouces

Managed Services for Small & Medium Businesses

Cisco Partner Field Guide Products & Services>Services>Services for Small and Medium Business>Services Literature>Partner Guide

Cisco Sales Training Partner Central>Partner E-Learning Connection (PEC)>Sales Central

Cisco Sell Technologies and Services

Partner Central>Channel Partner Program>Sell Technologies and Services

Joint Marketing Funds Program

Partner Central>Marketing Funds

Leading Practices for Partners Partner Central>Steps to Success>Leading Practices for Partners

Market Technologies and Services

Partner Central>Channel Partner Program>Market Technologies and Services

Marketing and Demand Generation

Partner Central>Sell Cisco Technologies and Services>Small, Medium and Mid-Sized Business>Small Business Select Partner Portal>Marketing and Demand Generation

Presentation Builder Partner Central>Channel Partner Program>Sell Technologies and Services>Presentation Builder

Smart Care Service References Products & Services>Services>Technical Services>Cisco Smart Care Service Service

SMARTnet Products & Services>Services>Technical Services>Cisco SMARTnet Service

Vertical Sourcebook Partner Central>Channel Partner Program>Sell Technologies and Services>Vertical Sourcebook

Steps to Success Steps to Success


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