Small Business Computer Consulting

Is your company in need of a good computer consulting firm?  You may need one, but you may not know how to find one.  This set of questions can help you get in-depth answers from prospective computer consulting firms and find out if they will be a good fit for your business.  

Resellers, Pure Computer Consulting Companies and Hybrid Technology Providers

As computer consulting firms during interviews,

1.     Do you resell tech products such as hardware and software?

2.    Are you a profit center, or can we shop for products elsewhere?

3.    If we shop elsewhere for our products, can we still use your computer consulting services?

4.    Are there any other vendors – ISPs or telephone companies – that you represent?  Do you get commissions or referral fees from specific companies?

Costs, Hidden Charges, Billing Procedures

Ask the following additional questions of your computer consulting company:

1.     What are your payment terms and billing minimums?  What do you consider “billable”?

2.    Are travel time, telephone support, e-mail/online support and remote support included?

3.    Do you have after-hour and emergency service fees?  What defines these terms?

4.    Do you have support contracts?  What are the costs and the benefits?

Client Reference Accounts, Case Studies, Testimonials

Also find out the following information from your prospective computer consulting firm:

1.     Tell me about one of your long-term small business accounts.

2.    Tell me about a recently signed client.

3.    Tell me about a client that just didn’t work out.

4.    Can you give me some references?

Research, Development and the Technology Curve

Also ask these questions about your computer consulting business’ ability to keep abreast of technology:

1.     How do you stay in touch with the latest tech developments?

2.    For what do you bill clients, and are there any gray areas?

Training and Knowledge

You need to also ask additional questions:

1.    Are you willing to provide in-depth training for users within my company?

2.    What kind of training do you provide for users?

3.    Will you train our internal guru to be more self-reliant, even if you miss out on billable hours?

The Main Idea about Computer Consulting Company Hiring

Don’t hire an independent computer consulting firm until you’ve determined the fit is right.  

Added By:  Computer Consulting Kit

Canada’s largest computer consulting firm CGI Group, Inc. declared its third-quarter profit on July 31.  The computer consulting firm said it would increase its presence in the U.S. market because of its higher profit margins resulting from cutting 600 jobs last year.  Its earnings rose 79 percent and its debt lowered.

Still CEO of the computer consulting business Michael Roach hopes to get rid of a gap between CGI’s revenue and profits by continuing to talk through its business strategies and which qualities make it stand out from competition within the U.S. market.  It will focus efforts on important investors.  

CGI’s U.S. growth rate is larger than that of the company as a whole and grew ten percent in the third quarter alone.  The computer consulting company will have its first investor day in New York in the fall.

CGI has plans to double in size in the next five years and look for acquisitions in the U.S. and Western Europe.   The company earned $64.4 million in the third quarter, up from $35.9 million during the same time period last year.  Reuters estimates that the company will get up to 18 cents per share before one-time items on a revenue of $937.7 million.

The computer consulting business is based in Montreal.  For more detailed information about its earnings, visit the attached link.  

Blogged By:  Joshua Feinberg

The news on Thursday that Dell would be acquiring ASAP Software in a continuing effort to make itself a presence with solution providers has many wondering whether the company is a positive or negative force in the industry.  Dell agreed to buy ASAP Software – a subsidiary of Corporate Express and one of Microsoft’s top resellers — of Buffalo Grove, Illinois for $340 million in cash.
    
Solution providers think that Dell will have more ability to deal with software licensing and more power, creating some pretty intense competition with those that wish to work with ASAP accounts.  However, others think it could be a potential partnership opportunity, depending upon how Dell handles its dealings with solution providers and VARs as part of these accounts.  

Dell is a top LAR of Microsoft too and often offers much more competitive software licensing opportunities and conditions than other VARs.  Last month, Dell caused some Microsoft VARs and solution providers some irritation when it decided that reselling Microsoft Open License software at cost as part of a promotion was a good idea.  This meant those purchasing SQL, Exchange, Office 2007, Windows Vista, Windows Server Standard, Small Business Server, Client Access Licenses, Project and SharePoint got an unbelievable deal.  This promotion signaled that Dell would be less likely to deal on a partnership level with solution providers that were working with ASAP, which is turning many of them off to the idea of working with the software giant at all.

Although Dell has claimed it is a new company, many solution providers don’t believe it could so quickly rethink its business strategy and be suddenly close with the solution provider channel.

Many solution providers also say that software licensing is a very small part of their businesses, so it is not a profit center.  If Dell treats it as a way to make money, it will not really affect many other VARs significantly.  Solution providers are much more concerned about the recent announcement that Dell had acquired managed services platform provider SilverBack Technologies.  This company partners with 150 VARs, and many are worried Dell will use it as an opportunity to sell remote network services directly to small and medium-sized businesses, thus cutting profit margins for solution providers.

Still, many believe that both the SilverBack deal and the ASAP deal combined indicate Dell is attempting in earnest to get more deeply embedded with other solution providers in the industry.  Some are thinking they should try to enter account discussions with Dell in preparation for increased involvement and competition.

For more information on Dell’s new position with solution providers, visit the attached link.  

Submitted By:  Computer Consulting Kit

When you encounter prospects for IT sales, you need to get to know their top 3 problems.  You might learn that their problems are not what you expected or can even help solve, in which case you can move onto the next prospect.  But you can’t succeed at IT sales if you don’t get prospects talking.

What Do They Prefer?

You need to get prospects talking about what they like and don’t like about their past IT support to get an idea of what type of support they are looking to get.  You also need to know in the first meeting if there is an emergency that needs to be handled immediately or if they are looking for an IT audit, site survey or tech assessment.

Sometimes prospects will want something totally different from what you are used to, but mostly they will ask for the above items.   

The Next Step of IT Sales

Moving prospects from free to fee as part of an IT sales meeting is about getting the answers to important questions about their technology problems.  You need to have something to offer them and proposals that address their needs.  You should bring blank forms with you so you are ready to close the deal as part of IT sales.

Blogged By:  Joshua Feinberg

Recently IEComputers announced a new program for IT consultants and other solution providers.  The IEComputers.com Partner Program offers IT consultants, system integrators and VARs with wholesale pricing on hardware and software.  It offers a web-based ordering system, next-day delivery and same-day product pick-up in some areas on over 300,000 IT products.

In business since 2002, IEComputers has offered IT consultants and other consumers the opportunity to purchase products online and now is adding a chance for its partners to earn cash back on certain purchases.

According to James Cornell, founder and president of IEComputers, typically IT consultants and systems integrators buy hardware or software from major chains such as Best Buy or from an online provider and gets nothing special in return save sometimes lower prices.  This new program for IT consultants offers a reward in the form of cash back on certain purchases with no extra cost to clients.

This new program offers two program levels:  Preferred Partner and Platinum Partner.  Those involved in the Preferred Partner program get instant access to wholesale pricing and web-based ordering with a $199 set-up fee and $19.99 per month fee with the option of cancelling at any point.  Platinum partners get a personally branded web-site and the ability for clients to order direct online with just a one-time $499 fee at sign-up and $29.99 in monthly fees.  A special offer for the first 100 IT consultants is currently running that allows them to get six months free of processing fees when they sign up for the program.

Submitted By:  Computer Consulting Kit

Micro small businesses frequently need to use internal gurus or free help, which is why the sweet spot is the best area for IT consulting.  Which rates are appropriate for the sweet spot (in U.S. Dollars)?

IT Consulting Range for the Sweet Spot

The rate range for the sweet spot of IT consulting (aside from for moonlighters or gurus) is typically between $50 and $125 or even up, depending on the skill set, niche and geographic service area.  However, if you want to project a professional image in the sweet spot small business industry, you should not be charging less than about $75 – $80 hourly.  

What is Your Lowest IT Consulting Rate?

$75 – $85 per hour should be the lowest you will accept for IT consulting.  And you should only charge that low rate when you have clients committing to you for a long period of time or signing service agreements.  Charging anything below this amount for your IT consulting services could find you going out of business.  

Blogged By:  Joshua Feinberg

Computer business Ingram Micro stated it would be expanding its services and reopening its East Coast Solution Center.  The center will offer U.S. and Canadian solution providers a variety of resources, including demonstration areas such as home theatre, digital signage, remote office, etc.  This investment by the computer business, specializing in distribution is part of a plan to create demand for sales.

The computer business’ center will be based in Buffalo, New York in a 1,000 square-foot building.  The Ingram Micro facility will be enlarged by 30 percent with over 100 suppliers and four full-time engineers.  The focus of the center will be current technologies and up-coming breakthroughs.  The computer business hopes to bring thousands of solution providers, IT manufacturers and others to its labs.  

Ingram Micro spokespeople state that both its East and West Coast Solution Centers have brought about $2 million in closed sales and $7 million in its sales funnel last year.  This proven success gives participating solution providers a great motivation to participate in the activities provided.

The computer business’ solution centers were the first to offer digital home and digital signage solutions.  Both present the opportunity for partners to see technologies and use them before they are released and before recommending them to clients.

For more information on this computer business story, visit the attached link.

Added By:  Computer Consulting 101 Professional Kit

While non-profits are a valid market for IT specialists, they are certainly not the most financially rewarding clients.  

The Pros of Non-Profits for IT Specialists

1.     You can easily reach non-profits because they are members of trade groups and publicly listed in directories.  

2.    You can gain great emotional rewards from knowing you are helping a cause in which you believe and that is valuable to society.  

The Cons of Non-Profits for IT Specialists

1.     Non-profit organizations will have very low profit margins.

2.    Getting into bidding wars is a possibility with non-profits.  

The second “con” is dangerous; bidding wars make your firm into a commodity.  Also, when you bid against someone else, your competitor could be cutting corners, leaving the bid price low and preventing you from providing a realistic solution.  

Government Bids Can Be Difficult for IT Specialists

Selling to small businesses and the sweet spot is much easier for IT specialists than dealing with non-profit and government bids.  Regrettably, most non-profits and government organizations have to take the quoted price by law.

More Problems with Bidding Wars for IT Specialists

When you’re involved in a bidding war, your trust, personality and credibility does not really make a difference.  Following the rules and getting the bid in on time are the two most important factors.  

Bidding wars also require IT specialists to do a lot of non-billable work – researching, developing configurations, creating a cohesive plan — that is normally billable with regular small businesses.  And getting the contract can still be a near impossibility.  

Bid Smart

If you want to get in a competitive bid, you can’t put your whole energy into it.  Your bid chasing time as IT specialists should not exceed 20% of your business development time.  Unless you have chosen non-profits as your specialty, you are better off focusing on small businesses within the sweet spot.

If a government agency wants to outsource support services and the RFP is well-defined, you might have an easier time putting in a good bid.  However, if the organization is simply looking to buy hardware or do some installation once, you will have a problem making a real profit.    

IT Specialists and Non-Profits

Non-profit and government agencies are better niche opportunities for IT specialists than regular retail opportunities.  But they are still not as profitable as the sweet spot.

Added By:  Computer Consulting Kit

Recently, solution providers noted that three years after Platinum Equity acquired CompuCom and GE IT Solutions for $504 million, it will be selling it to a private equity firm for $628 million.

CompuCom, based in Dallas is being purchased by solution providers Court Square Capital Partners, based in New York. Court Square is a 30-year-old private equity firm focused on the midmarket. It expects to close the sale by next year. The equity firm hopes to use CompuCom’s acquisition as a launching pad for acquisitions of more solution providers in the future.

Experts at important publications such as VARBusiness Magazine state that the latest solution provider acquisition is a great investment for Platinum. They purchased the company at the right time, and sold at the right time, when the company was still thriving and valued at greater than purchase price. Experts expect they will continue to see private equity interest in solution providers soar because their value has been evidenced in recent years. This is a testament to the value of the solution provider business model.

CompuCom will offer to purchase its outstanding 12 percent senior notes that are due in 2014 as part of the deal. For more information on this story for solution providers, see the attached link.

Added By: Computer Consulting Kit

There are many different IT consulting rates.  Some people decide to charge zero, others go for $25, $35 or $45 per hour.  What is the best IT consulting rate for you?

Startup and Rates

If you want to set a good standard for yourself, your future clients and your business, your starting IT consulting rates should be around $75 – $95 per hour.  Setting high rates for yourself will build a reputation for your IT consulting business and help you attract the best clients.

IT consulting businesses that work with small companies typically charge $100 – $125 per hour.  The rate is determined by how deep their specialty is, their vertical industry and their metro area.  

How Do You Adjust IT Consulting Rates?

New IT consulting businesses often don’t accurately think about their expenses and end up charging too little for their IT consulting services.  Usually, if you start out really low, you will have to stay really low.  Adjusting IT consulting rates late in the game is nearly impossible.  Your last resort is fixing rates going forward and getting new clients, keeping a lot of old ones that are paying you way too little.

Raising Rates is a Challenge

When you grandfather rates, half or at the very least one quarter of your IT consulting business will be useless because it will not be earning you any money.  Getting clients to agree to huge rate increases – possibly increases of 100 percent or even more – is an impossibility.  

The Main Idea About IT Consulting Startup Rates

When you are starting your business, don’t charge too little or you will have to totally ditch your IT consulting client list later and start over, possibly putting you out of business.  Set rates appropriately from the beginning to attract the best clients and get the most out of your company.

Blogged By:  Joshua Feinberg