Hiho – harrybbb here – the author of the SMB Consulting Best Practices book – I am delighted to post up a passage as a virtual book reading for your pleasure. Here is an older passage on fixed pricing – isn’t that what we call “Managed Services” today? 🙂
Fixed price bidding resurgence
Be careful what you ask for, the old saying goes, because you might just get it. Such is the case with the noticeable maturity of Microsoft’s SMB infrastructure products. Generation after generation, Microsoft has increased network operating system stability (bye-bye Blue Screens of Death or “BSODs”) and eased deployment and administration. This is in part because you, the SMB consultant, asked for it. On the one hand, some of you are grumping that Microsoft’s SMB infrastructure solutions became “too easy” and now you can’t make a living at it. Granted, the maturity in this technology area has forced us to reevaluate our business models to maintain and increase profitability (I do this across the pages of this book, especially the Grinder section where I emphasize solution selling).
BEST PRACTICE: You’ll recall I introduced the fixed pricing concept in Chapter Four when I showed you how to create an eBay auction entry for your SMB consulting services.
But there is another, more positive side of the Rosetta stone. It’s the return of fixed price bidding, something many SMB consultants haven’t done in a long while. First a quick history lesson in Microsoft’s SMB product epochs.
In the first release of SBS in late 1997, we were actively encouraged to engage in fixed pricing scenarios in delivering our SBS technology solution. (This was the same epoch where Microsoft sold SBS as “just add water” to the end user.) If you were there, you’ll recall that the first release of Microsoft’s SBS product line was unstable and unreliable and resulted in unmet customer expectations. So SMB consultants-including yours truly- locked into to a fixed price contract with a client, ended up working tons of hours for free (and losing money) to make the first release of SBS work. Major ouch!
Shortly there after, we SMB consultants promised never ever to do that again with SBS. And some of us were true to our word. We only worked the SBS solution area on a time and materials basis. However, a funny thing started happening on February 21, 2001. On that day, Small Business Server 2000, the third generation of SBS, was released in Atlantic City, New Jersey, at a Microsoft Big Day event. SMB consultants soon found this version delivered what they’d asked for: stability, security, ease of use, etc. From that point forward, those SMB consultants with a strong business sense (and who weren’t part of the permanently walking wounded from the first SBS release) quickly saw the benefit of fixed price bids with SBS 2000. What follows is the details of that insight and how it can benefit you, the SMB consultant.
First, a fixed price contract assume a stable product with an assured outcome. Anything less and you’ll go over your budget, cut your project ROI, and, while doing whatever it takes to make your client happy, compromise your profitability. So, for now, assume SBS 2000 and SBS 2003 meet our solution stability criteria. You can go forth with confidence that, following the structured SBS deployment process and using its built-in administrative tools,
each of your SBS customer sites will be exactly the same: stable. Each of your SBS clients will be exactly the same: satisfied.
Harry Brelsford, CEO at SMB Nation
MBA, MCSE, CNE, CLSE, CNP, MCP, MCT, SBSC (Microsoft Small Business Specialist)