Many value-added resellers and managed service providers leave money on the table or lose projects due to the Presales Problem. If your IT services margins aren’t what you’d like them to be, getting a handle on this problem should be a priority.

So let’s break down what the Presales Problem is and talk about how solution providers like Connection and SHI are solving it.

See how Connection solved the Presales Problem and increased efficiency by 88 percent. Read the case study.

What is the Presales Problem?

The Presales Problem is partly a process problem and partly a technology problem. It results in inefficiencies and errors that leave money on the table or lead to lost projects. If not addressed, these issues will eat into your margins and reduce revenue.

The root of the problem is that everyone in your organization isn’t on the same page regarding pricing and scoping projects.

On the process side, the problem is that most MSPs and VARs don’t have a standardized process for scoping and pricing services. Since there isn’t a standardized process, critical components of each statement of work (e.g., level of effort estimates, project governance, and approvals) are inconsistent.

Instead of following a clearly defined process, presales engineers are forced to develop their own methods, which often vary from engineer to engineer.

The technological aspect of the Presales Problem is that, until recently, there wasn’t a good way to standardize the presales process without spending a lot of time and money developing a custom solution. Your sales team is supported by technology like their CRM, and your post-sales team has a PSA.

But most presales engineers rely on basic, unintegrated tools and their own estimates.

presales process

How Does the Presales Problem Eat into IT Services Margins?

When each presales engineer has their own process for scoping and pricing services, you introduce unnecessary risk into your projects. For example, if Arthur prices a project one way and Bob prices a similar project another way, you end up with different times and levels of effort across the organization.

But, without a tool suited to the unique needs of scoping IT services, it is difficult to impose order on the presales process.

Most companies have some method to maintain consistency. These methods, however, typically require constant tracking of file versions and make it difficult for management to get the visibility into presales that they need to monitor team performance and manage the approval process.

The result is a haphazard system that is inefficient and error-prone. And, since managers don’t have an easy way to identify these inefficiencies and errors before they impact the company’s bottom line. Even then, it’s difficult to determine what changes need to be made and even more challenging to make those changes.

The Consequences of the Presales Problem

The Presales Problem eats into your services margins in two ways:

  1. lost projects due to overpricing and increased document turnaround time, and
  2. unsustainable services margins due to pricing errors and lack of visibility into the presales process.

The consequences of ignoring the problem compound over time as a result of:

  • Inaccurate Level of Effort Estimates. Arthur may be leaving money on the table because his level of effort estimate is different than Bob’s. And Bob may be overpricing jobs for the same reason, which could lead to losing proposals.
  • Inefficient Scoping. Inefficiencies in the scoping process mean your engineers aren’t scoping as many projects as they could otherwise.
  • Errors in Project Governance. If you don’t have the right process in place, it’s easy to forget to include critical project governance requirements. This is especially true for non-technical items like project management and documentation time.
  • Lack of Visibility. When your presales team relies on different tools and processes to scope and price services, it’s more difficult to see what is being scoped, what has been approved, and whether your team is working efficiently.
  • Statement of Work Errors. The copying and pasting required by a process that relies on unintegrated, manual tools can lead to errors in pricing and language that aren’t caught until it’s too late.

How to Solve the Presales Problem

Companies selling materials have long relied on Configure, Price, Quote (CPQ) software to increase efficiency and profitability while reducing the risk of complex product sales. But the same factors that make the process of scoping and pricing services so much more complicated than scoping materials made it difficult to adapt this approach for companies selling services.

Improving Managed Services Margins with Services CPQ

Bringing CPQ to service providers was more complex, and the end product had to be more flexible to meet the needs of large MSPs and VARs. Larger companies could invest in custom development to create a bespoke solution for their existing technology (e.g., Salesforce or Sharepoint). But this approach was too time-intensive and expensive for many of the organizations that would benefit most.

Now, these companies can implement services CPQ technology without relying on third-party developers with ScopeStack.

presales process with ScopeStack

How ScopeStack Improves IT Services Margins

ScopeStack is a services CPQ software solution designed by IT industry professionals to solve the Presales Problem. CEO Jon Scott worked in presales on the management and execution side as a solution architect before founding ScopeStack to resolve the problems he faced daily in IT presales.

Now, solution providers like Connection, SHI, and Greystone rely on ScopeStack to increase efficiency and profitability.

Before ScopeStack, scoping projects was a painful mail merge situation in Microsoft Word. To use a service offering more than once, you had to pull it from a Word Doc, but sometimes an engineer would pull the wrong one and create inconsistent language leading to pricing differences.

—Heather Eakin, Manager, Data Center Practice, Connection

ScopeStack solves the Presales Problem for companies like Connection by bringing form to the presales process for IT service projects. Instead of requiring presales engineers to define and price services on the fly, ScopeStack enables them to base projects on individual units of services that are then grouped to scope and price a project.

How ScopeStack Works

As Heather said, copying language from one place and pasting it somewhere else exposes your company to unnecessary risk. So, ScopeStack allows your team to create a database of services that your engineers can add to pre-structured projects. All they have to do is fill in the variables.

Effectively, ScopeStack separates the project from the documentation, which drives efficiency, reduces risk, and increases profitability. And, while implementing new technology always takes time, ScopeStack users indicate that efficiency gains can be realized quickly.

I saw efficiencies in scoping almost immediately.
Alex Battard, CIO, Universal Data

ScopeStack also makes it easy to:

  • track all versions of a project
  • track changes between various versions of the same project
  • manage the approval process
  • see the change history for any project

These capabilities make it easier for your team to catch errors before they become an issue and identify opportunities to improve your process.

The Benefits of ScopeStack

ScopeStack protects your managed services margins by ensuring accurate level of effort estimates and consistent pricing. By solving the Presales Problem with ScopeStack, MSPs and VARs have:

  • Improved margins by up to 50 percent
  • Reduced level of effort by up to 80 percent
  • Reduced turnaround time by up to 90 percent
  • Reduced document management time by up to 90 percent

That’s because ScopeStack enables these companies to:

Win More Projects

By standardizing the presales process and defining your services upfront, your presales engineers will be able to scope and price projects more efficiently so that you’re able to be the first to submit a proposal.

ScopeStack increased profitability because our time to present proposals has greatly decreased. The early bird gets the worm and having the ability to get something in front of the customer first allows us to be more flexible in the RFP process.
Anthony Schaefer, Service Owner, IMS

And your engineers will scope your projects accurately and consistently, so you won’t lose jobs due to overpricing. That’s because ScopeStack allows your engineers to rely on internally sourced task language and level of effort based on the standards you create and approve, which ultimately drives consistency per task and level of effort.

Increase Services Margins and Revenue

By reducing turnaround time and the level of effort required to scope projects, you’ll increase your managed services margins.

ScopeStack has enabled our team to scope projects during the initial client meeting, increasing accuracy and efficiency.
Jesse Armstrong, President, Greystone

Not only that, but your engineers will be able to scope more projects so you can win more RFPs and increase revenue.

Overall the benefits of repeating scopes and being able to generate them more quickly allows for SEs to do more work.
Jeff Senger, Senior Solution Architect, Telcion

Improve the Presales Process

ScopeStack gives your management team the visibility they need to see where inefficiencies exist so that you can continuously optimize the presales process. The platform includes an analytics dashboard that enables you to see how engineers spend their time, identify which clients are requesting more services, and measure engineer activity.

By scoping on a per task basis with ScopeStack, I can see where we were under or over budget in ConnectWise to identify where we need to make adjustments.

Ariel Davenport, Solutions Architect, Centre Technologies

You can also see how long projects are taking to get approved, track services pipeline activity, and determine if the projects your team is scoping are closing.

In addition to providing this data, the platform integrates with software like ConnectWise and Salesforce. This increases efficiency by enabling you to sync client information from your CRM to a project, push scoped services revenue back to your CRM, sync work breakdown to your PSA, and save PMO time by automatically creating tasks in your PSA.

Increase Your Margins with ScopeStack

If you’re ready to increase your IT services margins, solve the Presales Problem with ScopeStack. Sign up for a free account today to see firsthand how you can increase profitability and reduce risk with the new standard in services CPQ.