In order for an IT consultancy to maximize maintenance plans, consultants must first learn how to properly administer these agreements. Erik Eckel offers advice about billing from lessons he has learned.


Maintenance plans are a consultant’s best bet for smoothing the turbulence that accompanies most IT support roles. By minimizing downtime, maintenance and support contracts help IT consultants develop more predictable schedules, generate more consistent revenue, and eliminate many unplanned outages, which quickly tire and exhaust even well-staffed consultancies. Maintenance plans offer another important benefit: These plans help ensure proper data backup operations are in place and are working as required.
Smart organizations work to protect their data from catastrophic loss due to fire and other threats. In Louisville, KY, where my IT consultancy resides, tornadoes are another worry. But how often do such scenarios prove realistic? Well, take a lesson from my IT consultancy. In the last 11 months, my office has had to assist clients in recovering from an unforeseen hurricane (yes, such things exist), a devastating ice storm, and events of the last week.
Last Tuesday, August 4, 2009, began like any other day. A breakfast meeting with a strategic partner was followed by a new desktop deployment and data migration. Then emergency calls started rolling in around 10:00 AM. Clients all over town were taking on water, literally. High water, even in locales usually immune from flash flooding, resulted in millions of dollars in damage. Such is the effect of more than six inches of rain within an hour.
This situation is a good example of why I advocate selling maintenance plans. These support contracts are an excellent method of not only smoothing your consultancy’s business operations but also protecting clients from the loss of critical data. But, before an IT consultancy can maximize maintenance plans, consultants must first learn how to properly administer them. After three-and-a-half years of consulting full time, I’ve learned a few lessons. Here are three tips for billing maintenance plans:

1. Describe services

When performing maintenance tasks — such as monitoring server disk space or e-mail logs, reviewing antivirus scans and back up routines, and downloading and installing security patches and performance updates — be sure to tell clients which tasks you complete; this is especially true if you perform these services remotely.
Don’t just send an invoice that lists “server maintenance” and don’t just describe services as “reviewed backup logs” or “server maintenance” on the invoice. Instead, state “confirmed server back up operations were backing up critical data off-site as scheduled” or “downloaded and installed Microsoft-recommended server security and performance patches to protect against newly identified threats and known performance issues.” By including additional information, you better enable the client to understand exactly how you continue to add value to their business.

2. Write tight maintenance agreements

Clients don’t always differentiate between maintenance work and new projects. If you draft an agreement that specifies you’ll provide support service, be sure to define the tasks that constitute maintenance and support. Some clients may believe migrating data from an old server to a new Windows domain constitutes maintenance, while most consultants will view such a complex and time-consuming task as a new project.
Better yet, when drafting maintenance and support plans, specify the number of IT service hours the client receives each month. If the client surprises you with a new project, then it’s not a problem. You should include language in the maintenance contract that clearly states the hourly rate the client will pay for any IT services delivered above and beyond the number of hours they receive each month as part of the maintenance or service plan. This strategy helps eliminate any unpleasant surprises when the client receives your bill.

3. Leverage reporting features and tools

Windows Small Business Server includes daily performance reporting features. Third-party tools, including GFI Software’s HoundDog and HyBlue’s Windows Monitor, offer alternative monitoring opportunities. Even APC power management software and image backup applications offer automated and alert reporting. Be sure to use these types of tools to keep an eye on your client’s servers and computers. Review appropriate performance reports daily to help identify troublesome trends and errors before the issues become crises. Then, be sure to include the time spent on such tasks on your monthly maintenance plan invoice.

Maintenance plans may be the best investment an organization can make when trying to protect against data loss and unscheduled outages and downtime. Erik Eckel shares how his consulting firm sells clients on the idea of maintenance plans.


Clients need service and support contracts, but many don’t want to pay the price. Likely the best investment any small business can make to help ensure productivity, efficiency, and uninterrupted business operations, some organizations resist critical maintenance and monitoring tasks.
This always amazes me. Clients sometimes find it difficult to justify paying $X to prevent possible downtime, yet when critical PCs, servers, or network equipment fails, they don’t hesitate to get you out of bed on a weekend to pay $5X to repair a failure.
As true partners, it’s your responsibility to help business owners understand the need for and the business value of service and support contracts. Here are three tips for selling maintenance plans.

1. Document service plan benefits

Even if a business hasn’t expressed interest in becoming a service or support contract client, draw up a maintenance plan agreement and personally deliver it to the business owner the next time you complete a project on-site. Take a minute to review bullet points that tout the plan’s benefits.
My consulting firm’s contracts typically provide all the following benefits:

* Priority service response, meaning the client receives emergency assistance quickly when crises arise.
* No industry-standard call-out fees (often listed at $35 or more to cover technician travel time and/or fuel costs).
* Four or more pre-paid service hours each month.
* Daily monitoring of servers and critical systems and equipment to provide proactive protection from failures, errors, and other business disruptions.
* Discounted rates for other work.
* Discounted rates for employees’ personal systems.

Having a document handy that lists the benefits of proactive monitoring and prevention, as well as other benefits to the business, helps reinforce the value owners receive when entering such a contract. Keep these documents short but descriptive; my firms’ contracts run just two pages, including space for contact information and signatures.

2. Audit service history

If you still encounter resistance closing a maintenance contract after providing a client with a sample service and support contract, take some time to review their service history. If the client has been calling your IT consultancy for emergency repair or break/fix work over the course of a year or more, annualize the total costs and then divide by 12; the total is usually more than the average monthly maintenance plan subscription. Point that out (tactfully) to the client.
When regular clients resisted signing a maintenance agreement, I reviewed their invoice history over the past year. Most of the time, those clients would have saved money by subscribing to a maintenance plan that would have helped prevent failures (such as when server data partitions consume all available free space, email databases exceed maximum limits, etc.). On those occasions when proactive maintenance wouldn’t have lowered the bill (e.g., hardware loss due to lightning strikes, end-of-life-cycle performance issues, or other trouble), I note how much the client would have saved by avoiding call-out fees and enjoying better service rates. Such calculations often remove any remaining objections.

3. Review unscheduled downtime costs

If preparing a sample contract and reviewing service history (and associated expenses) doesn’t convince a client of the benefits of a service and maintenance plan, be sure to review the costs of lost data and unscheduled downtime.
In 2008, CompTIA reported that spyware infections typically require 2.5 days to resolve. Worse, the costs from resulting downtime are excessive. CompTIA’s statistics indicated small and medium size business workers lose 18 work hours before reporting spyware, and total costs are listed at $8,000 — and this total doesn’t even factor lost revenue! (Spyware infections can be prevented via preventive maintenance.)
A 2001 Ontrack report, Cost of Downtime Survey Results, found that U.S. businesses lose on average $12 billion a year due to data loss. Maintenance plans should place a premium on not only ensuring solid backup routines are in place, but also on monitoring daily backups to ensure the backups complete properly and that all critical business data is safely stored off-site. Worse, according to the National Archives & Records Administration, 93 percent of companies that lose data center access for more than 10 days file for bankruptcy within one year.
While I don’t advocate using scare tactics to convince a client of the importance of technology maintenance and service plans, these are real statistics. All hard drives fail — it’s just a question of when. RAM chips can prove faulty. Motherboards and disk controllers develop inconsistencies. Power supplies flake out.

Conclusion

Don’t minimize the importance of signed maintenance contracts. In addition to helping ensure your clients’ business operations run more smoothly and their data are properly secured and protected, by signing clients to a formal maintenance plan, you help solidify your standing as that client’s IT provider. At the same time, you can minimize unscheduled break/fix work and spend more time performing preventive maintenance, thereby helping smooth your own business’ operations.
While you can’t prevent failures and errors, you can serve as a valuable business partner to your client and help identify and mitigate known risks. Helping clients understand the importance of maintenance plans is an important first step in becoming such a partner.