Regulations and compliance are a topic that stirs debate among business owners. Whether it's statutory, regulatory, contractual, or industry best practices, the idea of the government or Nonprofit Organizations (NPO) meddling with profits is often a red flag for business owners. Yet, in some cases, regulations provide a safety blanket for consumers and those affected by products and services today.
While regulations are a nuisance to businesses alike, they provide an opportunity for Technology Service Providers. A service provider can specialize in a particular industry to ensure customers meet compliance. They can maintain a client environment to keep compliance up to date. They also provide ongoing training to keep personnel up to date on the latest cybersecurity threats. Let’s take a deeper look into the benefits of compliance requirements for our customers.
Develop a service structure around industry verticals
Depending on the size and skill set of a service provider, dividing clients into industry verticals works in the proper environment. By segregating legal, healthcare, construction, financial, and other types, industries have specialized services from dedicated roles. A TAM, vCIO, and Service Desk role can dedicate their energy towards one set of regulations.
A large benefit to verticals is how recommendations are similar between clients. With the same set of compliance rules to follow, implementations may vary slightly, creating a more streamlined approach to proposals (and some relief to Design Desk). A drawback to industry verticals is resource allocation. In smaller service providers with numerous clients, it is a chore to suddenly divide customers among those in service roles. Larger providers would need ample time to phase out the old method and rearrange clients under individual verticals.
Specialize in a particular industry
While industry verticals may work for some providers, it may not be the right fit for others. Regulations in healthcare, finance, and legal create niche markets to fill a service need. Rather than split customers up, a service provider could concentrate on servicing a particular industry. Taking this concept at face value seems like a great idea, which it is, but can have some drawbacks.
Specializing in one industry would benefit two types of service providers: startups and those looking to reboot their service structure. These two options present the opportunity to start from scratch and work in the selected industry. A service provider with numerous clients suddenly pulling a 180 could turn into a disaster if not planned and implemented properly.
Add more value to vCIO meetings
A vCIO is, unfortunately, very familiar with rejected or back burner recommendations. Some are a tough sell because most decision-makers feel the investment is not necessary unless something is already broken. A proactive strategy is often an uphill battle.
Regulations and compliance reinforce most recommendations not because the vCIO wants the decision-makers to implement the change, but because they have to make the change. The sentence “We recommend encrypting server data at rest to prevent unauthorized access.” may not sound convincing enough to warrant the project. But “We recommend encrypting server data at rest because it protects unauthorized access and is required by law.”. This sentence as-is may not be best to use at the next meeting, but shows how adding an additional layer of liability makes the case hold water.
Generate additional MRR and NRR
Speaking of vCIO recommendations, regulations and compliance can generate Monthly Recurring Revenue (MRR) and Non-Recurring Revenue (NRR) in addition to normal project work. Implementing changes to a client environment becomes a requirement rather than a need, giving a vCIO more leverage than normal.
Adding MRR would come in the form of raising the All In Seat Price (AISP). When a customer environment is subject to more rules, additional monitoring is necessary to ensure regular compliance. Increasing AISP to cover the extra costs of compliance audits, monitoring, and user training is justifiable to businesses where it is a requirement.
Avoiding regulations is not workable, so the best option is to embrace them. Businesses of all shapes and sizes are subject to various rules from many authorities. As a service provider, the best option is to embrace these rules and help customers achieve compliance. Taking the burden of compliance off their plate strengthens the business relationship and enables a higher level of trust.