How should VARs who adopt managed services adjust their compensation model?
What you want to do is move from a “billing-utilization” model to compensation based on “performance against SLA”. In the billable-hours model, you are paying your technical assets to maximize the number of hours they are being billed out to customers in project work, or in reactive service work. You are paying them to be on-site at customer locations. Typically, this has meant that those customers are having problems and paying you to fix them, or that you are performing project-based work for those customers. The way to think about paying your technical labor under a managed-services model is to compensate them based on performance against an SLA that you have written for a customer. In other words, if you are able to maintain the SLAs that you are promising your customers, compensate the technical resource against SLA performance. So, as you price your managed-service fees to customers, make sure you are taking into account the cost of your technical labor that will be utilized to s
