Outsourcing Procurement for MSPs (EP 871)

Hello friends, Uncle Marv here with another episode of the IT Business Podcast, the show for IT professionals and managed service providers, where we help you run your business better, smarter and faster. And we are continuing on with our vendor profiles for the Pitch It program, that is the IT Nation incubator program for new and emerging vendors in our space. And I'm just going to flat out change my introduction because when you hear who I have on the show today, I'm sure most of you just like me are going to say, what? And I am speaking of Rayannee Buchianico from ABC Solutions, Rayannee, how are you? Hey, Marv, how are you doing today? Thank you so much for having me on your show.

I am doing well, thank you for joining me. And let's just get that question out of the way first. Okay.

What are we doing? So, well, we are here for ConnectWise, the 2025 Pitch It competition. And probably nobody was more surprised than I was when we were selected. So here's kind of how it happened.

We started rolling out this brand new service, which is so far outside of what we've always done. And I thought, how am I supposed to get this message out? Anyway, then as it so happened, something came across my radar about Pitch It. And do you have a new product or a new service that you want to present to MSPs? If so, apply.

And so I did. And I literally was drinking coffee at like six o'clock in the morning. And I'm typing up my Pitch It application.

And then two or three weeks later, I got the notice that we were accepted. And I about fell off my chair. So that's kind of how it happened.

I really did it because I was more interested in the education and the knowledge of how do I get this new concept, this new service, this new offering that we have out into the wild. Like, how do we? I'm an accountant. You know this, right? I'm an accountant. So I don't know really how to do marketing.

When I was in college, we didn't have marketing as a college course. So this promises 16 weeks of pure education. And we're about halfway through.

And let me tell you, it's been top notch. All right. So most everybody knows you as the consulting and accounting firm for managed service providers.

You help with financial and operational services. So I got to ask, what's this new service and what makes it so special? Okay. So you know how we are, you know, always looking to do something new.

And how can we help the MSP, you know, better their business or do something, you know, better, faster, smarter. And I always felt like there was this one area that we could not help with. And I just could not wrap my brain around it.

And it was procurement. You know, I would have clients, you know, contact us and say, hey, you know, can you handle our purchasing and our procurement? And, you know, because we're doing all of the other things. We're doing the invoicing.

We're doing the agreement management and, you know, and the accounting. And like all of it, the CFO work. And that was the one thing that we couldn't do.

And then as luck would have it, we ended up bringing on a few different people who literally have like 10 years’ experience doing just procurement for MSPs. And how that happened, both, you know, in the same year, I have no idea. But then they brought me their ideas and they brought me the process and they said this can happen.

And I said, OK, let's do it. All right. So sounds like things just kind of fell into your lap.

And as per usual, that's how you've been growing the business. This is your 20 for you, isn't it? It is. We just hit our 20 year earlier this month.

All right. So congrats on reaching 20. Thank you.

But now let me ask, when it comes to procurement, are we talking the traditional procurement that we think of when, you know, we are trying to get product from our vendors like the distributors? You're not going to like set up a little deal with Amazon with us, are you? No. OK, so let me just kind of quickly walk you through the process, because quite frankly, I thought it was brilliant. We connect to the MSPs PSA and right now we're comfortable in, let's call them the big three.

One of them is clearly Connectwise. And so we connect to we pull the opportunity out and we already have through the onboarding process, the MSPs logo, the MSPs contact information that and, you know, all of their templates like there are different types of quoting templates and that sort of thing. And I say wording if it's inside the quote, all of that, like it is all white labeled for the MSP.

The customer never knows that this is outsourced. OK, so we pull the opportunity and we do the configuring. We do the pricing.

We prepare the quote. We send it back to the MSP for approval. So they see it before it ever leaves the building and gets to their customer.

And then once they approve it, we send it off to the customer and they receive it. They can approve it electronically. We receive it back.

We push it back into the opportunity in the MSPs PSA. And they at that point can either invoice it themselves or we can prepare the invoice in order to invoice the customer. We want that invoice to leave out of the PSA because we want the MSP to receive that money, not us.

Now, here's the brilliant part. When we are preparing the quote, we're preparing a procurement. We call it a handling fee.

So the MSP actually doesn't pay us. The customer does. And so the MSP can still have their margin on the hardware and product.

And the customer simply pays the handling fee for us. And then we do the deal reg. We follow.

We prepare the purchase order. We send it off to the vendor. And it can be like their tech data, their sorry, their TDSynnex, their DandH, their, you know, whatever vendors they choose.

Because we're using the quoting tool that connects to all of those. And so we can use their accounts. And if they don't have one, they can use our accounts.

Either way, they're still getting the best prices. OK, so now comes the question that I hope you're ready for. All right.

There are other products in our space already doing this. What makes you so special? Well, we are humans that are doing it for the MSP. Yes, there's lots of quoting products out there.

And sure, you can absolutely do it yourself. As a matter of fact, if you don't have a quoting product and you've been thinking about getting one, this could really be a good alternative. Because you will also have the ability to not only log into the system to approve the quote, but you could, you know, realistically prepare your own quotes.

If it was something really small that you didn't want, you know, to run through us. Interesting. All right.

So you've already mentioned that this is going to go through the big three. So that I'm assuming is your integration and stuff. Have you already tested this? Multiple times.

And I'm assuming it's going smoothingly or you wouldn't be here, right? That's true. Right. So, you know, when we first started this, I thought, OK, first we need a process.

Like we need an onboarding process for the MSP. Like what information do we need? We need their names, their address, you know, their contact information, their logos. You know, their MSA or or their quoting words.

And, you know, any particular pictures or anything like these are custom quote templates that, you know, we do during the onboarding process. And that's probably the one and only fee that we charge the MSP directly is just to get everything set up. And so we've tried it with a handful of MSPs, you know, where we grab the we grab the opportunity.

We do the pricing, we prepare the quote, we send it off, you know, like and we just keep doing it over and over and over again, waiting until something breaks so that we can fix it. And I think we've gotten all of the bugs worked out. But who knows? OK, there's always something.

So let me ask you, you know, been testing it and all of that. What's the one, you know, surprising feedback that you've gotten or have you had any bumps in the road that you had to, you know, smooth out? Yeah. So the deal reg, you know, when we have to go straight to the vendor and register the deal, you know, which is a little bit more time consuming than just ordering something from the portal.

So we've we had to build out that process. And of course, we had to develop some relationships with many of the vendors like, OK, we need somebody that's going to be on the other end, somebody that we can call or contact, you know, if something goes sideways. So that was probably the most challenging piece to work through.

One of the most surprising just yesterday, I literally had somebody say to me, what was it that what were the words he said? This was the best thing that's happened to me all year. Yeah. Right. 

You know, I was like, wow, you've had a rough year. But, you know, but I want to say that there's so like so many times I feel like the MSP gets bogged down in the minutia that is that the configuring and pricing and quoting and then, you know, the purchasing and the follow ups and the invoicing and the collections, you know, like all of those pieces is so time consuming. And there was this one this one MSP we worked with, and it was the owner who was doing all of the procurement.

So he's, you know, he's trying to grow the business, but he you know, he's stuck in this, you know, day to day. You know, I have to you know, I've got to research this and I've got to look this one up and I've got to order, you know, these 25 different things and follow up on the POs that are still open. I got some backordered stuff and I don't you know, whatever.

So it's actually I thought it was going to be so much harder to outsource that procurement piece to us. And I was surprised at how simple the entire thing could be when you have people that know what they're doing. All right. 

So I know it sounds simple. And I know that this looks like a thing that you had an aha moment with when your people brought it to you. But again, I got to go back and ask, why would you want to add a new service offering that, I don't know, takes away from your core business or does it? It does not take away from our core business. 

And this is probably going to sound pretty silly. But the people that that we brought on in the past year or so, year and a half that specialize in procurement, that's where their passion is. And yes, they are doing a great job in the other departments that we've hired them for.

They're doing a phenomenal job. And so part of me is a little sad. But the other part of me wants to provide them, you know, with the work that they are passionate about.

And isn't that like what a great what a good leader is supposed to do? Like this is your specialty in life. Like this is what makes you get up in the morning and run to your desk or whatever. And I want to be able to provide that. 

Like I don't want to pigeonhole somebody just because they happen to be good at it. You know, I want them to thrive. And that's why I went after it.

OK, so let me ask you this, as if we're sitting at the bar and I'm playing devil's advocate. If they were doing procurement before and they were off doing all that stuff and they came to your company where there was no procurement. Why would they do that? I mean, what were you offering to lure them away? So, well, I can think of one person who said that they were they were really interested in coming to work with us because of the culture.

And, you know, the mutual respect that we have for each other as team members. And we really do want to see everybody grow. And that particular person didn't have that at their last job.

The other person that I'm thinking of had been looking for procurement work for probably, you know, they were with an MSP who was who was purchased or acquired by another MSP and ended up not being there any longer. And that role was 100 percent procurement. And so that person went on to work for another MSP, but it was, you know, it was part time.

It was really disorganized and he wasn't enjoying it. So when I found him, because he used to work at one of our clients before they were acquired. So I already knew this person's work.

And anyway, I enticed him to come on board. And, you know, and all he talks about is procurement, procurement. I would just love to get back to procurement. 

And I was like, hang on, hang on. I'm trying to figure this thing out. And so we did.

All right. Do they do they listen to the show, by the way? I don't think so. OK, because I just don't want you to have to go back and explain why did you talk about me in public and throw my stuff out there? I was very careful not to use names.

I know it was hard. I could see it in your face. All right. 

So this will be interesting. And again, I'm trying to picture you on stage in Orlando giving that pitch, going for that seventy thousand dollars. And my question is going to be, what if you end up with the steak knives instead? Quite frankly, I would love a set of steak knives, you know, because even still that to me would be a huge win.

And I hear amazing things about those steak knives. I don't know if they're like Ginsu or whatever, but now I'm teasing. But like I said, I really did this.

I really joined this competition for the knowledge and the education, you know, to do better marketing. Like I said, I've never done any marketing and I didn't even really know how. So that's why I'm there. 

And we're kind of we're running through a bunch of, you know, scenarios in as to what it's going to look like on stage. And, you know, when. So on one hand, we're thinking it's like the dawn, right? The dawning of outsourced procurement.

And I know that there was a company out there that did try to do that. And I don't I think they're still out there, but I don't know that they market it very much. I don't know that there's many other service firms out there that are offering this.

And so and you're probably going to ask me to run my pitch, which I haven't perfected yet. I was going to say, that's going to be the way you bring it home. You're going to you're going to do your first public pitch right here on the IT business podcast.

Obviously, it's not going to be the full five minutes, but enough to get started. So give us a taste of what that's going to feel like. OK, picture the scene.

You are sitting at your desk and it's Saturday afternoon or Saturday night and you're supposed to be taking your wife out to dinner. But instead, you have a pile of papers, you know, this high and you have to get these quotes out. And every one of them is going to take you at least 30 to 45 minutes.

You know, what is it that we're going to get? And, you know, like I can see it, right? You're just saying, isn't there anybody that isn't there anybody else in the world that I could give this stuff to? And then here we come, you know, swooping in to save the day. You know, you're going to outsource that to us. We're going to take care of everything and we'll tell you when it's time to invoice.

So you get all of the money, you get all of the glory and you get to go home on the weekends. Oh, my. Look at you. 

Yeah, never marketed. But I tell a great story. I spin a great tale. 

That's fantastic. Well, thanks, baby. You know, I'll work on that a little bit more and see if I can't get it perfect.

All right, folks, you have heard it here. Rayanne Buchianico with ABC Solutions on the Pitch It trail. Halfway through boot camp, right? Yes, we are.

All right. Look forward to seeing you possibly on stage in Orlando this November at IT Nation Connect. Rayanne, good luck. 

Thanks, Uncle Marv. And thank you for having me today. All right. 

That's going to do it, folks. We'll be back with another vendor profile from the Pitch It competition 2025. We'll see you soon. 

Holla!