vCIO: The Ultimate Guide

Posted by Denes Purnhauser on Jul 10, 2020

In vCIO, Managed Services Providers, Virtual Chief Information Officer, MSP, Virtual CIO, CIO

The vCIO or Virtual CIO (virtual chief information officer) term was popularized in the managed services industry to initially differentiate one MSP from another by adding higher-level management practices to their services.

The term has been overused and without a lack of an accepted definition, certification or agreement across the industry the term has lost its original meaning. As any MSP could claim to provide vCIO services it is no longer the main differentiator. Meanwhile, the service provided by vCIOs has become more relevant than ever.

That is why most MSPs have their own terminology for the vCIO role such as digital advisor, digital consultant, business technology advisor, and so on. 

What is vCIO Role?

vCIO is an IT leadership/management service for small businesses without the resources for a full-time CIO. The role is divided into business and technical roles. Both are strategic but technical vCIOs focus on the scope of MSP services like cybersecurity and IT infrastructure. Business vCIO’s scope is the company achieving competitive advantage with digital technologies.

 

Structure, Manage and Automate Your Account Management and vCIO Procesess

 

Why vCIO is important for MSPs?

vCIO is an important role for a managed services provider as it enables them to drive technology adoption, client control, and additional services. The MSPs become more efficient and able to drive adoption of certain standards across their clientele.

vCIO also expands professional service revenues. It generates high-level business-focused initiatives outside of the MSP’s core IT infrastructure offering. It can generate additional project revenues and also monthly recurring service revenues for vCIO offerings.

 

What should a vCIO focus on?

Here are the top 5 jobs a vCIO needs to succeed:

  1. IT strategy development
  2. Business application selection
  3. Data and business intelligence
  4. Office productivity
  5. Gain clarity with proposals
  6. System integrations

vCIOs have traditionally focused on developing an IT infrastructure roadmap. We can call them Technical vCIOs or vCTOs. This aligns client expectations to the MSP’s offering in order to streamline the MSP’s standards.

The new wave of vCIOs are acting as digital transformation consultants. That means they are focusing more on the business. Not just infrastructure-related management but to ensure the client gets a competitive advantage with the use of technology. Nurturing an IT strategy, business application selection, office productivity or complete business intelligence projects.

 

Do vCIO make good money?

Salaries for Technical vCIOs are a bit higher than traditional account manager’s. However Business vCIOs or digital transformation consultants’ salaries are closer to a general business consultant’s compensation. There are two reasons for this

  1. The added value is significantly higher for a business vCIO than a technical vCIO
  2. Technical vCIOs services are usually “built in” to an MSP package so it is a “cost driver” for an MSP. The business vCIOs are separate services for an MSP so it is a “revenue driver”, and allows the MSPs to pay higher salaries for the experts driving more revenues that can be billed.

A traditional MSP with a properly set up business vCIO or digital transformation as a service offering can range from a $1,500 - $5,000 MRR range. At the low end we see smaller professional services clients, and at the higher end we see complex small business clients.

The typical offerings are annualized professional services meaning a $1,500 per month package is a $ 18,000-year commitment. There are annual, quarterly and even monthly activities defined and delivered based on a schedule. It gives predictability, scope and specifics for the MSP and also offers tangible results and benefits for a client.

 

What is the difference between vCIO and Account Management?

Many MSPs haven’t been able to clearly define and articulate the different client engagement roles both internally and with clients, spawning confusion. The main difference between a vCIO role and the Account Management role is the scope of focus. 

Account Managers focus on the tactical execution of IT initiatives and client engagement. They can be separated into “Account Manager” and “Technical Account Manager” roles. 

Where Account Managers focus on the business side (renewal, expansion, satisfaction) and play a sales role, Technical Account Managers focus on the technical aspects of the engagement (service delivery, ticket reviews, security etc.). These sub roles can be merged into one in smaller organizations or just separated by client-facing and technical liaison roles.

 

How do I learn more about vCIO?

There is no official education available for vCIOs. The vCIO role is essentially a mix of project management, business consulting and technical expert roles. A good vCIO can be a great technical expert who can learn business consultancy or a good business consultant who is technology savvy and can bridge between tech and business people.

If we stick to the “business strategy” role of a vCIO where the vCIO focuses not only on the MSP’s IT infrastructure but the whole holistic technology (culture, information, applications, processes, strategy etc.) we have found one very good source of information from Virtual-C Academy.

The 3 best books for vCIOs:

The 3 best vCIO videos:

The 3 best vCIO blogs:

3 previously posted Managed Services Platform blogs about vCIO sales:  

3 previously posted Managed Services Platform research about vCIOs

 

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