The name Proven IT is an apt moniker for a 20-year-old managed IT business that’s demonstrated the ability to grow profitably while many others have failed. But one might argue that it doesn’t accurately convey the considerable breadth of products and services the Tinley Park, Illinois, firm has to offer. Given the multi-line vendor has catapulted from the ground floor to $86 million since 2003, perhaps Proven Winner would be apropos, if not braggadocios.
However, Brett Cosich is anything but arrogant. The COO of Proven IT is grateful for and reinvigorated by the substantial growth the company has enjoyed. The dealer doesn’t rely on any one offering to power its fortunes. Given that the Chicago market has a number of marquee managed IT firms, a robust mix of offerings has served the provider well.
Cosich has a vision for Proven IT, with organic and acquisitional growth that carries the company past its Midwestern roots. He relishes the idea of a hub-and-spoke model of five to seven facilitiess in major cities across the country—an ideal platform model that would enable it to serve a broader base of clients and verticals in the targeted markets. Given what the dealer has achieved in just 20 years, the odds are in Cosich’s favor.
“When you take care of your employees, your employees take care of your clients, and the clients reward you with continued and broadened business,” Cosich noted. “That’s elementary, and everyone knows it. But in practice, it can be tough to keep up; a lot of companies get distracted. We’re a hybrid company in that we started the business with our father [John], and having that first- and second-generation perspective has allowed us to build this company at a different pace than a single entrepreneur would.”
Track Record
The family certainly benefitted from John’s extensive industry background. The elder Cosich joined Xerox out of college before moving into ownership roles, first with American Office Equipment, then Distinctive Business Products. He and a partner operated Distinctive for 18 years before selling to Xerox’s Global Imaging Systems (GIS).
John’s timing was fortuitous. Around the time his non-compete with GIS expired, three of his four sons—Brett, Tory and John Ross—had graduated college. That’s when the idea of starting a family business, then called Proven Business Systems, was hatched. At the time, it wasn’t exactly Brett’s vision for the future.
“I laugh about it now because the last thing I wanted to do was be part of another copier company,” he admitted. “Growing up, you think there are many cooler things to do, right?”
What convinced him was John’s promise to incorporate IT services into Proven’s catalog. The company’s modest platform initially consisted of digital filing, network setups and some help desk. But armed with experience, fresh ideas, seasoned pros from past ventures and the Tom Johnson model, Proven IT was able to set a break-neck pace of 20% annual growth. In fact, the pandemic-addled 2020 campaign is the lone outlier year when it wasn’t attained.
In 2014, the company made significant investments in its IT offering that provided the framework for its current platform. Key personnel were added to help set the stage for a sustained recurring revenue model. A greenfield Phoenix office was launched in 2019, and two years later the company purchased an IT firm based in Merrillville, Indiana.
John is CEO, with Brett’s brothers handling the sales and business development duties for the 300-employee team. Proven IT carries Canon, Toshiba and Xerox products on the MFP and production print side. The dealer primarily serves the SMB space and enjoys solid penetration with the higher education and municipal business verticals. That client variety prevented Proven IT from suffering a sharp downturn in business during the pandemic, while other dealers absorbed greater losses because their fortunes were closely tied to the most-impacted sectors.
Comprehensive Catalog
Beyond the boxes, Proven IT’s product and service arsenal is fairly comprehensive. The flagship IT and cybersecurity program includes managed network services, data backup, help desk, vulnerability assessment and compliance services. On the managed services side, the dealer furnishes managed print, production, document management and print management software. Its workflow automation addresses ECM, capture/scanning, doc/records management and cloud fax. In addition to a full telephony slate, Proven IT adds physical security to complement digital, from video security and access control to environmental alarms and license plate recognition.
Managed print is by no means the red-headed stepchild at Proven IT. The dealer recently invested in a dedicated MPS team, and its sales reps will be tasked with attaining managed print quotas, according to Cosich.
“One of the challenges we’ve had is our reps have too many tools in their toolbox, too many offerings to go through,” he noted. “We’re just trying to have an emphasis on specific solutions.”
A subset of this is production print, which offers fertile ground in both the commercial space and higher education, from SMBs to enterprise clients. Proven IT benefits here from a crackerjack team of in-house specialists in addition to SMEs from the manufacturer end.
Still, one cannot overemphasize the role managed IT has played in the dealer’s ascendency. Managed network services saw a 35% year-over-year increase. Front of mind for clients is locking down security from both cyber and physical standpoints. The growth in cyber insurance acquisition has prompted (read: forced) SMBs to raise their standards in order to comply with policy requirements.
The biggest evolution, according to Cosich, is the willingness of clients to augment their in-house staffing. “For years, prospects put up their guard because they were afraid of displacing their internal people or were uncertain about the quality of solutions they could receive from an MSP,” he said. “That’s changed considerably; most clients want at least some level of augmentation from an MSP, if not fully outsourcing it. We’re no longer viewed as a threat to internal IT. We’re seen as an added layer of security, an extra set of hands.”
Proven IT’s physical security program is a perfect complement, made even more popular during the pandemic period as facilities—some largely abandoned during shutdown measures—required monitoring against in-person bad actors. Active shooter scenarios, another unfortunate reality of the modern workplace, have mandated calls for tighter access and monitoring measures. Plate recognition, in addition to enforcement of parking rules, may help alert a business to a former employee returning—a sign of potential trouble. The offering also goes hand-in-hand with telephony, given the cabling needs of both, in addition to MNS, thus widening the conversation with clients/prospects.
Digital Strategy
While Proven IT hasn’t completely eschewed old-fashioned one-to-one marketing and having reps garner leads through cold calling, it’s adopted a digital strategy that aligns with business growth. Campaigns driven through social media, email marketing, SEO and content marketing have helped reach vertical markets that were previously underemphasized. The measurable data the dealer receives helps dictate future ad spend.
“In the past, we’ve done NFL or MLB sponsorships, but there’s no way to grade or measure the ROI or where the leads originated,” Cosich noted. “Now we can monitor website traffic, the actual leads generated, the conversion rates, and be able to ratchet it up or down in the areas where we see the most return. That’s pretty exciting.”
Speaking of inbound generation, Proven IT has rolled out a new technology assessment tool for clients that de-emphasizes the standard in-person technology review process. Clients and prospects can now log on to the dealer’s site and conduct their own assessments without feeling pressured about providing information. Users can furnish as much information as they feel comfortable with, and Proven IT can tailor its suggestions based on that data.
This less-invasive approach may not yield the degree of opportunities that are crafted in an on-premises visit, but Cosich recognizes the advantages. “What we’ve seen so far is that it really allows a more authentic drive to what the client really needs versus what a sales rep might be biased to push them toward—the high-value items the reps want to sell,” he said. “We think [online assessment] is a holistic and natural way to serve the customer’s needs.”
Another inbound tool is Proven IT’s rich directory of blogs covering many popular office technology topics (e.g., document management, AI, endpoint security) and a knowledge repository consisting of webinars and ebooks. Showcasing thought leadership and driving more website traffic serve a valuable purpose and create a comfort level that casts Proven IT as a trusted advisor.
Growing Family
Documenting the strength of Proven IT’s value proposition would be incomplete without a nod to the firm’s human resources department. In the past year alone, approximately 50 new employees were onboarded across every aspect of the operation, from entry-level team members to executive-level hires. The 20% annual growth is a strong selling point and an indication of a company with a solid future. Prospective employees are quick to buy into the stress-free philosophy perpetuated.
In addition to the “hub and spoke” model Cosich referenced, he believes it will be important for Proven IT to build revenue across all fronts and markets, which will also enable the dealer to continue attracting talent. He sees a blend of organic and acquisitional growth aiding the cause, and he hopes to become more active in an M&A theater that, in recent years, has witnessed unprecedented EBITDA multiple values. With high lending rates bringing multiples back to earth, Cosich would love to identify partnerships that will expand Proven IT’s market reach.
Moving forward, Cosich hopes to approach, maintain or eclipse the 20% revenue growth standard in 2024 as long as it’s not at the expense of profitability. Maintaining high numbers also applies to employee and customer retention, for which the bar is set at 95%. With the Proven IT machine humming smoothly, one couldn’t blame Cosich for being tempted to use a “rinse and repeat” strategy. But as the first 20 years have demonstrated, Proven IT’s greatest asset is its ability to move forward.
“We have that mantra to be the best, to be better than what your clients expect,” he said. “So often, we see competitors nickel and dime their clients to the point of chasing [the clients] to us. Instead of trying to lure SMBs with a cheap price or something that might not be authentic, we charge a fair price and are completely transparent about it. We sometimes lose deals to lower prices, but then those prospects come to us when they realize that the à la carte items added up to more than they were promised. That’s why it’s so important for clients to know what they’re paying for.
“When we first got into managed services, we had clients ask us to take things out of our proposal because it wasn’t in their budget. That’s like asking a car dealership to take the airbags and seatbelts out. I don’t subscribe to that. I really don’t want to allow our people to take offerings out because no good deed goes unpunished. The next thing you know, you allowed a firewall project to be delayed or removed the two-factor authentication solution. That practice is a total disservice to the client.”
Tomorrow’s Technologies: Keeping it Real with
Artificial Intelligence by Finding Ethical Applications
There’s a danger with any technological advancement that can do some of the tasks currently performed by humans. It can augment and support, or it can be used as a tool to completely replace. With all the talk around AI and its ethical usage, phasing out people may not be one of the more popular issues being discussed.
Brett Cosich, COO of Proven IT, loves all the impactful AI business applications that can automate tasks and enable companies and their employees to focus on more high-value processes and functions. Eliminating mundane and redundant operations, providing predictive maintenance alerts and flagging elements based on metrics and key performance indicators only begin to scratch the surface of possibilities.
AI’s potential for being a weapon to replace people, he fears, could be a temptation too great for businesses to resist. “I hope it’s something that will allow businesses to scale and be more efficient instead of just cutting costs and squeezing profits,” he said.
Cosich isn’t naïve—he’s seen the same practice in M&A. Many of his competitors have been acquired by private equity firms and manufacturers, only to be wrung out mercilessly to the benefit of the acquirer’s bottom line. Meanwhile, the acquired dealer and its culture become a shell of its former self.
How AI is ultimately wielded remains to be seen, but Cosich is optimistic. “We’re hopeful that [AI] can help complement and improve things while allowing us to continue to scale and do more,” he added.
