Tolar Systems Is MSP 501 Newcomer Award Winner


In 2012, Tolar Systems was a small break/fix, IT-project organization that barely cleared $100,000 in revenue.

In 2014, the Abilene, Texas-based company decided a big change was needed and began transforming into a managed service provider. The process has led to big success: Last year, Tolar’s revenue and user base grew by more than 16 percent and 80 percent, respectively, and it’s expecting in 2018 to double its growth and exceed the $1 million revenue mark for the first time.

But that’s not the only reason Tolar is the winner of the 2018 MSP 501 Newcomer Award, bestowed upon a first-time MSP 501er that is on an upward trajectory.

Founder Lance Tolar and Phillip Poarch, Tolar’s director of operations, started with changing the company’s perspective on what it was providing to clients. Instead of selling hours and one-off projects, Tolar today focuses on solutions and relationships.

Those first conversations with existing clients were a mixed bag: Some jumped into the new model with enthusiasm. Others didn’t buy in and the MSP had to shed some customers.

Tolar's Phillip Poarch

Tolar’s Phillip Poarch

Tolar started sourcing software and hardware itself and getting more involved in customer projects versus just the labor, Poarch explained.

Other changes involved establishing a standard approach and becoming their clients’ virtual CIO, expanding their discussions to include business strategy, not just IT. Then Tolar began looking at its own offerings, partners and customers through a business development lens. As it evolved to become a service provider specializing in helping customers along their digital transformation journey, it bolstered its service offering with assessments and bundled packages.

A milestone for Tolar was reaching the point at which 90-95 percent of its revenue was from managed services, and its managed services monthly revenue is covering all fixed and overhead expenses to the extent that every project, piece of software and hardware device is just profit that adds to the bottom line.

Many partners still need to transform to keep up with rapid changes in demand, new technologies and industry trends. When starting that transformation, Poarch emphasized that the most important thing is to determine your company’s unique ability. Transforming the culture and getting buy-in up and down the ranks is a close second.

“There’s also just building that belief system for a company that’s trying to transform,” he said. “If the leadership doesn’t believe in what needs to happen, and they’re not willing to be that trailblazer for the company, then it’s really hard to bring other people behind them.”

Staff, especially old-timers used to doing things a certain way, can be reluctant to adopt new models. Many times, employees who come from a break/fix background think if a company bills enough hours, that’s all that matters. But Poarch and Tolar are trying to change that mindset into a proactive approach that identifies a problem 10 steps before it happens.

One of Tolar’s best case studies highlights …

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