Finding Freedom from Chaotic Growth to Grow an MSP’s Business
Today’s Discussion:
There are several points in an MSP’s Growth where the Operational Organizational Structure prevents proper growth.
The biggest struggle area is when an MSP is growing between 4 and 10 Techs.
This is where an MSP needs a major Operational Transformation, because without the Transformation, it is doomed.
Now that I have pronounced your doom, I welcome you fearless Autotask Warriors and Gladiator Community Members back for another discussion on how you can drive your MSP to thrive.
Before we get into that Doom, I would be remiss if I didn’t talk about the Olympic games which are about to close. The athletes have been amazing with both the joy of victory and the agony of defeat. There have been memories (some good, some bad, and some cringeworthy) that will be remembered for decades.
Throughout all of it, many of you have been keeping track of the medal colors across various sports and countries. Some of you even built your own stat sheets or can tell me 50 facts from memory about the swimming or gymnastics teams. And those of you excitedly awaiting the start of the US football season likely also have all your stats at hand ready to argue the pros and cons of every decision the coach makes.
But how much do you know about the workings of your MSP?
How many stats do you have in your head? Do you even know how to get those stats? Or what to do with them if you have them?
When an MSP is between 0 and 3 Techs, it is pretty easy to know:
Where all the Techs are and what everyone is working on
Who All the Clients are and what their business is (known by everyone in the Company)
How the “Sausage is Made”
When an MSP grows to having 10 Billable Resources, they have figured out:
They need a Service Coordinator to keep Service Delivery organized and drive all Client Requests from the cradle to the grave
They need to divide the Techs into Teams, Groups, Pods, etc. and keep dividing as they grow
They have most of the 172 Standard Operating Service Delivery Procedures needed to keep the Chaos down to a dull roar
A Metamorphosis Takes Place at the MSP…
What happens between #4 and #10 Techs is a metamorphosis that rivals a Monarch Butterfly. While I still believe the first hire of any MSP or business in general is a Well-Paid Assistant (someone to take care of the Books, Sales Paperwork, and Client Relationships), very few MSPs can grow beyond 3 Techs without a Full-time Service Coordinator, and the ones that do fail to:
Drive the Chaos out of the work environment – thus, they have significant turnover
Provide a “Best in Class” Client experience – thus having above average Client Churn
Have the Freedom to Grow
Beyond needing a Service Coordinator, there are three other hinderances to growth:
Not knowing who is working on what, if they are working on the Right Next Ticket, or even who is on PTO
Not having standardized repetitive processes, enabling Clients to want their favorite Tech
Not leveraging the Data Hidden in the PSAutomation software to drive strategic decisions like Profitability and Performance
Let’s take these one at a time!
Not Knowing Who is Working on What:
For an Owner of an MSP to have confidence that the Team is delivering a Great Client Experience (so they are Free to Focus on Growing the Business) they need clear visibility into Who is Working on What!
That visibility includes three things:
How many Tickets are Open and which ones are on the Backlog List of Tickets (BLT)
Of all the Open Tickets and which ones are the 3-37% that need intervention to meet Client Experience
Who is working on what at the moment - and is it the correct ticket?
These three things are fairly easy to keep track of when you have 3 Techs or fewer. However, with the 4th or more hire, it becomes impossible, and the Owner is stuck focusing on Service Delivery and not Sales.
To free them up to “Go Sell Something,” they need a holistic, automated, dynamic Autotask Dashboard. One that has the following widgets:
Triage – showing how many tickets are new and how long they have been sitting without review
SLA Summary, Waiting, and On-Hold – as the tickets needing intervention are the ones coming up on Next SLA Event Due Date, Waiting for more than 2-days, and On-Hold with a past-due due date.
Tech Tickets:
# of Open Tickets for each Tech
# of Tickets Ready to Engage – Work at Will for each Tech
Which Techs are scheduled for which Clients Today
After reviewing this information first thing in the morning and before leaving the office each day, an Owner has his finger on the pulse of the Service Delivery Team and can focus on Sales.
If there are any questions or concerns, firing off an email to the Service Coordinator leaves the Owner with the confidence that things will be taken care of without waiting for a response.
Not Having Standardized Repetitive Processes:
Having an Autotask dashboard showing the current state with Standardized Operating Repetitive Processes (SORPs) in place paints a story of what will happen with each ticket in the dashboard.
For example:
Tickets in the Triage widget will be Reviewed, Assigned, and Scheduled, if needed, following the well-known Triage Decision tree process within 20 minutes of creation or the 1 hr. SLA 97% of the time
Tickets coming up on SLA, Waiting, or On-Hold will be addressed with each of their mitigation strategies:
SLA – Tech Workload Rebalancing procedures or updating the Client
Waiting –
Client – 3 strikes you are out
Parts – ETA tracked down and the ticket scheduled
Vendor – Coordinator to Coordinator scheduling
On-Hold – Give the ticket a future due date
Tech widgets inform the Owner of who is having an easy day (relatively speaking) and who is having a very busy day. If there is a concern, touching base with the Service Coordinator eases the concerns and frees the Owner to “Go Sell Something.”
Note: There are a lot of other SORPs off the Owner’s radar, as they should be. In total, an MSP with 4-10 Techs needs 174 Operational SORPs.
Not Leveraging the Data:
We often hear that MSPs are unable to extract the data they need to make strategic decisions (or even to Free them up to focus on Growth). And that is a shame, because the data is there, hidden in Autotask (the PSAutomation software). Autotask Live Reports is the best way to extract that data. But like everything else, Autotask is so robust, an Owner could choke on the data and never get out the door to “Go Sell Something.”
While there are hundreds of Advanced Autotask Live Reports, there are three that an Owner needs at their fingertips so they can run them on the fly. These should be scheduled to come to them on the 1st of every month as part of the Management Team’s Monthly Review.
The reports we strongly recommend the MSP Owner has and reviews often are:
Executive Staffing
Operational Efficiency
Client Profitability
Executive Staffing:
Executive staffing is a Decision Matrix that once built takes about 15 minutes to populate, turn the crank, and have a data-driven decision saying whether to hire or not. There are 4 KPIs that go into the decision matrix:
Resource Utilization
Client Demand adjusted by BLT contraction or expansion
Technician Effort per request
Noise per seat/device
For more information on the Executive Staffing Decision Matrix, please email us at Info@AGMSPCoaching.com
Operational Efficiency:
As there are many MSP Operational KPIs, most are leading indicators of operational performance and some are lagging indicators of CX, but there are four that follow the LEAN Process Profitability KPIs. Based on LEAN Process, here are the Profitability KPIs:
Inventory => Resource Utilization
Throughput =>
SLA Performance
Mean Time To Resolve
Efficiency => Reactive Hours per Endpoint per Month
(This could be its own article, so for more information on the Operational Efficiency Evaluation, please email us at Info@AGMSPCoaching.com)
Client Profitability:
It is critical to know which Clients are overly profitable and at risk of finding a more economical Service Provider and which ones are destroying profitability and preventing growth the most. A Full Monthly Recurring Revenue report will expose which Client is which.
Perhaps you are used to taking Revenue and dividing by Hours worked to determine profitability. It is an easy calculation - but it does not communicate the full picture. Here are some unknowns that need discovered before an Owner of an MSP has the full picture:
What % of Revenue is SaaS, Parts, or Expenses
What is the true burden rate of each hour worked (Compensation, Benefits, % of Overhead)
What % of the Managed Service support should have actually been billed as a T&M line item
Once an MSP works through these questions and the Advanced MRR Profitability Live Report is adjusted, the owner will know in a quick glance at the beginning of each month which Client is at risk of leaving and which Client should be encouraged to leave (or at least a rate increase conversation). (I could write several pages on this, so for more information on the Advanced MRR Profitability Live Report, drop me a line at Info@AGMSPCoaching.com)
Summary:
If you know more about the Olympics than you do about your Techs or can rattle off quarterback ratings but don’t know what your Techs are really doing, where they are, or even which Clients are draining your wallet, then you need a new playbook.
Unmanaged Growth can cause an MSP not to be able to Sustainably Grow, especially for MSPs with 4-10 Techs.
In this stage of growth, the following things are needed:
A Transformational Education Experience that Transforms your Service Delivery Operation from Chaos to a Zen Work Environment
174 Standard Operating Repeatable Procedures (SOPs)
98 Recommended Critical, Important, and Optional Autotask PSAutomation Configuration improvements
20 Advanced Live Reports to Benchmark, Track, and Drive Continuous Improvements
You certainly can’t turn on the TV and get all this from the pre-game show. And you can’t afford to be like ESPN or NBC and have a room full of statisticians.
What can you do that is a cost-effective way to move the ball down the field while effectively managing your MSP’s growth?
For the FREEDOM from Growth to Grow an MSP Business, please email us at Info@AGMSPCoaching.com
Steve & Co