Why invest in Maximizing Profit for MSPs using the Autotask software?
Welcome back Autotask Warriors and Gladiators. I am so glad that you are here.
As I write this, the sun is streaming in through a window, and all seems well in the world. But if you look a bit deeper, you see what looks like a storm on the horizon. A quick check of my favorite techno gizmo confirms that. I’ll need to shut the windows and batten down the hatches, but not a big deal. Storms come all the time (especially in winter when I lose power), but I’ve learned how to deal with them and have processes in place to get through them.
If only it were that easy in business. “Hey Alexa, are there storms coming for my business?” “Siri, how many techs and how much money in the bank do I need to survive a storm (pandemic/economic downturn/Tech leaves/medical issue)?”
If you are an MSP owner, think about why you are in business? Probably because you were a Tech employee one day and decided you could do it better than your employer. Or perhaps you aren’t Techy at all but are an entrepreneur and enjoy the excitement of building a business.
If you are an MSP employee, think about why you work where you do? Think about why your owner runs the company.
Both Owners and Employees surely want to take good care of their Clients and make the world a better place. I know my team at Advanced Global feels that way.
But be honest. You go to work each day in order to make money. Money that provides for your family, pays the bills, and (hopefully) allows you to live the good life. To do that an MSP needs to make a profit.
“But why are profits so important?” you ask. “I’m happy just getting by and profits and numbers are for those big companies I started my MSP to avoid.”
Great question. Profitability is crucial for a business for several reasons:
Financing Growth: Profit is essential for a business that desires to expand its operations. [3]
Attracting Investors: A company that earns continual profits is seen as a potentially good investment option. [3]
Hiring More Employees: A profitable small business has a better chance of affording to pay new employees’ salaries. [3]
Ability to Borrow Money: A company’s profitability plays an important role in whether a bank lends the company money. [3]
Survival and Growth: Both profitability and growth are important and necessary for a company to survive and remain attractive to investors and analysts. [4]
Many MSP Owners are retiring now and “exit strategy” is a buzzword right now. A Profitable company allows you to retire and actually enjoy it! [Me]
The Problem:
Owning, Running, and Maintaining a Business is very difficult. And that is not easy. Statistics from the Small Business Administration show that from 1994-2019, 67.6% of new businesses survived at least 2 years. By 5 years, though, the percentage dropped to 48.9%. At the 10-year mark, small biz survival rate plummeted to 36.3%. [1] [2]
If you have been in business for 10 years or more, KUDOs to you, but my guess (having only been in business for 7 years) is that it is not any easier to stay in business (I confirmed with an AD team member who owned an MSP for 15 years). If you have been in business less than 10 years, like Advanced Global, then join me in saying “Staying in Business is very difficult, and it is critical that we Maximize our Efficiency – for the purpose of survivability only.”
But there are other benefits to Maximizing our Efficiency! It makes life easier for the Team, Clients, and getting home for Dinner on Time each Night. It also makes making and keeping promises to the Client (during both the Sales and Support conversations) easier to make with confidence that these are promises they can depend on, and in itself drives efficiency due to less noise, apologies, and “Come to Jesus” meetings.
There is a very long list of other benefits to Maximizing an MSPs Service Delivery Efficiency using the Autotask software. However, the list does include:
Creates and Maintains a Zen Operational Work Environment
Creates and Maintains a Streamlined, Accurate, and Automated Invoicing Process
Creates and Maintains Raving Fans which Drive Sales
Creates and Maintains the Freedom to Go Sell Something and Grow the Business
Feels like a series is coming, doesn’t it? Well, we will dive into each of these four bullet points over the next few weeks, but for now, let’s take on the topic of “How to Maximize Efficiency for an MSP using the Autotask software!”
The Solution:
There are a few concepts that we need to get our head around before we can put together a comprehensive Maximize Efficiency Plan:
It takes Time, Consistent Effort, and lots of Energy:
Many MSPs have struggled for 10 years or more and have not achieved Maximized Efficiency. Matt struggled for 15 years to get it dialed it and then was able to sell the MSP and now works here for fun. For me (Steve) it took 7 years, working 20+ hours per week, navigating in the dark, from one pain point to another. Because of my Process Reengineering background, I was able to navigate a straightforward path with very little trial and error. Because I was employed by a fairly large MSP (80 Employees when I arrived and 172 Employees when I left) that was in business for 25 years, I inherited a lot of tried-and-true processes, and they could afford to have me work 50-75% of my time figuring out how to Maximize Efficiency and Fully Leverage the Autotask PSAutomation software. It is not because I am smarter than anyone else in the industry, it is because I took advantage of a very lucky opportunity.
“By default, no PSAutomation comes configured for use” - Aaron Kennedy, Cognition 360. However, it only takes 36 hours to reconfigure it from a default Volkswagen Beetle to a fully souped-up Formula One Race Car. What takes time is the Mindset Changes, Internalizing a better way to do things, and changing the day-in-day-out habits. Knowing the path, having an Operational Improvement process without rework, and a Guide-on-the-Side to encourage and hold the Team accountable, it still takes 18 months to fully Maximize Efficiency.
It includes three components:
Process Improvements
PSAutomation re-configurations
Advanced Live Reports
Process Improvements:
W. Edwards Deming [5]
How many processes can there be, you ask? The answer is:
85 for the Service Delivery Team
30 for a Streamlined Labor Invoicing
48 for a Better Client Experience w/ Real-Time Time Entry
20 for the Service Manager
Note: the list is growing and improving all the time
PSAutomation re-configurations:
PSAutomation re-configurations refers to the process of adjusting or modifying the configuration settings within the Autotask PSAutomation software. These adjustments can involve various aspects, such as contract configurations, system requirements, and integrations.
How many re-configurations can there be, you ask? The answer is:
39 for the Service Delivery Team
15 for a Streamlined Labor Invoicing
17 for a Better Client Experience w/ Real-Time Time Entry
20 for the Service Manager
Note: the list is growing and improving all the time
Advanced Live Reports:
Autotask comes with some canned reports. These reports cannot be modified and are for just the basic needs of what AT thinks is a standard MSP. Growing MSPs will rapidly outgrow them. Fortunately, Autotask has a powerful report editor that allows you to create Advanced Live Reports that can be customized and scheduled. Make note that these are reports YOU must write.
When it comes to the power of scheduled Advanced Live Reports, the list Advanced Global recommends includes:
Resource Utilization report date stamped on Monday morning
Real-Time Time Entry report date stamped on Monday morning
Backlog List of Tickets report delivered on Wednesday morning
Scheduled Tickets with no future Service Calls delivered on Thursday morning
SLA, Workflow Distribution, and Mean Time To Resolve, all delivered on the first Tuesday of every month
Daily QC reports for Triage and Open/Assigned/Closed reports
Not to mention 20-30 other Advanced Live Reports to choose from. These reports take a lot of time and a lot of skill to write, so many MSPs turn to the experts at Advanced Global to write these.
But the big 4 – the ones that drive profitability – according to LEAN Process profitability KPIs/Reporting:
Inventory => Billable Hours or Resource Utilizations
Throughput => SLA or Mean Time To Resolve (SLA w/o wait states) Performance
Efficiency => Reactive Hours (Break/Fix) per Endpoint per Month
It takes a Plan, Success Criteria, and a Champion:
According to Clifton Butterfield and HDI, there are three things that failed improvement programs have in common:
No Plan or Roadmap on how to achieve the Process Improvement goals
No Success Criteria to know where you are going and when you arrive
No Champion to hold everyone accountable to stay focused, energized, and to carve out time out of a busy work week to execute the plan
Is this you? Be honest with yourself. It’s okay – I’ll explain all three right now.
So, what does a Plan or Roadmap need?
Specific Standard Operating Procedures (SOPs) improvements to implement
Tool changes to support the SOPs
Data to Set Benchmark, Track Results, and Guide the SOP implementation and/or improvements
So, what does a Success Criteria look like?
If full operational optimization is the desired end goal, or at least the general direction of operational efficiency improvements, then we strongly recommend borrowing from LEAN Process Profitability KPIs:
Inventory => Billable Hours or Resource Utilizations
Throughput => SLA or Mean Time to Resolve (SLA w/o wait statuses) Performance
Efficiency => Reactive Hours per Endpoint per Month
However, these are the result KPIs to determine if you are heading in the right direction or even achieved Operational Efficiency. Where we need to focus is on the leading indicators. The leading indicators for each area of an MSPs operation (Sales, Finance, Back Office Support, HR, Project Management, and Service Delivery) are all different.
For the Service Delivery Area (we start here because Labor is the biggest expense, and there is usually more labor on the Service Delivery Team than any other Team) leading indicators can be grouped into three areas:
Intake and Open Ticket Management
Tech Performance
Client Experience (CX)
Note: 87% of Operational Efficiency Improvement Programs FAIL because they are missing one or more of these three elements – all three are necessary to be successful.
So, what does a Champion need and need to do?
The first thing that comes to mind is accountability. But in reality, they keep the energy up throughout the program, make sure everyone on the Team is focused on their part, and carves out time to meet their commitment due dates.
The Champion (or Guide on the Side) also tracks the metrics and lets the Team know how they are doing. They are responsible for maintaining the plan/roadmap and document collaborations changes from the original vision.
On yes, they also hold everyone accountable, including themselves to make sure the program is completed on-time and on budget.
Wrap-Up
Thanks for staying with me. I imagine many of you are 30 seconds from cardiac arrest as “this sounds so hard,” “I do not have 6 Techs”, or I’ll just never grow.” ENOUGH! I have the plan and Team to help you. You can take my boilerplate above and DIY, join our Gladiator’s Community for guidance, or you can work hand in hand with my team to grow your MSP and build a Happy Team with raving fan Clients. Embrace the Suck! Get ‘er done. You can do this!
See you next week!
Oh, by the way, the first steps on the road to FREEEDOM and MAXIMIZING PROFITS, are FREE:
To download your copy of the FREE NO-Obligation PSA Configuration Evaluation Scope of Work, click here.
Steve & Co