Archives For MSP

OK – Back to talking about technology things! 🙂

I feel like again I should state this – I’m not a shill for any product, If I’m talking about it, it’s because I use it (or my customers do) and love it or I hate it.

With this particular product line, I can also say that I’ve sat on the Quosal advisory board for a meeting so have a little more view point to the future of the product than some other people. But I have no financial interest in any of the customers, nor do I get paid from any of them!

Now, that’s out of the way, I want to spend some time talking about what I consider to be the Dream Team of the MSP world.

Anittel utilise what Connectwise calls “The IT Office bundle” of Connectwise, Quosal and Labtech. We have used Connectwise for all 3 years of Anittel, Quosal for probably 2 and Labtech for only 4 months or so.

Firstly, Connectwise is the secret sauce, this is our ‘source of truth’ and where all of our data resides in one format or another – configurations from Labtech, Quotes as Opportunities from Quosal etc – everything goes into this system and it’s where we pull and push data to and from, for instance to our reporting tool for MIT customers (shoutout to Brightgauge!) and to our accounting package. It’s utilitarian and built as a robust PSA for MSPs – you’re limited by your imagination only with what you want to do with and all of our 210 staff use this on a daily basis for everything from documentation to time sheeting and invoices. This isn’t a basic service desk bolted onto a RMM tool – this is a ITIL based full featured PSA tool.

Quosal, well, what can you say about Quosal. We purchased it basically to get uniformity to our sales proposals – but it’s so much more than that today. Kent, Steven and Sam are pretty much geniuses and this is actually my favourite product of the three. Quosal will do opportunity management for you (in conjunction with Connectwise), has a fully featured web and mobile client, picture based quoting (ask them for a demo of this) and enables you to protect sales margin in a way unseen in any competing products. We have seen a significant improvement in hardware and software gross margin from the implementation of this product and it has more than paid for itself many times over.

I’ve also been fortunate to see the ‘next’ version of Quosal and you’ll just have to take my word for it, it’s awesome.

What I like a lot about Quosal is that it’s designed for sales people, it’s not designed for highly technical people, so it’s very simple to use and will save sales people time which means adoption is a breeze.

Finally, Labtech – we recently transitioned from Kaseya to Labtech and it’s probably the best decision I’ve made over the last 3 years. We were using Kaseya as a simple remote control tool and not really unlocking the true value of the product, one could debate whether it was the Kaseya product, or our adoption of the Kaseya platform – but the Labtech product itself more than stands on it’s own two feet as a stand alone RMM tool whereas Kaseya was a RMM and PSA tool built into one (with more development work being done on the PSA than the RMM), it’s value therefore was limited as we already had a investment in Connectwise. Our staff are loving Labtech thus far and the work that it’s done on minimising our alerts, maintaining our clients PCs and Servers without as much intervention has done wonders for the improvement of our productivity.

But the main reason we transitioned to Labtech because we saw a lot of value in the integration piece between Connectwise, Quosal and Labtech which holds a lot of promise to us due to our size and the synergies we can obtain by having tight integration between the three products.

I know Arnie at IT Nation 2012 demonstrated a similar scenario I’m paraphrasing here, which if you saw should have made you run out and buy all three products but if you didn’t I’m about to blow your mind with awesomeness

Arnie demonstrated a PC installed with Labtech, a Quosal client and a Connectwise Client – the PC was underspecified with resources and required additional RAM. Here’s the information flow which mostly occurs AUTOMATICALLY!

  • The Labtech agent showed too little RAM for the users performance requirements
  • This pushed a configuration into Connectwise
  • A quote was then raised for RAM options automatically in Quosal and emailed to the Account Manager for their review (maybe 1 x 8Gb or 2 x 4gb with options for both)
  • An opportunity was created in Connectwise for this opportunity
  • The customer receives an email quote via OrderPorter and gives their approval electronically
  • This approval closes the opportunity in Connectwise and posts an order to your accounting package (if setup)
  • A ticket is created automatically for the install of the RAM into Connectwise
  • Once the ticket is completed and closed, the configuration is updated in Connectwise and a ‘before and after’ configuration email is automatically sent to the customer showing the amount of RAM they had before and what they have now

How awesome is that?!?!?! Did your head just explode?!

This is true demand generation from your RMM tool out to your quoting tool and delivers value through your tools to your customers that you couldn’t have with really any other tools in this same format.

All of this stuff isn’t future technology or pipe dream stuff, it’s here and now. If you want to talk about how we leverage these tools, please feel free to call, email or message me below!

 

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I’m fortunate enough to own the Managed Services product portfolio at one of the worlds biggest MSPs – that’s not a brag by any stretch of the imagination, but it does mean that I have a bit of an insight into the Managed Services industry, pricing and delivery of those products – http://www.mspmentor.net/mspmentor-100-global-edition-2012-companies-20-to-1/

With that comes a lot of pain, believe me, but also an incredibly amount of challenge on a day to day to basis. One of the key challenges is how to price a managed services agreement so that it’s both profitable to the company and seen to be good value in the marketplace.

That’s about as hard as it sounds and leads to some very interesting conversations with finance people, executives, industry peers and customers around price and value. These conversations are, by necessity, hard for a few reasons.

Firstly, not everyone sees value in Managed Services – their opinion is that if something is broken, we’ll have it fixed, but ensuring it doesn’t get broken doesn’t have a value attached in their mind. While I’ve tried very hard to educate some of these people around lost time and opportunity but in the end you can’t change someone’s opinions and those people will never perceive value no matter what you do – UNTIL they’re offline for 4 days with a server issue, then there is a value perceived but unfortunately that’s usually followed by a “Well, it’s happened once in 3 years, I won’t need to worry about it again statistically for 3 years!” – I do wish computers were linear like this, but unfortunately that’s not the case!!

It’s not just customers who don’t necessarily see value in it, a lot of risk averse C-Level execs of IT companies see it as a risk which they’d rather not undertake as, especially in a ‘all you can eat’ model it is an unquantifiable risk.

I’m a bit pragmatic around the risk and partially agree with the risk averse around ‘all you can eat’ agreements, it’s very difficult to price risk (just ask any of the major re-insurance firms that struggled through Hurricane Katrina) and if you do it’s always a high price so you end up pricing yourself out of the market, or not being able to demonstrate value.

Which brings me to my next point, price – how do you price an agreement so that you maintain a respectable bottom line in a business and wether the ebbs and flows of agreements being less and more profitable.

There is an interesting survey done each year by Kaseya on Managed Services pricing available at: http://www.kaseya.com/lps/en/lp/2012/MSPGlobalPricingSurvey_Q4.aspx

It has a raft of intriguing information on how our peers in industry price their agreements and is well worth a read.

Anittel price their agreements on a per device basis, with added value services included depending on the plan chosen. We don’t put the line item pricing out there because we don’t see a reason to do so, but publish a calculator for our sales team to punch things like PCs, thin clients, servers etc into and a price is delivered at the end of this. This works really well for up to about 75 clients, but above that the pricing becomes difficult to compete with ‘tender based’ business – we deal with clients above that size based on the calculator but look to add in services, or discount other services to make the proposition more attractive.

That’s all good and well with regards to price and value, but then how do you know that your MSP business is profitable based on that pricing and value – if you sign up a whole lot of customers on agreements that aren’t profitable for a long period you’re going to struggle financially.

As a business we measure a predominant metric which is around Managed IT Average Hourly Rate which is a report ran monthly and at it’s basis is a calculation like this:

($ValuePaidByClient – software costs such as RMM/Backup) / Hours Worked on Agreement

For Anittel – an effective hourly rate of >$100 hour on average across a location is good, anything lower than that is bad. Some agreements will go up and down in a given month, but one needs to establish a trend rather than a point in time measurement and an average of a location or business is the best metric.

I’m pretty sure it was Drucker that said “What you can’t measure you can’t manage” or something like that – Once you have this data on how profitable or not your MIT agreements are, what do you do with it to actually MANAGE an outcome.

What we’ve found is that if customers have a persistently low MIT average hourly rate, they have one of these problems:

1. You’ve discounted your agreements too much or priced them incorrectly to start with

2. They’re on a legacy, incorrectly priced agreement

3. The customers has an underlying infrastructure problem which is causing a lot of support and either hasn’t been clearly explained to a customer what the fix is or the customer is choosing not to do anything about it because there is a cost associated with fixing it

4. You have a skills issue with your employees (ie they aren’t fixing things as quickly as they should be, or are padding time out)

And the outcome of any one of those issues is unprofitable agreements, unhappy clients and unhappy staff. Bear with me while I explain why the latter two occur.

If a customer is constantly seeing an engineer because of an underlying infrastructure problem, they’re going to think you’re pretty silly and be not happy with your performance and leave you for someone else. In fairness, that might not be a bad thing because if you’re not making any money on the agreement it’s not a bad thing to not have them – but in the meantime you’ve burnt a lot of time and your reputation on someone who is going to leave as they are unhappy.

You’ll also get unhappy staff, because they’ll constantly be hearing from the same client(s), who will become increasingly angry at them and they will be unable to help.

The last problem is probably the biggest, you’re essentially throwing money away on customers who will leave you because you’re not fixing their underlying issues!!

It’s a strange corollary that the happiest managed services customers are always the ones with the highest average hourly rate, they’re paying to avoid problems and are avoiding them so are happy. Regardless of how charming/good looking your IT people are, very few of your customers ever want to see them! Managed services is a partnership, clients pay for you to avoid problems and the business case is that you’re incented to do so because you’re more profitable if you’re doing less work for them.

So, back to pricing, if you know what your resources cost you, you can very quickly understand why pricing MIT agreements properly is essential – get it wrong at your (contractual term length) peril!