David Wilkeson, CEO dave@mspadvisor.net 330-286-9070 - - PowerPoint PPT Presentation

N-able Global Partner Summit 2013 Get Out of Your Trench… It’s Killing Your Business!

David Wilkeson, CEO

dave@mspadvisor.net 330-286-9070 www.mspadvisor.net

www.linkedin.com/in/davewilkeson/

About David Wilkeson

• Serial technology entrepreneur
• COO and Partner in DRS from 2005 – 2013

–Went from a 9 person break-fix shop in Youngstown, OH to an 85 person MSP and Cloud Provider with

• ffices throughout Northern Ohio and Western PA

–Participated in many industry groups – VTN, True Profit Groups, TruMethods, Service Leadership

• Technical and sales background
• Formed MSP Advisor, an MSP consultancy

The View From The Trenches

• Most owners spend too much time in the

trenches

• The trenches are comfortable…unless they are
• n fire
• It’s dark in the trenches – you don’t have a

good view of your business

Two Kinds of Owners

Sales Background Technical Background

Signs You’re in the Technical Owners Trench

• You believe the project/engagement isn't worth doing

if it isn't technically sound (by your standards)

• You believe quality sells itself
• You believe cost is secondary to design
• You believe every customer is different, therefore every

design has to be different

• Your new hires are predominately high end engineers
• You are too light on true Management (after all,

managers are one of the reasons you went out on your

• wn!)
• This works in a project-driven VAR organization
• In an MSP, it impedes your growth

Signs You’re in the Sales Owners Trench

• You believe you can sell your way to prosperity
• You believe revenue is king (vs. profit, costs, etc)
• You believe all deals are good deals if the

customer is willing to pay a certain $$ amount

• You believe you are just one sale or $X away from

solving all your problems

• This works in VAR, Pro Services or Cloud sales
• In an MSP, it impedes your growth

Problems with Sales Focus

• Revenue is not the ultimate KPI
• Neither is Labor Loaded Gross Margin (LLGM)
• Employees become overwhelmed by volume
• Typically overpromise and under deliver
• Constant fires
• Forces everyone into a very reactive mode
• Owners priority is to make more sales to fix the

above problems

• Owner is so “100,000 foot view” that they can't

see the root causes of problems

Problems with Technical Focus

• Typically low profit and low growth
• Consistent cash flow issues
• No sales pipeline insight, sales are not predictable
• Unwise spending/over spending on infrastructure

and tools

• Labor numbers too high, LLGM is too low
• Lots of chiefs, not many Indians – or no chief at

all

• Owner is so down in weeds that they can't see

the root causes of problems

Balance is the Key to Success! Balance is the Key to Success!

Technical

Balance is the Key to Success! Balance is the Key to Success!

Technical Sales

How to Bring Balance How to Bring Balance

Technical

The Three P’s of Balance

• Planning
• Processes
• Performance

Indicators (KPIs)

=

Predictability!!

Planning Planning

Technical

• Identify (or hire or

partner with) the Yin to your Yang

• Commit to regularly

leaving your trench

• Implementation of

processes is a process!

• Set goals and deadlines

in writing

Sales Processes Sales Processes

Managed Services is a Product

• It includes specific services

and features

• The tools like N-able are

features of your product, not the actual product

• Products are predictable
• Describe your products in

writing

Sales Processes Sales Processes

Establish a Predictable Sales Process

• Sales pipeline tracking

process

• Deal close rate tracking
• Activities to keep pipeline full
• Simply answering the phone

is not a predictable sales process

Technical Processes Technical Processes

Establish an Onboarding Process

• Who, what, where, when
• Standard documentation is

key

• Establish a standard project

plan for onboarding and stick to it

• Determine how many you can
• nboard per month

Technical

Technical Processes Technical Processes

Technical

Establish a Standardization Process

• Goal should be 90% similarity

between customers

• Customers expect “Best

Practices” from MSP’s

• Standardization should be part
• f all upgrade projects
• Standardization improves

support

Technical Processes Technical Processes

Technical

Establish an Automation Process

• Automate everything possible
• Identifying automation targets

is key

• Automation decreases labor

costs and improves support

• Automation improves

customer satisfaction

Technical Processes Technical Processes

Technical

Establish a Detailed Ticket Handling Process

• Must focus on SLA adherence

and predictability

• Establish role based steps

rather than employee based steps

• Use ITIL “lite” as a basis
• Consider a triage process

Technical Processes Technical Processes

Technical

Establish a Process Improvement Process

• Processes must change as

your business grows

• There’s always a better way!
• Regular formal meetings

work well

Process Improvement Meeting Process Improvement Meeting

Technical KPI’s Technical KPI’s

Technical

Service Level Agreement (SLA) Adherence

• Must be measurable in real-

time and readily viewable

• Must be clear contractually
• Should be the same across

the board for the same product

Technical KPI’s Technical KPI’s

Technical

Mean Time to Resolution (MTTR)

• Should be broken down by ticket

severity and product

• Trends are more important than

the number (if the number is within reason)

• Should not be used as an SLA

measurement in Outsourced IT type Managed Services

Technical KPI’s Technical KPI’s

Technical

Open Ticket Count

• Should be broken down by

ticket severity and product

• Week to week trends are

more important than the number

• The trend is a good measure
• f the health of a support

group

Technical KPI’s Technical KPI’s

Technical

Opened/Closed Ticket Ratio

• Important number to know
• n a daily basis
• Critical number to know on a

rolling weekly basis

• Consistent weekly ratio >1 is

bad news

Technical KPI’s in Action Technical KPI’s in Action

Sales KPI’s Sales KPI’s

Sales Pipeline $$

• Target amount varies by

company

• Forecast value of deals in

process, adjusted for sales phase and close rate

• Good sales forecasting drives

managed growth

Sales KPI’s Sales KPI’s

Deal Close Rate

• Varies by company, sales

technique, and target market

• Tracking close rates allows

you to analyze your sales process

• The more predictable your

close rate, the tighter your sales process is

Sales KPI’s Sales KPI’s

Customer Retention Rate

• Important to know what

contracts are in jeopardy and why

• This needs to be factored

into your sales pipeline and forecasts

Sales KPI’s Sales KPI’s

Labor Loaded Gross Margin (LLGM)

• MSP Revenue – Costs associated with

MSP (tools, licenses, travel, etc) – MSP Labor Costs / MSP Revenue

• Goal is > 70%
• Ex: $150k MRR - $5k in costs -

$40k in labor / $150k = 70%

• Goal is only attainable through

tight processes and correct pricing

Sales KPI’s Sales KPI’s

Effective Hourly Rate (EHR)

• Customer Contract Revenue / Contract

Hours Used

• Goal is > $125
• Ex: $5k MRR / 40 hours = $125 EHR
• Individual customer EHR is a

good indicator of the health of that customer

• Bad average indicates bad

customer fits, pricing too low, or bad processes

The Ultimate KPI The Ultimate KPI

Technical

Predictable and Stable Bottom Line Profit

Questions?

David Wilkeson

dave@mspadvisor.net 330-286-9070 www.mspadvisor.net

www.linkedin.com/in/davewilkeson/