Why Increased Profitability Might Be Out Of Your Reach
If you’re a VAR or integrator looking to become more profitable, check this out. I attended a lot of trade shows and partner conferences focused on managed services this fall and sat through a ton of educational sessions. Something that really jumped out at me about MSPs is their focus on business metrics.
For MSPs, tracking their performance and what’s going on with their clients is very important. Without such tracking and reports (made possible by using a professional services automation tools) they’d be operating blindly and have no idea how effective employees are, how efficiently things are running, and how profitable they are.
I’ve been interviewing break/fix VARs for seven years and no one ever mentioned things like mean time to resolution (MTTR) and labor loaded gross margins (LLGM). Things that MSPs are intimately aware of.
The information you can glean from a PSA is well worth the cost of the software. If you’re using a hodge podge of software to run your business and think you’re missing nothing by not having a PSA tool, you’re wrong.
As a VAR/integrator not yet focused on managed services, there might be a handful of reports you look at on a weekly basis and one or two you look at daily. Maybe. MSPs constantly keep one eye on their dashboards to ensure things are running smoothly and the business is making money. Until you embrace the power of automation tools and use a PSA, you're not going to have access to the information you need to fine-tune your business and increase profitability.
If you've been scratching your head trying to uncover the secret to increased profitability, the path is through automation tools and reporting.
As you begin the journey to managed services and automation, here are a few resources to help you out:
Key Performance Indicators To Live (Or Die) By - awesome article that explains key metrics MSPs use and how they are calculated.
PSA (Professional Services Automation) Software Solutions Product Review - jump-start your PSA research with this review.
Channel Transitions 2014 VAR/MSP Executive Conferences - BSM recently launched regional conferences to help break/fix VARs transition to the as-a-Service model. Find one in your area in 2014.
What's Delaying Your Transition To Managed Services? - great feature article on a leading MSP's journey to increase profitability.