So often as a managed service provider was a running with our choke out and trying to get all the critical and urgent tasks done and we forget about the important ones that will really change the way we deliver service and delight our customers. In today’s episode of the IT provider network we are going to talk about how 90% is not good enough.
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Episode 2 – Why 90% Isn’t Good Enough
2017, Terry Rossi
IT Provider Network
Terry: I was talking to one of my team the other day about one of the most important things an outsourced IT provider needs to do and that is finish the projects they start. This is especially important for a flat-fee manage service provider or really any company that has a long-term relationship with their clients. We were talking about a couple of our recent phone system projects that we’re implementing and specifically a new cloud-based telephone system. We don’t do a lot of voiceover IP work or telephone work so we needed to make sure that we really complete these projects 100%. So often as an MSP we’re running with our chokes out trying to get all the critical and urgent tasks done and we forget about the important ones that are really changing the way we deliver service and delight our customers. In today’s episode of the IT Provider Network, we’re going to talk about how 90% is not good enough.
Female: Welcome to the IT Provider Network. Are you a managed service entrepreneur wanting to take your business to the next level? Do you excel in IT but feel your business management could be better? Join Terry Russey, where every episode he shares the skills, tips, and tricks that helped him to build a successful worldwide business.
Terry: Welcome to episode 2 of the IT Provider Network and thanks for tuning in and joining me on some of these first initial episodes. I promise you to work to continually improve and bring value to you and your company. My goal is to join you once a week and share some of the insights and lessons I’ve learned in growing my managed service provider business and working with small medium and larger enterprises all over the world.
Back to my story about the telephone projects we’re in the middle of doing. We’re working with a new vendor, new for us, called Zoltis. They manufacture and sell an on-premise physical or virtual phone system for small and medium-sized businesses as well as a fully hosted cloud-based solution. The thing that attracted us to Zoltis was the fact that they tied together telephone, instant messaging, electronic faxing, and conferencing all together and allowed you to use this phone system with or without a phone instrument. You could use a soft phone on your laptop for example. Their system relies on a piece of software that has all the high-end features built into it so the phone itself is actually a rather dumb device. This isn’t an advertisement for Zoltis although we’re very happy with the company and the product. So if you are interested, I have put some contact information into the show notes at the itprovidernetwork.com/episode2.
We had a couple of nice winds with the product and we decided to go for the Zoltis cloud offering for a local township police department and court system. We aren’t their IT provider yet so we wanted to have minimal reliance on their LAN and dealing with another IT company that we hopefully would be replacing soon as soon as their contract expires. So we put them in the Zoltis cloud which is a full service offering as I said, flat fee per user, and they provide the SIP Trunks hardware software support etc. Essentially, we just get a commission. So when we sold this project, we developed a project plan that included all the pre-cutover tasks, the planning, number porting, auto attendant creation, mailbox and user your creation, and then the go-live services, as well as user training and documentation. It was all good and the cut-over actually went off without a hitch but that’s when the rub came in and why I was talking to my team.
We only have two certified Zultys guys and one of them is me. It is imperative that our engineer, the one that implemented the project gets the project 100% done, including all the things that help us scale and grow. We need to have all of our techs have the ability to support any new customer and any new project so that all the components of the system, all the nuances of the customer are all documented and live within our systems. Anyone picking up the phone can help any customer with anything at least to some extent. This reminds me of one of the sayings I’m always harping around in the office, and that is “Always be thinking of economies scale or economies of knowledge.” Economies of scale used to mean making a jig or a pattern or a dye or improving some kind of manufacturing process to be more productive. In our world, it means creating a knowledge template, something that we can reuse and reap all the effort that went into the first project that we do on subsequent projects. So often when we take over an existing MSP client, someone that had a previous provider, we find that they had zero standardization, zero documentation, and zero consistency, and that means one of a couple of things – neither of which are good for them or our clients. It means the previous provider was probably a one-man band and had all the knowledge in his head of each client each implementation, or it means even worse, he hired an engineer and that engineer had all the knowledge in his head. It also means that they didn’t allocate time to complete their projects 100%. They didn’t document, they didn’t standardize, they didn’t train in a way that they can reuse that effort. So why is this important? Well, it’s important because this is how you make real money. Running a managed service provider that can correctly scale is one that has standards, it’s one that has processes, and it’s one that has documentation. It is one that will be best in class and it’s one that will be at the higher end of the OML or operational maturity level.
If you’re not familiar with the framework of the operational maturity level, it basically ranks service providers from a level 1 which is a company in chaos to a level 5 which is a company with Zen-like skills. If you’d like to know a little bit more about the OML and how it can help your business, I recommend you catch a webinar or a conference session with Paul Dipple from the Service Leadership company. I’m not sure if Paul created the OML but he is definitely an authority on the subject, and Service Leadership can help you move your company up that OML level. More information about the ‘what’ and the ‘whys’ of the OML and Service Leadership is on the show notes and again you can find them at the itprovidernetwork.com/episode2.
What can you do to make sure that you’re poised for scalability and growth? I want to leave you with three suggestions on how you can move your company up on the OML scale and put more profit to your bottom line. The first is allow adequate time in your project plans for internal and external documentation. I say “in your project plans” but in reality, it’s also in your work schedule for your technicians. This is one of the hardest things we have to do since we’re always running after the urgent and critical things that our customers require of us. It’s important to carve out quiet time for deep work, time for your engineers to document, standardize, and improve your processes. In a book I just read by Cal Newport called Deep Work, Cal declares Deep Work as the killer app of the knowledge economy. Now think about it, it’s time for you to really, really think about what you’re doing and improve what you’re doing and not run around chasing the latest shiny penny or dealing with the latest urgent need that comes up. He’s also very insistent that good intentions won’t cut it, you need to carve out time for deep work and that needs to be a distraction-free zone, no cell phones, no help desk calls, no social media, just good deep thought on what you’re doing, how you’re doing it, and how to improve it.
The second thing you can do to improve profitability is move your junior techs up the line with their skill sets so that you can use a proven process and lower labor cost to implement the same best in class projects. It doesn’t take a rocket scientist to realize if you sell a product for $100 an hour and you use a $40 an hour resource instead of a $60 resource, you’re going to make more money per hour on that project. It is however a little harder to do this and deliver a quality product unless you have good documentation, unless you have standardized processes, unless you have people committed to doing projects 100%. When you get smaller projects that are outside of the comfort zone of your junior techs, pair them with a senior engineer. Let them take the lead, let them learn, let them grow. The next time you will be using a lower-cost resource to deliver the same quality product and you’ll be moving your junior techs up the career ladder within your company.
And third and finally, I would suggest you implement an in-house system that facilitates the cross-pollination of skills so that your entire service team has at least some knowledge on the most important things you support. At our company we’ve made an internal launch and learn program part of our corporate culture and we’ve tied it into our incentive plan for our service team. Each quarter, each member of the service team must present an internally recorded launch and learn to the service team and anyone else in the company that wants to attend. This has proven to be an excellent way to cross-pollinate skills amongst our service members. Our latest one was actually on the Zoltis cloud phone system. So the entire team now has a situational level of knowledge about this solution that we’re selling and now supporting. We have moved from guys being the sole source of knowledge on a product to a team of people that have training and exposure and can work with our client base to help support them. So that’s it, three tips to help you move your company forward today, talking about getting the projects done 100%.
I want to thank you for tuning in, spending 30 minutes with me. I do appreciate your time. I know it’s valuable and I hope you’ve gotten something from today’s lesson. I’d love to hear from you and what you’re thinking. Please contact us at the itprovidernetwork.com. You can fill out a form, send a voicemail, whatever is easier for you, but I’d love to get your suggestions and comments for future episodes. Once again, I thank you for taking the time to be with me today, have a great day and remember we are IT.
Female: Thank you for joining us and we hope you’ve been inspired. Check us out on social media via @itprovidernet and visit us at www.itprovidernetwork.com for past episodes, show notes, videos and more. We hope you’ll join Terry next time on the IT Provider Network.
Terry: So I just got done mixing down episode 2 of the It Provider Network and I realized it’s not 30 minutes, it’s actually only 10 so I figured I’d give you a little extra content if you hung in there till the end. I wanted to let you know a little bit about what I have planned for the network. I think there’s a lot of valuable information out there for managed service providers, cloud service providers, and IT providers in general but what I don’t think there’s a lot of is content that’s created by someone that actually has done it, actually in the business right now today doing what you do every day, all day, and running a successful business. So if you hung in here, I’m going to give you a little behind the scenes.
Our company was founded in 1995 by myself and my business partner. We operate in the Philadelphia Marketplace. I’m going to give you a little behind the scenes since you hung in here till the end. We’re a Philadelphia-based managed service provider that started our company in 1995, working with Fortune 1,000 manufacturers all over the world. We started as a software development consulting company working in the ERP platform called QAD and we worked with all kinds of companies all over the world back in the early days of the internet before VPNs were common. I traveled all over the country as well as all over the world helping people get their systems implemented, working mainly on Unix and Windows and actually back then MicroVAXes and VAXes but then the world got flatter. The internet got more prevalent, we were actually able to do our work from our New Jersey location without traveling all over the world.
So things started to change, manufacturers started moving offshore, business started getting a little tight. So in 2008, we stumbled across ConnectWise the software platform that we used to manage our business, it’s called a PSA or Professional Service Automation software. We stumbled across ConnectWise and also across the whole idea of managed services. I actually had heard nothing about it ever before. When I did find out about though, I realized it was something I needed. We had 15 or 16 employees. We had remote employees, local employees, server infrastructure, hosting infrastructure, and patching, and centralized management that was all becoming a big problem for me. I was the technical guy in the company. I was the one that had to deal with all the technical tasks, the patching, the antivirus, the spyware, the malware, the operating system upgrades. So I thought, “Hey, this would be great. Let’s get us a managed service provider and let’s see what we can do.” So that’s what we did. We hired a managed service provider and started working with them.
Fast forward about a year later, our environment was pretty complex for the MSP that we selected. We had 20-something servers because we were a data center. We had hosting. We were an ISP previously. So quickly I realized we probably could do it better than they were doing it. I worked with that company and actually bought their book of business and started our own MSP, that was 2008. We hired a couple of salespeople, a hot shot technician, and we started but we were a much different company then than we are now. We had no procedures, we had no documentation, everything was a complete one-off. We did it as well as we could do it but we never got any reuse out of the work we did. We started the MSP because we were tired of working for one hour and making one rate. Back in the day, we might have made $185 an hour when we worked for one hour. It’s all great until you’re not working for 1 hour or 8 hours or 40 hours or 80 hours or you have a team of 20 that half of them are working and half of them aren’t. We wanted to be able to get a monthly recurring revenue similar to ISP business where dollars would come in every month just like clockwork.
So we started to step up our game, hired some outside coaches, started working with peer groups, that’s when things really started to grow. There’s an old saying, “You can’t improve what you don’t measure.” Once we started measuring things, we really, really, really were able to make change. We were starting to become world class. Fast forward a couple more years. Now we have some momentum going, everything is going good on the sales side, we’re closing business, everything is good. The problem was our service department was falling apart. I was running it and I was doing it poorly, really poorly. We had high turnover which meant a big problem for me. Every time one of our senior engineers would leave, I was the guy stuck maintaining our customers. We had some pretty big customers too. A lot at stake. Customers that brought in let’s say close to a million dollars a year. I didn’t want to lose them. I was always and behind the 8-ball hiring a new guy, getting him up to speed, trying to make him happy, trying to keep him but all the while I was probably alienating him and putting him out the pasture. What did I do? I found a really, really good service manager. When we could afford it, I brought him onboard. His job is to keep those guys happy. I have to tell you, it’s the best money I’ve ever spent. Our business is so much stronger now because we have a good solid service team, virtually zero turnover, guys that want to improve, guys that want to move up the career ladder, guys that want to stay with our company. Huge, huge difference.
So I wanted to share a little bit about my company, a little behind the scenes with you since I promised you a 30-minute episode and you only got a 10-minute episode. I appreciate you hanging in there. I really wish you’d subscribe to the podcast. You can do that on iTunes or Stitch or wherever you listen to your podcasts. That really helps. It helps me know that you’re listening. It helps me know that what I do is helping you and it helps me sit down and plan the next show. So thanks for tuning in. I really do appreciate it. I wish you the best of luck in your business and remember we are IT.