A Secret SLA Way to Improve Profitability for Service Managers
Here’s a peek at what you’ll learn today:
Quick recap: the SM’s #1 responsibility
Linking SLA performance into profitability
What to know about the SLA performance report
The clear, bottom-line impact of SLA performance
If only we didn’t have to deal with Clients…
Tech engagement/disengagement
Backlog List of Tickets (BLT)
Triage those Requests!
SM’s must prove their worth
If all this didn’t make sense, help is here
Greetings, Autotask Warriors! Welcome back to our discussion on the responsibilities of the Service Manager. I hope these articles have been helpful to you in growing your MSP.
Last week, we talked about the SM’s #1 responsibility – Profitability – by looking at Resource Utilization and the Advanced Resource Utilization Report. This week, we are going to talk more about profitability and the SM by connecting SLA Performance to profitability.
I apologize in advance if this gets a bit abstract. Tying the SLA performance into profitability is an indirect connection and is usually much better explained in a conversation with an Advanced Global Coach than in an article. So please bear with me while I attempt to put my thoughts into writing.
Now, let’s roll up our sleeves and dive in.
After Resource Utilization, Leveraging the SLA performance report is the 2nd easiest way for a Service Manager to positively impact the bottom line.
Here’s what to know about the SLA performance report, unlike the Resource Utilization report:
It does not track financial information.
It does monitor and report on a whole host of operational functions.
Each of the operational functions, when performing well, has a by-product that impacts the bottom line.
For example, you know Client expectations are being met when:
They don't contact the Tech as frequently asking for updates via calls, email, or texts.
VIPs relax and let the process work without asking to jump the line or for other special treatment.
They don’t get frustrated and start looking for another Service Provider.
And if Client expectations are not being met, then wouldn’t you rather know that before they ditch you & hire your competitor?
As you can see, there is a clear bottom-line impact of SLA performance. Here are some more impacts of understanding and managing your SLA performance:
Techs engage as expected.
Requests (Tickets) stay off the backlog list of tickets.
The Triage process works as needed.
Service Manager time is spent driving other improvements or growth.
The Owner spends less time in backpaddling or damage control conversations.
I know you have questions, so let me break this down a bit further, showing how all these areas impact the Bottom-Line:
Client Experience:
Consider how much more efficient we could be if we did not have to deal with Clients. Now I know that Clients pay the bills, and I know the best Clients are the ones that complain the most (because they drive you to improve)…but, if they were not so noisy or disruptive, how much more efficient would the Techs be? Efficiency here equates to more time to provide more billable hours. The reason I say that is because most of the activities we consider noise or disruptions is non-billable work - or we would consider it part of the job.
And this is not even considering the number of Waiting Client voicemails we leave, which we feel bad charging them for, but yet, it is wasting our billable hours.
Tech Engagement/Disengagement
When Techs are meeting SLA expectations, it means that tickets are being engaged on in a timely fashion. It’s the tickets that are not being met in timely fashion that causes the loss of productivity.
If a Client Request is on pace to be completed in timely fashion,
No one follows up on them…
The Tech isn’t disrupted asking where are we at?
The Clients do not call in asking for updates (which wastes both the Service Coordinator and the Techs time).
Backlog List of Tickets (BLT):
Since the SLA performance report can be tricked or rigged to give a better than reality perception, we need the BLT report to be an honest reflection of what is really going on in terms of Client Experience.
We can blame the Client, Vendor, or Distributor all day long for not being a good partner and causing us to not meet Client Expectations, but that does not relieve us of meeting the needs or expectations in the Client’s eyes.
Not meeting those expectations is what drives the Client to look for another Service Provider. In their mind, it is our fault for not doing a better job.
The BLT report supersedes the SLA performance report and provides both the Service Coordinator and the Service Manager a safety net so as not to be fooled by a great SLA performance report.
The SLA clocks can be paused quite easily; the BTL report has no such pauses and shows the duration of the Client Experience to-date (200 hours to resolve a ticket? Get that Tech in my office!).
Triage:
For the Team to focus on meeting expectations, it takes the Service Coordinator to set the engagement plate in timely fashion. A good example is when Carol and I rolled out the Service Delivery Foundation Improvement program. We started at the intake process and worked our way through to the end of the Client Journey. Much to our surprise, once the Triage process is operating as expected, we found a majority of the rest of the Service Delivery performance issues go away.
We learned that if you want to optimize the Service Delivery operation, make sure all Client requests are being properly Triaged within SLA. SLA speaks to the responsiveness of the Service Delivery Team and is the beginning of proper Triage. Coupling this with a quality check is where a Service Manager needs to start their focus on improving profitability.
Service Manager focus on Growth:
As you should now know from reading our articles, the Service Managers #1 focus is profitability. The reason is they are the only ones in a position to drive Service Delivery Operational efficiency. With each 1% of efficiency comes room for growth – meaning either additional billable hours for more Managed Service Support or Professional Services Project work.
Unshackling an MSP from Service Delivery issues so they can grow takes a Service Manager focused on improved profitability and growth.
Owners Time:
In many MSPs, the Owner’s #1 responsibility is to “Go Sell Something.” However, if the other parts of the machine are not running properly, they focus too much time on Cashflow, micro-managing the Service Delivery Team, and apologizing to Clients for Service Delivery mistakes.
More than one Service Manager has complained to Advanced Global that the Owner is the problem and they stick their nose in the Service Manager’s business too much. Our response is that the only reason an Owner would micro-manage the Service Delivery Team is because they do not trust the Service Manager.
If a Service Manager feels the Owner is cramping their space, they should focus their energy on building trust and demonstrating they are capable of delivering.
To prove their worth, Service Managers need to:
Overcommunicate with the Owner where Service Delivery things are at.
Deliver on the SLA KPIs, as well as the other profitability KPIs.
Make sure the Clients trust the Team and call them first with complaints.
If the Team is operating efficiently and meeting all expectations, then they will be maximizing profitability, which results in improved Cash Flows, Less Client Complaints, and more Trust.
Summary/TLDR:
The best way to improve the bottom line is to look at the SLA report, determine why any one group of tickets are not flowing thru Triage, Tech Engagement, and Completion within a reasonable time period, and focus on the process - not the people - to improve the operational efficiency.
I hope that made sense to you. If it didn’t, please remember that I did warn that writing the SLA performance into profitability is an indirect connection. It’s why I say that it is often better explained in a conversation.
For that reason, I’ll get one of my Coaches on a free call to answer questions about this with any MSP manager who emails info@AGMSPCoaching.com in the next 7 days with the subject “SLA Performance.” Yes, your profitability is that important to me.
Talk to you soon.