Acronym Attack: How RHEM & MTTR Can Impact Your MSPs Bottom Line (and how did the Muppets get involved?)
Acronym Attack: How RHEM & MTTR Can Impact Your MSPs Bottom Line (and how did the Muppets get involved?)
Key Points in this Article:
Series summary: Bringing Growth to Your MSP
A Muppets Special
Say Hello to RHEM & MTTR
Get to Know RHEM
What is an Endpoint, anyway?
Meet & Greet MTTR
Stuck? Too busy? Overwhelmed? Help is here!
Welcome back to our next entry in our series on Bringing Growth to Your MSP in 2023. So far, I’ve shown you some quick wins to improve your Autotask and process efficiency.
Recently we went over the basic roadmap Advanced Global implements for Clients who fully engage with us (think of this as the “Standard Rich and Famous Contract” given to Kermit and Friends at the end of The Muppet Movie).
Yes, I really just referenced the Muppets. In “The Muppet Movie,” Kermit the Frog is hanging out in a swamp of an IT Provider. A vendor sees his talent and suggests he start his own MSP.
Inspired by the thought of making lots of Clients happy, this starts an adventure where Kermit meets some great friends (Miss Piggy, Dr. Teeth, Animal, etc.), but also comes oh so close to being turned into frog legs by Doc Hopper.
Ultimately, after some mishaps, the Muppets make it to Hollywood, get the “Standard Rich and Famous Contract,” and the MSP lives happily ever after.
All Kermit wanted to do was make lots of Clients happy with a Service Delivery Team living the profitable and fulfilling lives they deserved. Sound familiar?
The truth is, Doc Hopper often does get his frog legs, and many MSPs are hopping around on crutches (or worse). To avoid this, we aren’t settling for an out of the box Autotask and a Service Delivery Team that does things “their way.”
An optimized Autotask gets an MSP the data they need to implement advanced upgraded processes and provide awesome Superior Service Delivery. And what MSP doesn’t want that?
Hello, RHEM & MTTR
Today, I’m going to introduce you to RHEM and MTTR:
RHEM = Reactive Hours per Endpoint per Month
MTTR = Mean Time To Resolve
These little-known Key Performance Indicators (KPIs) in the MSP space provide huge returns. Managing them successfully goes straight to the bottom line. We will discuss them one at a time to avoid confusion.
We start with RHEM (Reactive Hours per Endpoint per Month):
I first heard of RHEM from Gary Pica of TruMethods fame. Most of his webinars in 2016 – 2018 (and maybe still today) centered around managing Client networks more efficiently so the profit margins on Managed Service support would be maximized.
The premise was that an MSP with a strong preventative maintenance program would result in far fewer incidents due to a very low amount of needed Break/Fix (reactive) work per seat/device and, therefore, bigger profit margins.
A side benefit of the preventative maintenance program is that regular maintenance visits would also uncover Professional Services (project) opportunities – to the tune of 30% of MRR.
The preventative maintenance program is also designed to deliver a complete Network Assessment over the course of a year and feed both Assessment and Project Opportunity information to the Account Manager (vCIO), which would be presented to the Client in QBRs for approval.
Trouble is, getting to RHEM data is very difficult and takes into account:
# of tickets for Managed Service Support
Total Worked Hours for Managed Service Support
# of Seats or Devices for Managed Service Clients' Managed Service Support only
Creating a list of tickets worked on for Managed Service Clients' contracts last month is not too difficult – a simple ticket search will produce the information, along with the Total worked hours worked. Unless, of course, you are using T&M contracts for both Managed Services and non-Managed Service Clients, then it is very hard to turn the data into information. In this case, make sure to have a Contract Category to call out when the T&M Contract is for Managed Services Client or a T&M Client.
What is difficult is agreeing on the # of Endpoints. An MSP is able to get device counts out of the RMM tool, but filtering down to what is an Endpoint takes work.
Here is Webroot’s definition of an endpoint:
“AN ENDPOINT IS ANY DEVICE THAT IS PHYSICALLY AN ENDPOINT ON A NETWORK. LAPTOPS, DESKTOPS, MOBILE PHONES, TABLETS, SERVERS, AND VIRTUAL ENVIRONMENTS CAN ALL BE CONSIDERED ENDPOINTS. WHEN ONE CONSIDERS A TRADITIONAL HOME ANTIVIRUS, THE ENDPOINT IS THE DESKTOP, LAPTOP, OR SMARTPHONE THAT THE ANTIVIRUS IS INSTALLED ON. “
Advanced Global’s Definition of an Endpoint
Building off Webroot's definition, Advanced Global defines an endpoint as any hardware item that's listed in Autotask configurations, including firewalls, routers, and switches.
We ignore monitors, keyboards, and mice because these are user interfaces of the Endpoint. However, we do include peripherals like printers, scanners, cameras, and PoS devices. We do not consider BYOD because they are not listed in either the RMM or Configuration Item list – even though, according to Webroot, they are an endpoint and most likely supported by the MSP.
Counting Seats is a very different conversation. If the Autotask AD integration is turned on or Rule-Based Billing is being used, the # of Seats is known.
However, there are still many unknowns, like:
How many are sharing one computer?
How many computers are spares?
Is a computer dedicated to a single user (or not)?
Because the Seat to Endpoint connection is murky, and an MSP maintains devices, not people, we have gravitated to only using device counts in our RHEM report over the years. YES, Advanced Global has an Advanced RHEM report.
For information on how to calculate RHEM, please go to this article: How to Learn the Entire Reactive Hours per Endpoint per Month (RHEM) Process. (agmspcoaching.com)
Both TruMethods and Advanced Global RHEM goals for our clients are between .20 and .25, but what does that mean?
It means # of Reactive Hours worked per Endpoint per Month is somewhere between:
1 hour for every 5 Endpoints (1/5=.20), or
1 hour for every 4 Endpoints (1/4=.25) per month.
While Gary's webinars in 2016-2018 talked about 1 hour of work for every Endpoint on average, we have not found an MSP performing at that level. Without a proactive program driving Service Delivery efficiency, the number is around .65 or 1 hour of work for every 1 ½ Endpoints.
Great, now what about the bottom line? .4 improvement does not seem to be that big of a deal. Well, .4 is 40%, and if you could drop the Cost of Managed Service Support by 40%, my guess is that is a huge number.
For example, if the MSP is doing $1MM per year in MRR, with a 70% profit margin, the Cost is $300K. 40% of $300K is $120K per year in improved bottom-line profit or would cover the Cost of another Tech with the same amount of profit, leading to another $312,000 in top line revenue of increased MRR or Professional Services without increasing Costs; which means the $312,000 is pure profit.
Hopefully that made sense. If not, make sure to reach out to me at info@agmspcoaching.com so we can get you the answers you are looking for.
Next up: MTTR (Mean Time To Resolve)
Our next 4-letter acronym is MTTR. I was introduced to the MTTR (Mean Time To Resolve) by Jeff Rumburg from a MetricNet article on the HDI website.
MTTR is as big to the Enterprise IT world as SLA is to an MSP. The difference is that it measures the Client experience instead of the MSPs' performance. This is important to an MSP because, as Adam V, one of my past supervisors, said, "the only thing the Client cares about is, when are you going to fix my stuff?"
If the Client only cares about when the engagement will be completed, then our pausing to wait on Client, Parts, or Vendor support is our problem, not theirs.
The MTTR report does more than keep us aware of the Client perspective: it also provides the Service Manager guidance on where to put their focus and training dollars.
The way to improve the MTTR is to look at the MTTR by Sub-Issue. Focusing on improving the Sub-Issue’ Service Delivery process that takes the longest to resolve will bring down the overall MTTR.
By looking at an MTTR by Resource report, you can compare the MTTR across the Team to determine:
Who is doing unbelievably well at resolving the issue and completing the engagement
Who is struggling
Once this is known, have the high performing Tech lead a Lunch ‘n Learn for the rest of the Techs, talking about his mindset, approach, and the shortcuts they use when engaging on these types of Sub-Issues.
For the struggling Tech, meet with them 1on1 and discuss challenges, training, and careers.
In the meantime, have the Service Coordinator steer Client Requests from the struggling to the high-performing Techs.
For more information on how to use the MTTR report, check out this article: How improving Mean Time to Resolve (MTTR) increases Bottom Line (agmspcoaching.com)
Again, I hope that made sense. Reach out to info@agmspcoaching.com with questions on RHEM or MTTR.
So, what if you’re stuck in the swamp like Kermit or too busy (or overwhelmed) - and just want someone else to write Autotask reports for you? We got your back.
For help Finding, Benchmarking, Analyzing, Tracking, and Leveraging the Data, Advanced Global is here to help. About 3 billable hours for an Express Report or less than 7 billable hours for an Advanced Standard Report**, Advanced Global will:
1) Write the report for you in your database
2) Schedule the report to run automatically, and publish the report so you can run it on the fly
3) Guide you on how to analyze and leverage the report
**Advanced Standard Reports like:
1) Resource Utilization report date stamped on Monday morning
2) Real-Time Time Entry report date stamped on Monday morning
3) Backlog List of Tickets report delivered on Wednesday morning
4) Scheduled Tickets with no future Service Calls delivered on Thursday morning
5) SLA, Workflow Distribution, and Mean Time To Resolve, all delivered on the first Tuesday of every month
6) Daily QC reports for Triage and Open/Assigned/Closed reports
7) MTTR
8) RHEM
9) Labor Profitability Report by Client
If interested, email us at that magic address: Info@AGMSPCoaching.com, and help will be on the way.
Steve & Co
The elephant in the room:
Who is Advanced Global, and why should we listen to them?
Recently someone we've been in communication with since DattoCon 2018, who was faithfully reading our articles, commented that up until a few months ago, "I really did not know what Advanced Global does." So here are a few bullet points to let anyone interested know who we are and what we do:
1) We Are – the Autotask Global Service Delivery Authority
2) We Help – MSPs thrive
3) We Solve – Service Delivery issues, inefficiencies, and challenges by making sure:
a. techs know what to work on next
b. someone is managing all open tickets and driving them to completion
c. the staffing levels are correct, and the workload is balanced
d. Real-Time Time Entry is a cultural habit
e. the Client has a great client experience
f. profit is maximized
g. Autotask is being fully leveraged
h. the historical data that is in the Autotask software is accessible to benchmark, track & USE effectively
i. the Service Delivery operations can scale
j. projects are completed On-Time and On-Budget
k. the company can grow
l. MSPs know what they don't know
4) Our Tools:
a. Autotask "Best in Class" standard build
b. Our MSP robust Service Delivery SOP library
c. Advanced Autotask Live Reports
d. Expertise in providing a transformational educational experience
Note: We are not philosophers; we are doers with 31+ years of Service Delivery experience, bringing real Service Delivery Improvement change, profitability, and Best in Class performance.