Simply the Best (Practices): Lifting the Fog of Autotask Contract Configurations: The MSA
Welcome back Autotask Warriors! Let’s get right into what we’re covering today:
Are you noticing these gains at your MSP?
Confusion Surrounds the Network Administration Visit
What’s included in the IT Managed Service Agreement?
IT Service Managers: Here’s Your 5-Step Solution
The 5-Step Solution Challenge: So Worth It!
About the “All-In” MSA
Setup Your Invoicing: General recommendations
The secret code to get help ASAP
“Life is like a box of chocolates: you never know what you are going to get.” Remember that infamous line from Forrest Gump?
I think we can all agree this is an accurate statement in both life and in running an MSP. So, I’m glad you are here, and I hope this week you can sneak one of the “good” chocolates out of the box.
As I have mentioned before, if you’ve been following along and implementing what we’ve discussed, you should be seeing noticeable gains in several key areas at your MSP:
Productivity
Client satisfaction
Tech happiness
Profits
Simply put, you should be “simply the best.” (I promise the Tina Turner references will end soon). If you are not, PLEASE DO NOT DELAY in emailing Info@AGMSPCoaching.com with this week’s secret code word “Chocolate HELP” in the subject line, and we will give you some free help, just for being a reader of this column.
Of course, I can’t expect you to be rocking contracts, if I give you half of the puzzle (first article), then when I follow up, still neglect that some of you may have issues adding your contracts into Autotask because you are unsure what should be in them.
This, of course, contributes to the “fog of war” that I’ve been trying to help you with (sorry!). As a reminder,
In Part I, we reminisced about the late, great Tina Turner and covered Streamlining Labor Invoicing.
In Part II, we covered Recurring Service Contracts, including Licenses, Subscriptions, and HaaS.
Part III will be the completion of last week’s discussion.
But based on questions we’re hearing from conferences like the CompTIA Channel Con Conference we attended recently, it seems like a version 2.75 is in order first.
That’s why this week, we’re going to do a brief overview of What you need to know about the IT Managed Service Agreement.
Why is this so important? Well, there have been several times when I have run into a disconnect between what Sales is selling and what IT Support is supporting. I’m sure you can relate. For example, when joining Systems Engineering, they had seven managed service offerings. There was some confusion between what was in the Signed Agreements and the Service Support.
Confusion Surrounding the Network Administration Visit
The biggest confusion was on the sales side of the house. The confusion was over what was included in a Network Administration visit:
Executive Management wanted the visits to include the Network Administration checklist only. Specifically, all sales – including PC installs – were to be excluded.
The Account Managers pushed back and pointed to the Signed Agreements which included the phrase “And all other work requested by the Customer which fits within the Network Administration visit” (or something to that effect, this is not an exact quote).
Even in one of the MSP-Ignite Service Managers Peer Group monthly meetings, the discussion of what is included in an “All-In Managed Service Agreement” was brought up. Once again, the conversation revolved around PC installs.
IT Managed Service Agreements: What’s Included?
So, if the Sales side of the house can’t agree on what is included (or not) in the Services Offerings, how can the IT Service Delivery/Support side get it right? Moreover, why does this matter?
Without crystal clear definitions (communicated in simple terms) of what is covered by Contract or what is T&M, it will never be right:
In the case of T&M, the Managed Service Provider (MSP) is giving away profit.
In the case of Contract, the true profitability and value of the offering is understated.
It has been pointed out to me that this lack of billing or providing more value than paid for can be trued up in Quarterly Business Review (QBRs) with the Customer.
While this may be true, it is still bad data from an accounting perspective. How much of a problem is this? Besides the confusion, discussions, and Customer/Account Manager pushbacks causing inefficiencies in the IT Support workflows, I have seen it represent up to 20% of the Managed Services revenue.
IT Service Managers: Here’s Your 5-Step Solution
Let’s cover a 5-step solution you can implement to set the stage for greater success moving forward:
The IT Service Manager needs to sit down with the Sales Manager and review the agreements so there is a clear understanding of what services are being offered, in general.
The IT Service Manager and Sales Manager together need to create a list of Customer Agreement one-offs.
Create a simple presentation (Excel Services Grid, PowerPoint presentation, etc.) to distribute to everyone in the Company.
Services need to be added to the Customer Contracts in the PSA tool, so that the intake personnel and Technicians can quickly review what Services are available for that Customer and update the Ticket accordingly.
The IT Service Manager needs to monitor Ticket quality, looking for coaching opportunities, to prevent profit loss, or to see if they are understating the value of the Managed Services Agreements.
Sounds easy enough…right?
Not so fast.
How does a 20% Managed Services Agreement value increase sound?
Even in small shops, experience has shown me that these five simple steps are not all that easy. Here’s why...
There are months of back and forth between Sales and Service before the general services offering is defined.
Add another month before it is simplified and ready to present to every Employee.
Plus a few more weeks to change the configurations in the PSA tool.
And finally – you’re looking at another six months of coaching and monitoring before the new habits take place and profit increases.
A 20% Managed Services Agreement value increase of T&M profit is awesome, but keep in mind, it also increases the profitability of the Managed Services Agreements. So, the five steps – while challenging - are well worth the time, effort, and initiative.
When it comes to the “All-In” Managed Service Agreement…
For the most part, Installations and Projects are outside the scope of the agreement. One creative way to include Installs and Projects within the “All-In” agreements is with Hardware as a Service (HaaS) offering. More than one MSP we know is offering HaaS. How it plays out is that in addition to Managed Services support, the Customer is assured:
PC refreshes on a regular basis (typically every 3 years)
Network refreshes a year before the devices go End of Life (EoL)
This allows the Managed Service Provider to predict when the Installs and Projects will hit, include the labor cost in the agreement, and adjust staffing levels to meet the need.
To the benefit of the Customer, it takes these large capital expenditures and converts them to small operating budget costs. By the way…it also makes the Customer very sticky - even in these times when they can jump from cloud service to cloud service with a click of a button.
Once you have all that sorted out, you can build the contracts in Autotask, either a Recurring Services Contract, Time & Material Contract, Fixed Price Contract, Block Hour Contract, or Retainer Contract.
Then setup the invoicing and away you go:
Two Invoices per month:
Licenses and Subscriptions on the 20th of the month in advance
1 Recurring Service Contract
Pax 8 and/or Sherweb Licenses
Rule Base Billing
Per User
Per Device
Hardware and Labor the 1st of the month in arears
Hardware Charges
Labor T&M or Fixed Price Contracts
Primary Contract (Items covered by MSA agreement)
Secondary Contracts (If not invoiced at the Standard Role Rate)
Of course, those are just general recommendations. If you’d like recommendations tailored to your unique MSP and your Clients, e-mail Info@AGMSPCoaching.com with that secret code word of the week, “Chocolate HELP” in the subject line, and we will give you some free help, just for being a reader of this column.
Or, consider attending our free weekly “Ask the Experts” Webex for any help you may need (See AGMSPCoaching.com for meeting times/links).
“If there’s anything you need, I won’t be far away.” – Forrest Gump
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:
We Are – the Autotask Global Service Delivery Authority
We Help – MSPs thrive
We Solve – Service Delivery issues, inefficiencies, and challenges by making sure:
techs know what to work on next
someone is managing all open tickets and driving them to completion
the staffing levels are correct, and the workload is balanced
Real-Time Time Entry is a cultural habit
the Client has a great client experience
profit is maximized
Autotask is being fully leveraged
the historical data that is in the Autotask software is accessible to benchmark, track & USE effectively
the Service Delivery operations can scale
projects are completed On-Time and On-Budget
the company can grow
MSPs know what they don’t know
Our Tools:
Autotask “Best in Class” standard build
Our MSP robust Service Delivery SOP library
Advanced Live Reports
Expertise in providing a transformational 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.
We start our engagements by offering a FREE No-Obligation PSA Configuration Evaluation