ASCII - Anaheim, CA - Mar. 2016

www.itglue.com/ascii

How Success and Peace of Mind Starts with Great Documentation

MY MSP STORY

• 2002 – Founded MSP Fully Managed

• 2008 – 10 Employees• 2016 – 60 Employees• EBITDA from 5% to 25%. Why?

THE IT GLUE STORY

•Founded in 2013•1,000+ Partners•15,000+ IT Pros•25 Employees•17 Countries, 6 Continents

www.itglue.com/why

The first company in any industry that fully embraces the LEAN methodology will dominate their industry over the long run.

LEAN BUSINESS MANAGEMENT

--Eric Ligman, Director, Worldwide Partner Group, Microsoft

WASTE IN I.T.


The first and foremost reason for documenting any process is the fact that it…

AMBIGUITY IS (NOT) AWESOME

reduces operational ambiguity.--Management Study Guide

“Wasted time costs $19,732 per worker per year, a loss of 21.3% in the organization’s total

productivity”

INFORMATION WORKER STUDY

What the actual &$%^?

What makes a best-in-class MSP?

…and what does best-in-class really mean anyway?

Revenue $2,000,000 100%

COGS

Gross Profit

SG&A

Net Income

COMPANY “A” VS. COMPANY “B”

COMPANY “A”

Revenue $2,000,000 100%

COGS $700,000 35%

Gross Profit $1,300,000 65%

SG&A $800,000 40%

Net Income $500,000 25%

BOOM!

COMPANY “B”

Revenue $2,000,000 100%

COGS $1,200,000 60%

Gross Profit $800,000 40%

SG&A $800,000 40%

Net Income $0 0%

FAIL!

Building abest-in-class MSP.

#LetsGo

Process

People

3 AXES OF EXCELLENCE

People don't buy what you do; they buy why you do it.

–Simon Sinek

PEOPLE

Process

People


TECHNOLOGY

The Stack

Network Servers Workstations Applications Backup Security Governance


Process

People


PROCESS PAYS

Reduce your costsIncrease your marginsImprove your serviceReduce your risk

COST OF BAD DOCUMENTATION

Team SizeTechnical /Staff

5

Average Annual SalaryFor All Employees

$60,000

Average Hourly Labor RateFully Burdened + 15%, Rounded Down

$43/Hour

Time Wasted Due to Bad DocumentationExperts Estimate @ 20-30%

20% / 10% / 5% (high/medium/low)

Monthly Cost of Time Waste(Number of Tech Staff) x (1 Week Labor) x (Time Wasted)

$6,880 / $3,440 / $1,720 (high/medium/low)

Monthly Opportunity CostBased on 50% GM = (Monthly Cost of Time Waste) x 2

$13,760 / $6,880 / $3,440 (high/medium/low)

Total Monthly Cost of Bad Documentation(Monthly Cost of Time Waste) + (Monthly Opportunity Cost)

$20,640 / $10,320 / $5,160 (high/medium/low)

Total Annual Cost of Bad Documentation(Monthly Cost of Time Waste) x 12

$247,680 / $123,840 / $61,920 (high/medium/low)


IMPACT OF TIME VARIANCE

Sample Tickets 1. Setup New User Account2. Troubleshoot a Slow Computer3. Deploy a New Workstation

Estimated # Transactions AnnuallyBased on 50 Customers, Avg. 20 Staff (1000 Users/Endpoints)

300 Transactions

Estimated Hours Per TransactionTotal Labor Required for Each Transaction

0.5 to 2.0 Hours

Total Annual Cost (All Transactions) # Transactions x Time x Hourly Cost ($43/Hour)

$6,450 to $25,800

Potential Savings w/ Good DocumentationHigh - Low

$19,350 Wow!


IMPACT OF LABOR COSTS

Sample Tickets 1. Setup a New Complex User/Workstation2. Deploy a Switch, Firewall or Backup Device

Estimated # Transactions AnnuallyBased on 50 Customers, Avg. 20 Staff (1000 Users/Endpoints)

250 Transactions

Estimated Hours Per TransactionTotal Labor Required for Each Transaction

2.0 Hours

Range of Labor Costs Per HourVariance from $35,000 to $95,000 + Overhead

$25/hour to $68/hour

Total Annual Cost (All Transactions) # Transactions x Time x Hourly Cost

$12,500 to $34,000


$21,500 Wow!


COST OF A NEW HIRE

New Hire Efficiency Time & Cost of a New Employee

Efficiency of New Hire Due to Bad DocumentationBased on $60,000 Fully Burdened Salary, Level 2 Engineer

80% @ 4 Weeks to 80% @ 10 Weeks

Hours Wasted Due to Bad DocumentationTime Spent Training, Researching, “Shoulder-Tapping”

98 to 272

Setup Cost for New EmployeeHours Wasted x Hourly Cost ($43/Hour) + Opportunity Cost

$12,642 to $35,088


$22,446 Wow!


ANNUAL SAVINGS (3 EXAMPLES)

Area of Waste Potential Annual Savings(1,000 Endpoint MSP)

Time VarianceVariance in Time Required for Common Tasks

$19,350

Labor CostsTasks Requiring Level 1 vs. Level 2 vs. Level 3 Engineer

$21,500

New Hire / X-TrainingAssuming Single New Hire @ $60K Salary

$22,446


$63,296 Wow!


PROCESS IN ACTION


ASCII - Anaheim, CA - Mar. 2016

Technology

Transcript of ASCII - Anaheim, CA - Mar. 2016