IT is not a technology cost, it’s a human resource cost!
This is a fundamental concept MSPs need to keep in mind when they are looking at their businesses, but one many smaller MSPs tend to overlook.
Think about it; for every business you’re supporting as an MSP, you’re doing so to ensure their IT infrastructure has stability of operation and is optimized to maximize staff productivity. If employees are productive, the expectation is that they’re generating the level of revenue per hour they need to in order to be profitable. It’s possible that by creating a stable IT environment, you’re actually making them even more productive.
Managing customers is a human resource cost
This same principle also works within your MSP business. You need to look at your customer management as a human resource cost. If you keep using humans, they cost more, take more time, and make more mistakes. This doesn’t mean you need to eliminate people from your business—far from it. Instead, you need to look at how you can augment what your people are doing in order to get more out of them. And automation through technology is the way to do that.
While this might make sense to you as a business owner, you could still be wondering where to start. We’ve written a lot about where to start with automation, but most of this focuses on the technology side, and I want to frame that more from a business perspective.
Often, the number one cost to many businesses is human capital. And the two biggest costs centers for this as an MSP are going to be your network operations center (NOC) and your help, or service, desk. Most of the activity in your NOC is going to be controlled costs, which are largely predictable—you know when you’re going to perform an activity or when you’re going to do maintenance in the environment.
This is not the case with your help desk.
If you’re starting automation, focus on your help desk
Driven by reactive support requests, your help desk is always going to be a variable cost—you don’t know when a request is going to come in and you don’t know what the problem is going to be. So the more you can put automation around reactive issues, the better. Requests, like I can’t print, my computer’s running slow, I can’t connect to the internet, my VPN is gone, or I need to change my password, come through help desks all the time. The reality is that a human isn’t always necessary to troubleshoot these issues.
All of these common calls should have an automation policy to reduce your human capital costs. As your business starts to grow, these costs are only going to increase and your human capital costs are going to escalate, which is something that could seriously impact your profitability.
Automation doesn’t mean charging less
When you do implement automation, don’t fall into the trap of charging less. The expectation of the end user is that their problem is fixed. They don’t really care how long it took you. So charge them as though you were doing it somewhat manually.
The analogy I use when I’m talking to partners is this: when you go to the dentist for a cleaning, it’s $250 whether it takes them 15 or 35 minutes to complete the job. And most of us, just want out of that chair. Personally, I would prefer 15 minutes as a dentist. The same thing can be said for IT. Users don’t like not being able to do what they want—it frustrates them, and they just want their computer to be up and running again. They don’t care whether automation or one of your techs fixed it, just that it’s fixed. For some MSPs, this requires a shift in mindset, but it shouldn’t—which is something the more mature MSP businesses understand.
So if you haven’t started to think about implementing automation in your business, but you do want to scale your business—if not now, then in the future—it’s time to take that first step.
If you need inspiration and help getting started, check out some of our automation blogs. If you’re already one of our partners, check out our Automation Cookbook, which includes a host of automation scripts you can apply immediately to your business—and it’s being updated all the time. On top of this, you can sign up for one of our automation boot camps.
David Weeks is senior director of partner experience at N-able