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After Hours Support – What Is Expected Of Your Team

Like any other service-based industry, an MSP is only as good as its people. Yes, tools are important, but unless you plan on hiring robots and AI to do all your support, people will be your special sauce that your customers will appreciate.

 

Having had an MSP since 2000, I am especially aware that finding the right staff is far from fun. When we think we have found the right person, we add them to our team, and if all goes well after a few months, things are in synergy. Sounds easy, we can just keep doing it to scale. But the truth is that sometimes adding one new person triggers others to leave, so it’s a delicate balancing act. For those who don’t consider the importance of team building and getting the right balance, this will just sound like hot air.

 

Through the years, we looked at many ways to try and ensure we had the right balance. About six years ago, we started to use DISC profiles, which was a different step in the right direction. And this approach only improved when we came across an online DISC tool that took it one step further by showing how your current team would adapt with the new candidate even before they started! Yes, you might say that’s not possible, but from my previous experience, it was more accurate than anyone would want to believe.

 

So, once we have our service team up and running, we need to be clear what the after-hours expectations are. We also need to be mindful that these expectations are aligned with a WIN-WIN outcome.

 

This is very relevant to after-hours support. IT is one of the industries that everyone expects it to always work. People nowadays depend less on IT support thanks to the migration to the cloud, but most MSPs will be offering some level of after-hours support for their customers. What this support looks like, and how its achieved is unfortunately quite often left as an afterthought, though after we have “sold” this to our prospective customers, we hope the chances of them needing it are very, very low.

 

When the time does come—and we all know it will come when we are least prepared— is our team available to help the customer? How do we expect the customer to contact us? Do they call the normal support number, or is there another after-hours support number? Or would you allow customers to send critical requests via email? And if so, would they expect to be able to do the same after hours?

 

With support issues being logged via email, I don’t know of many MSPs that treat emails sent from their customers as a high priority. The email technology was never one designed to be dependable as high priority/urgent. The only type of MSPs I have spoken to that allow this practice are small MSPs, generally with less than five employees.

 

Put yourself into the same position as a consumer because, at the end of the day, we are all consumers. Would you want to email your electric company and tell them that you lost electricity? Do you think this email would be treated as a high priority or get lost among hundreds of others? Even if it returned an auto-acknowledgment email, would it make you feel like, “Great! they know I am in the dark, I am sure someone is looking into it”? or would you pick up the phone and call them to make sure it is being looked into?  Will they even accept a critical issue like that via email?

If you do allow customers to log important/high priority requests just via email, what happens after hours? Do you expect your “on-call” tech to listen out for a notification on their mobile and look at their phone every 10 minutes? Would you fire your on-call tech if they didn’t see an email at 7 p.m. on Saturday, or 3 a.m. on Sunday? if you would not fire them, what is the expectation? If you would fire them over this shortcoming, then expect to pay them and be very specific as to their requirements. Otherwise, it becomes the broken-window theory.

 

Some MSPs who don’t have the size to justify having a 24×7 service desk use an outsourced model to provide coverage outside of business hours. Just keep in mind, that this can work, but you will need to ensure your documentation is very well done; otherwise, you are throwing away money believing that they can be there when your team is offline.

 

It may, to some, seem like an easy task to put together and offer the service of after-hours support. However, as we have seen, it is extremely important to think through the entire model, requirements, procedures, both internal and external expectations of 24-hour support. It can be a critical and unexpected element that makes or breaks the customer relationship you have fostered and built. In a single occurrence, you can lose a loyal customer due to the lack of preparedness that comes with the seemingly simple offering 24-hour support. 

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Invoicing Pains and Labor Costs

In a business environment that is increasingly moving toward a XaaS model, MSPs are caught in the middle. On one hand, most of what we offer or recommend to our customers use the subscription model. Yet, our biggest asset for our business is still a fixed cost. Although staff labor is our biggest cost, the good news is that it is also our biggest asset.

I hear many MSPs dread the monthly activity of invoicing their customers, and the funny thing is that most of these MSPs just have a few line items to invoice each month per customer. There are the expected software licenses that they on-sell, such as Office 365, backup, and AV, and in some cases, they offer Hardware As A Service (HaaS). When it comes to labor, a high majority of MSPs are now invoicing a fixed cost either per-user or per-device monthly—so it is definitely easier than it was a few years ago. For many MSPs, moving to a flat rate, that is, an all-inclusive offering to their customers, was just as much about simplifying their invoicing process and reduce the bleeding of never-invoiced services as it was about having a predictable monthly income stream.

So why then do they dread invoicing so much? Speaking to some MSPs, I was able to uncover the pain point. It is because they need to check each of their customers and ensure that the customer’s active subscriptions are actually being charged to the customer. Had one of their customers employed a new person, and with that, one of the MSPs techs had added a new Office365 license? Did one of their techs install the backup agent on a new laptop that someone uses at home?

There are many occasions in a normal month that this issue can and will happen. Although several tools are available for MSPs that can make this easier, I am yet to see one that covers the vast range of subscriptions that MSPs offer their customers. Also, many vendors have their own portals that provide this and much more information, but that still means that someone must go into each vendor’s portal and find the data. The good news is that many vendors provide more than just the monthly usage and invoicing data. Some go much further and show other tools or offers that will complement each customer’s current subscription, providing upselling opportunities for the MSP. 

The pain is still there for the MSP though, margins for subscriptions resold by an MSP are generally quite low – unlike the margins we were seeing when selling infrastructures like a VM Cluster or a SAN. Yes, gone are those days. This means if they only under invoice one customer just one license for one month, the MSP could see that loss to be equal to the profit for all the other licenses for that customer for that period. So, it’s quite important that the subscriptions are reconciled for each customer and ensure they are invoicing the correct amount of subscriptions. 

So, what does this have to do with your staff? When was the last time an MSP owner, or for a larger MSP, a Service Manager reconciled their labor force? I am being serious here, it sounds stupid; yet, MSPs put more time and effort into ensuring they are not short-changed on resold licensing than they do on their staff.

I will put it another way, as I have found that most people don’t consider this. You are buying 160 hours of each of your staff’s time each month—shouldn’t we care enough about this cost to reconcile it? Should we not check to see that we really needed 160 hours, not 120? The scary reality is that most MSPs either don’t measure their team’s utilization or if they do measure it, they accept it as it is. The industry average is between 60%–70% utilization, so in other words, we are buying between 48 and 64 hours more than we are using to do tech work each month and that’s per tech! This is strongly linked to a frightening percentage of MSPs (i.e., well into the double digits) that have a negative cash flow. The reason for this is not that they are not selling enough Office 365 licenses or their PSA costs $85/month per technician; it’s because they are not aware of their data, or just as bad, they don’t know what to do about it. 

So, let’s do some quick comparisons of an average MSP tech compared to their reselling of software licensing. Again, I will use Office 365 as the most common one sold by MSPs. 

The average MSP has the tech to endpoint ration of between 120 and 180, meaning for each technician they have in their labor force, they have between 120 and 180 endpoints they manage. So, an MSP of 10 techs will service between 1,200 and 1,800 endpoints. We are disregarding the number of customers here as that doesn’t really impact the metrics.

I will pick the middle of the road here—a ratio of 1:150. This equates to an approximate monthly profit of $500 for the Office 365 licenses sold to these 150 endpoints that this single tech can service.

If we now use this same MSPs, and they were to accurately measure the true utilization of their techs, they will find it is going to be around 60%. Most MSPs believe it’s around 70%, but if they remove the double-time the techs earn as they have multiple tickets open at once or the rounding up of tickets, they will see that the number drops. Now to put that into perspective, what does this shortcoming cost the MSP? The difference between utilization of 80% and 60% is costing the MSP $960 per tech per month! 

Why does this happen, why do we constantly see MSPs not take these metrics into consideration and act on them? Would the business owner think any differently if each week they got a bill from each of their team that states 160 hours x $xxx?  Is it too hard to reconcile their hours, most probably, weekly? Is it because they feel they are not in a position to fire their techs if they are actually under preforming by that much? Or, is it because the perceived profit per technician is so high, that they believe it’s not an issue?  I am sure some business owners think of it this way. 

When I had this conversation with MSPs, I was asked if I had considered using freelancer techs in my MSP and whether that was something I am suggesting. This is definitely not what I would consider for many reasons. I have used freelancers before for other roles, such as graphic design or marketing strategy, but not tech. Although we employed hourly staff at our service desk for Tier 1. We were able to have extra staff on Monday and Tuesday mornings where we had an extra influx of calls and tickets. These were generally university students enrolled in IT courses. Getting the feet wet in the industry helped them while it helped us manage the peak service levels in a cost-effective manner. 

Like many of my posts, the issue that I raise is not new. It is something that the majority of MSPs face nowadays but are either ignoring it or not aware of it. The COVID-19 pandemic has really brought some of these issues to light. The MSPs that didn’t have insight into their service operations are the ones that felt the most pain. I am aware that trying to obtain this information is not easy in most PSAs, and the value of the data is only as useful as to the integrity of the data. If your team is rounding up their time, or if they are entering their timesheets at the end of the day—sorry but whatever you think your utilization is—it is not.

In our MSP, we found that this practice was key for increasing our profit margins and having the extra money to spend improving our business. It was one of the main factors that drew me to the conclusion that untimely was the start of building ServiceTree.

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Business Operations Business Practices MSP Technology

Do you have a broken window in your MSP? Are you sure?

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Business Operations Business Practices MSP Technology

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Company News MSP Technology

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