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Robin Robins Producers Club, Feb. 2016
- 2. This is the presentation formerly known as ”Killer Documentation Will Set You Free” --Chris Day, CEO, IT Glue
- 3. • 2002 – Founded MSP Fully Managed • 2008 – 10 Employees • 2016 – 60 Employees • EBITDA from 5% to 25%. Why? MY MSP STORY
- 4. THE IT GLUE STORY • Founded in 2013 • 1,000+ Partners • 15,000+ IT Pros • 25 Employees • 17 Countries, 6 Continents
- 6. The first company in any industry that fully embraces the LEAN methodology will dominate their industry over the long run. LEAN BUSINESS MANAGEMENT
- 7. --Eric Ligman, Director, Worldwide Partner Group, Microsoft WASTE IN I.T.
- 8. The first and foremost reason for documenting any process is the fact that it… AMBIGUITY IS (NOT) AWESOME reduces operational ambiguity. --Management Study Guide
- 9. “the knowledge worker spends about 2.5 hours per day or roughly 30% of the workday, searching for information” KNOWLEDGE WORKER STUDY
- 11. What makes a best-in-class MSP? …and what does best-in-class really mean anyway?
- 12. Revenue $2,000,000 100% COGS Gross Profit SG&A Net Income COMPANY “A” VS. COMPANY “B”
- 13. 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!
- 14. 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!
- 16. Process People Technology 3 AXES OF EXCELLENCE
- 17. Process People Technology 3 AXES OF EXCELLENCE
- 18. People don't buy what you do; they buy why you do it. –Simon Sinek PEOPLE
- 19. Process People Technology 3 AXES OF EXCELLENCE
- 20. TECHNOLOGY
- 21. Process People Technology 3 AXES OF EXCELLENCE
- 22. PROCESS PAYS Reduce your costs Increase your margins Improve your service Reduce your risk
- 23. COST OF BAD DOCUMENTATION Team Size Technical /Staff 5 Average Annual Salary For All Employees $60,000 Average Hourly Labor Rate Fully Burdened + 15%, Rounded Down $43/Hour Time Wasted Due to Bad Documentation Experts 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 Cost Based 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)
- 24. IMPACT OF TIME VARIANCE Sample Tickets 1. Setup New User Account 2. Troubleshoot a Slow Computer 3. Deploy a New Workstation Estimated # Transactions Annually Based on 50 Customers, Avg. 20 Staff (1000 Users/Endpoints) 300 Transactions Estimated Hours Per Transaction Total 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 Documentation High - Low $19,350 Wow!
- 25. IMPACT OF LABOR COSTS Sample Tickets 1. Setup a New Complex User/Workstation 2. Deploy a Switch, Firewall or Backup Device Estimated # Transactions Annually Based on 50 Customers, Avg. 20 Staff (1000 Users/Endpoints) 250 Transactions Estimated Hours Per Transaction Total Labor Required for Each Transaction 2.0 Hours Range of Labor Costs Per Hour Variance 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 Potential Savings w/ Good Documentation High - Low $21,500 Wow!
- 26. COST OF A NEW HIRE New Hire Efficiency Time & Cost of a New Employee Efficiency of New Hire Due to Bad Documentation Based on $60,000 Fully Burdened Salary, Level 2 Engineer 80% @ 4 Weeks to 80% @ 10 Weeks Hours Wasted Due to Bad Documentation Time Spent Training, Researching, “Shoulder-Tapping” 98 to 272 Setup Cost for New Employee Hours Wasted x Hourly Cost ($43/Hour) + Opportunity Cost $12,642 to $35,088 Potential Savings w/ Good Documentation High - Low $22,446 Wow!
- 27. ANNUAL SAVINGS (3 EXAMPLES) Area of Waste Potential Annual Savings (1,000 Endpoint MSP) Time Variance Variance in Time Required for Common Tasks $19,350 Labor Costs Tasks Requiring Level 1 vs. Level 2 vs. Level 3 Engineer $21,500 New Hire / X-Training Assuming Single New Hire @ $60K Salary $22,446 Potential Savings w/ Good Documentation High - Low $63,296 Wow!
- 28. THANK YOU!