8 MSP Experts Offer Insight into Why Other MPSs Should Use KPI Scorecards


8 MSP Experts Offer Insight into Why Other MPSs Should Use KPI Scorecards

By Contributing Writer
Stuart R. Crawford

Key Performance Indicators (KPIs) are used to help MSPs effectively manage and guide their progress. The concept of Key Performance Indicators and a KPI scorecard is to align performance with long-term strategic objectives. Like a navigation tool, Key Performance Indicators help MSPs determine if they are moving in the right direction.

KPI scorecards are a solution that allows MSPs to manage their business performance by connecting operations with strategies. KPI scorecards monitor the implementation of strategic objectives at each level and ensure a thorough understanding at all levels of the MSP business's priorities and expectations.

We've all heard the saying, "What gets measured gets done". This means frequent measurement and reporting keeps you focused because that information is used to help you to make better decisions. Recently, I talked to experts in the MSP industry to really dig deep into the topic of KPI scorecards and why MSPs should be using them.

These experts take us on a journey through why KPI scorecards should be used and the ways in which KPI scorecards have impacted and will continue to impact the industry.

Aaron Kane | Chief Executive Officer | CTI Technology:

"A business has 40+ indicators on whether the company is performing well or not. These indicators can be overwhelming and a distraction from the real issue. KPIs are specific and measurable metrics that have a proven impact on one's business or business department. Aligning these KPIs into one dashboard with 6-10 indicators allows leaders to focus on what matters most. Should a KPI begin to fail, it's easier to react and pivot accordingly.

Some KPIs CTI Technology focuses on are Service Gross Margin, which can identify deficiencies, and employee utilization rates, which can detect burnout or overworked employees. A single dashboard with your key 6-10 KPIs will let you lead from the front and become more agile in changing conditions."

Anthony Buonaspina, BSEE, BSCS, CPACC | CEO and Founder | LI Tech Advisors:

"LI Tech Advisors utilizes a unique set of KPI scorecards to graphically display our indicators based on data pulled from our back-end systems as well as data that our support staff supplies that is more qualitative than quantitative about customer experiences. Customer service has always been our top priority and our KPIs are designed and utilized to regulate our responses and recommendations to clients.

These KPI scorecards allow us to negotiate mutually beneficial service agreements with our clients and help fortify relationships with clients and sometimes, where indicated, will off-board clients that underutilize services we recommend and require to maintain an adequate level of cybersecurity protection.  The primary KPI we utilize is called our "Time and Profitability Matrix" (TPM). The data that feeds this matrix is garnered from other KPI sources such as client rating, W2 ratio, and others. 

The bottom line is that we now know and can rate clients based on their utilization of our support services, allowing us to adjust their agreements accordingly that best benefit both the client and my company. The typical adjustments we have been recommending focus around adding additional services enhancing cybersecurity, especially with the continuous rise in cyber-attacks. Most MSPs; however, suffer from what we call in this industry a "race to the bottom", where more and more services are expected from the MSP but for the same agreement price or many times even less.

Also, one bad client can sink the entire ship, so it's important to monitor not just client satisfaction and agreement levels, but garner feedback from our support team and our KPI metrics.  Utilizing our TPM, we are able to adjust our agreements accordingly with great accuracy since our matrix gives us data down to the hour utilized and also allows us to either throttle low-performance clients or eliminate them if necessary. We would rather lose 5 bad clients that don't follow our advice than 1 good one and our TPM KPI allows us to approach these bad clients and make adjustments in our agreements with them and if they are unwilling to accommodate the recommended changes we recommend, then we will off-board them as a client."

Brandon Miller | CFO/COO | The Miller Group:

"How do you make decisions without clear data to back up decisions both big and small? How do you know if an attempted change in process or procedure is leading to an efficiency improvement?

All of these things can be answered with the use of KPIs across any organization, size, or industry. Every department should have those 4-5 numbers that they track, monitor, and put forth plans to improve. Those individual department numbers should support an additional 3-4 numbers the company as a whole is working towards achieving. Only in this way can you ensure each department is working towards the company initiatives and transparent communication/direction is being given across the employee base in order to build a culture of progress and improvement.

Our experience: We have been continuing to define and implement KPIs over the last 4+ years. We started with our largest department, support, and worked on tracking response time, the number of tickets closed, and the total amount of hours towards a client. After tracking it on a monthly basis, we brought it to a weekly basis and then expanded upon the number of KPIs we are tracking after our initial goals were met. Now that everyone is used to the weekly cadence and where to find these numbers, we continue to review as a team to see where additional improvements can be made and build improvement objectives/priorities based on the numbers.

From support, we brought out this same exercise to Sales, Accounting/Finance, specific IT services KPIs (backups, RMM, etc), which then led to our overall company initiatives. The important thing is that the numbers are easy to gather and visible in a dashboard format for everyone to see and have access to. Gaining the buy-in from everyone and giving them ownership of their departments has led to major leaps in our success in the last 2 years and expanded the number of clients we can support and better each solution we offer by proper delegation and accountability.

The bottom line is, the more you know about where you are, the better informed you will be to make the right decisions on how to get to where you want to be in the shortest amount of time. We always say, "what gets tracked, gets done" and if something isn't being tracked, then it should be a priority or worked on."

Bryan Badger | CEO | Integral Networks:

"KPIs are how you measure your business and how your people can track and see in real-time how they are doing. When your KPIs start to get out of whack, that is an indicator to figure out what is going on and quickly head it off. It is also an indicator that things are humming along nicely.

As a service-oriented company, we live and die primarily by our service metrics. Yes, we have several KPIs from other areas like finance and account management KPIs, but one of our more prominent ones is what we call the "Kill Rate". These KPIs tell us the number of new service tickets opened vs those we have closed. We track this daily, weekly, and monthly so we can determine, hey, is this a temporary blip, or do we have a bigger problem building over the last week and month? Likewise, we have other KPIs that have a dual-use, not just internal but client-facing, as well, like,  response and resolution times over various periods of time, in addition to KPIs that track our SLAs to ensure we are meeting them and if things are in danger of being breached.

Every business/industry has key KPIs to ensure the health of a business, so identify those and make them a part of your management. Maybe you have a particular problem that needs solving, define a KPI and put an emphasis on it until the problem is resolved, then shift to a new focused KPI. In the end, you need to decide what is important to you and then measure and track it. Because if you don't, it won't."

Ilan Sredni | CEO & President | Palindrome Consulting, Inc. - "Delivering Peace of Mind":

"KPI scorecards happen to be one of the most efficient ways to manage a business. By implementing KPI scorecards, one can measure certain things in the business when someone wants to focus on them. For example, we use it to measure our team's efficiency, our speed to respond, and how many people need to work on a specific item.

An easy way to understand KPIs is to think of them as the speedometer or the gas gauge in your car, or even the GPS. How can one measure how far it can still go if you don't look at the gas gauge? By the same token, one can see how far one has come by reviewing where the trip was initiated."

Jeremy Kushner | CEO | BACS Consulting Group, Inc.:

"We have a couple of core reasons for doing this.  We use KPIs to allow us to keep an ongoing pulse of the most important aspects of our business and to make course corrections quickly.  Most of our financial KPIs are updated on a monthly basis, but other KPIs, such as those related to service delivery, are tracked multiple times a week, because a small impediment, such as having a couple of staff members out sick, can create a domino effect and severely impact our service level agreements to our customers.

Kind of like the instrument panel of an airplane, with these KPIs in place, we would be flying blind.  In the early days, these might have been less impactful because our business was smaller and the owners had eyes on every aspect.  With business growth, these are absolutely essential."

Mark Veldhoff | CEO/Founder | Envizion IT:

"We wanted to lower the time it took to execute standard tasks such as PC deployments, new user creations, etc. We lowered our time by nearly 20% by simply putting an "estimated time" on each ticket. It gave our techs feedback on how successful they were being. When setting clear expectations, your team will step up and meet your organization's goals.''

Michael Nelson | Owner | TLC Tech:

The main reason to use KPIs is to make sure your business is paying attention to metrics it wants to change OR wants to ensure that the required behavior is occurring.  The other advantage is it allows you to intervene faster to make sure you achieve your goals.

You can have leading or lagging indicators. An example of leading indicators would be around sales. If a typical sale requires a first meeting, a presentation, and then a contract signing (you work backwards). If you get 1 new sale from 4 meetings, then the number of meetings held is a leading indicator. By tracking the number of first meetings, we were able to get a better idea of how many expected new clients would be coming aboard.

A lagging indicator is to show past performance. We monitor the number of tickets opened in a day as well as the number of tickets closed. The goal is to be 100% or better on most days. We have an easy-to-view screen that tells us if we are starting to fall behind on closing tickets and allows us to intervene before we have customer satisfaction issues."


I hope you have enjoyed these sources of insight and action from these industry leaders. What is your main takeaway?

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