Gary Pica is an MSP industry veteran who has built and sold one MSP and is currently an investor in another. He’s the owner of TruMethods, an MSP coaching and peer group.
In this episode, we talk about how small changes to your RHEM number (reactive hours per endpoint per month) can have a huge impact on the health and profitability of your MSP.
What’s Going On
[03:13] Karl recently went to The Tech Museum in San Jose.
[03:47] There were a number of very cool things there. There was a whole interactive section where you could build a network with puzzle pieces. Eight- and 10-year old kids were doing it.
[4:25] There was also a touch interface of a network, with data moving between one IP address and another. You could change the network speed by dragging slower traffic to a different network. And there was a section on security and encryption.
[05:30] Kids need to know about programming and networking because it will be part of their lives forever.
[06:05] Richard feels most young people these days look at IT as a tool instead of looking at how it works.
[06:17] The US has a deficit of STEM skills. Microsoft is expecting a shortage of 21 million AI programmers.
[07:16] As Richard travels around to tech and MSP conferences, he notices that the number one topic of conversation is the IT skill shortage.
[07:35] BBC Technology News reports that the UK is looking for future cybersecurity stars with a 20-million pound initiative from the UK government.
[08:23] Karl says we have to put tons of money into tech education, or we’ll fall behind.
[08:57] CompTIA is trying to get more women involved in technology.
[09:55] Using a computer is not knowing how they work.
[10:05] Toys and robotic kits teach kids to program.
[10:35] There are going to be hacker clubs for kids in the UK as part of the government’s initiatives.
[11:15] Hacker Lab and robotics competitions in the US.
[13:16] This story will be a big ongoing concern for MSPs, who struggle to find talent.
[13:55] Richard would like to know: What do you see as the future of hiring the right IT talent? Leave a comment below to add your perspective.
Interview with Gary Pica: The Tiny Number That Can Make a Huge Difference in Your MSP
[16:47] Reactive hours per endpoint per month—or RHEM—is all the alerts and tickets you handle that are included in your monthly fee. You total up your time on those, then divide by the number of end users you support.
[18:13] It’s a measure of how reactive you are.
[18:18] You have an inventory of time that expires minute by minute. Looking at these percentages by measuring tickets and time can be really powerful.
[19:21] Most MSPs are not tracking RHEM. And when they start doing it, they are shocked. They are way more reactive than they thought they were.
[20:02] The more tickets and alerts you handle, the less valuable you are.
[20:22] Lowering your RHEM allows you to spend time on high value things, like the business relationship, standards, and alignment.
[20:45] When you have more tickets than resources, you pull people from other areas. Gary calls that the reactive spiral of death.
[21:36] To keep your RHEM low, you need a dedicated role and process. Have someone 100% aimed at the customers and technology alignment.
[23:05] Track and make every decision with your RHEM in mind. Thirty minutes or more of RHEM is too much—you’ll struggle with profitability at that level.
[24:07] Make investments in tools. Without the proper tools, a single ticket can burn up so many hours, it throws your RHEM off for the entire month.
[25:11] To track RHEM, put people in defined roles: centralized services, standards and alignment, technology consulting, professional services, and support. There should be a queue for each role to track time.
[26:51] Focus and prioritize on roles that will lower RHEM.
[27:07] Understand the relationship between recurring revenue and the number of people doing tickets.
[29:45] If you can move RHEM by even 15 minutes, you’ll be amazed. Your culture starts to change, your value starts to change, and you start to spin up to world-class results.
Links from this episode
What’s Going On
- Karl Palachuk: Small Biz Thoughts
- Karl Palachuk (Twitter)
- Managed Service in a Month
- Richard Tubb: Tubblog
- Richard Tubb (Twitter)
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