We’ve talked on this podcast a fair bit about both outsourcing and offshoring service delivery as one way you can scale your MSP. Outsourcing is where you subcontract to a third party—this might be a master MSP or an outsourced NOC, for example. Offshoring is where you establish an office for your MSP in another country.
In episode 003, I talked to James Vickery of Benchmark 365 about the process he went through to offshore his MSP to take advantage of IT outsourcing. And more recently, I spoke to Martin Haak in episode 038 about how he outsources everything. He focuses on sales and relationship building and outsources everything else, including technical service delivery.
Shortly after that episode with Martin aired, I was reading an article in CRN magazine about master MSPs. And in that article was a quote from my guest today, Todd McQuilkin of Air IT, about how he does not recommend outsourcing to any MSP.
I thought that was an interesting counterpoint to some of the ideas and issues we’ve been discussing here. So I asked Todd if he’d be willing to chat with me about why he thinks outsourcing is not the way to go. That’s where our conversation today starts—but where we end up is in looking at the Service Desk Institute (SDI) and their Service Desk Certification (SDC) and how the SDI methodology can help you optimize your processes and service delivery to achieve great profitability in-house.
SDI has traditionally been focused on enterprise IT teams, not MSPs, which I think is why we don’t hear them talked about all the often in MSP circles. But Todd and his Air IT team have done the SDC and are now working closely with SDI to provide MSP input on the certification criteria. He calls SDI a hidden gem.
But first, our 1 Thing segment, where we hear from an MSP about 1 thing that’s made a difference in their business. Today we have Aaron Marks of ArcSource Consulting.
1 Thing (#MSP1T)
[02:41] Aaron Marks is the number two person at ArcSource Consulting in Berkeley, California.
[02:50] His one thing is recognizing the importance of separating reactive roles from proactive roles. There’s always going to be more reactive stuff.
[03:07] That prevents people from getting to the proactive stuff, which is important but not urgent. ArcSource makes a point of not assigning reactive tasks to people in proactive rules.
[03:21] By separating these roles, they were able to focus attention and make progress on things that were important, but not urgent. 75% of their company is proactive.
[03:46] The reactive roles are on the help desk and everyone else’s job is to reduce noise for the help desk.
What’s your 1 Thing? What idea, strategy, tool, book, process, or thing made a real difference to your MSP career or business? Put another way, let’s say a new MSP walked up to you at the conference and said, “I’m just getting started in this space. What advice can you give me? What’s worked for you?” and you can only tell them 1 thing. What would that 1 thing be?
Tell us in a voice memo and email the recording to [email protected]. Not only could you be podcast-famous by being featured on the show, but I’ll also send you a Frankly MSP t-shirt. They’re pretty cool and I want to give them away!
Interview with Todd McQuilkin: Growing Your MSP’s Profitability With a Hidden Gem
[09:04] By outsourcing core components like your NOC and your service desk, Todd believes you lose control. It’s definitely more profitable in the short term to outsource, but if you want a sustainable business with long-term value, Todd advises against it.
[10:15] MSPs are in the service industry. We need to control the whole customer experience because there are so many touch points.
[11:01] Delivering a consistent quality service is one of the hardest things to do as an MSP but it’s critical.
[11:51] If you want to keep service delivery in-house, then you need to get really good at it. You have to be efficient and consistent and make good use of automation.
[12:08] Todd has always paid attention to ITSM, the IT service management space. They have a best practices for service desks that’s built around 9 core concepts: leadership, policy and strategy, people management, resources, processes and procedures, managing employee satisfaction, managing customer experience, social responsibility, and management information and performance results.
[13:48] With SDI certification you have to live it everyday and follow the nine concepts.
[14:03] Todd adopted the SDI methodology three years ago, and it has made a tremendous difference with getting things done.
CORRECTION: In the interview, Todd mentions that 56% of SDC certified companies are enterprise MSPs. He later provided me with a corrected number: 19% of certified companies are MSPs.
[14:53] You have to provide evidence during the certification process. They also come back for a four-day audit. It’s a tough process.
[16:25] SDI is like a hidden gem for MSPs. They’re doing things that we’re just starting to talk about, like automation and machine learning.
[18:26] If you’re outsourcing to a master MSP, you aren’t a true MSP, Todd says. You’re a reseller.
[19:39] When you deliver the core components yourself and have high retention and great in-house skill, you can sell your company for many multiples more than companies who outsource.
[22:25] SDI is reporting a record numbers of MSPs joining this year.
[23:52] SDC has helped Air IT scale. They have the process and standardization which makes growing and scaling so much easier.
CORRECTION: In the interview, Todd mentions that SDI has recently released version 4 of their methodology. The correct version number is 8.
[27:47] Get out of your comfort zone. Have a look outside your space. Deliver the core components yourself and don’t outsource.
Links from this episode
- Lessons Learned From Offshoring an MSP Team – FMSP 003
- How Outsourcing Transformed This One-Man MSP – FMSP 038
- ConnectWise Buy Tips Fuel on Master MSP Debate
- Aaron Marks on LinkedIn
- ArcSource Consulting
- Service Leadership (Paul Dippell)
- Service Desk Institute
- Service Desk Certification
- SDI membership
- Todd McQuilkin on LinkedIn
- Air IT
- Frankly MSP Community
Like what you hear? Listen and subscribe.