In this episode, Richard speaks to Peter Kujawa, Vice President of Service Leadership and TSP 
evangelist. Service Leadership helps IT solution providers to monitor MSP metrics. And to build shareholder value and reach top quartile, best-in-class profitability.
They do this through objective benchmarking, advanced peer groups, self-paced performance improvement tools, executive training, and individual management consulting for MSPs worldwide.
An Interview with Peter Kujawa
What is a TSP?
A ‘TSP’ is a ‘technology solution provider’, a broader category than just MSP. Peter explains that Service Leadership benchmarks 10 different TSPs. “So these are what we refer to as predominant business models, PBMs. MSP is certainly one of them – it’s our largest sample set.
“But we also have benchmark product centric also known as VARs, which are defined as 60% or more of their revenue from product. There are all sorts of other infrastructure types, including break/fix. We tend to use ‘TSP’ rather than ‘MSP’ in-house.”
How Service Leadership Helps You Monitor MSP Metrics
Service Leadership was founded to help provide objective data to the industry on what ‘good’ looks like. Peter says that founders Paul Dippell and Brian O’Connell had both worked at very large, product-centric and MSP providers.
“So this experience led them to realise that there was a need for objective data, and set the business up to benchmark the IT industry. We benchmark our providers every quarter and feed that data into a system.
“Then, we report back on how they’re doing. But it’s not just relative to the last quarter or last year; it’s how they performed relative to what we refer to as ‘best in class in the industry.’ Those are the most profitable in a sample each quarter. So it’s really helpful, valuable information.”
What MSPs Should Know about Compensation and Remuneration
Peter says: “From the time I joined Service Leadership, I got requests for information on compensation and remuneration. People wanted to know what was happening in the market and how much others were paying staff and so on.
“And this led us to bring back our compensation report. Previously we’d published every other year, but the need for these MSP metrics was so great, we made it an annual publication.
“Because we have such a large data set, from all over the world, we can get really granular on the information we share. Plus, we’re the only company in the world that can correlate compensation or remuneration data to profitability. And having those two sets of data means we can provide a whole collection of averages and highlight best in class in each category.”
The Types of MSPs Who are a Good Fit for Service Leadership
Not all MSPs are right for Service Leadership. Peter says: “It’s typically MSPs with $1m+ in revenue. Why? Because if you’re lower than that amount, you don’t need our products.
“Although in fairness, when you’re at the point where you have a few employees, that’s the ideal time to learn how to build pricing, packaging and your go-to-market process. But most MSPs at that stage don’t, because of the information we need about your accounts.”
Two Benchmarks to Monitor to Understand Your MSP Metrics
Service Leadership have recently announced a new tool, available through the ConnectWise PSM team called SL Insights – it’s free. An MSP has a session with a PSM to take a 30,000 foot view of profitability, their value creation strategy and Modes Theory.
“So the idea is to help introduce all of those concepts to the MSP owner who doesn’t benchmark, so they can understand how some of these pieces fit together and how they can add value to them.
“We benchmark over 60 different KPIs. But the two that we cite as being important is and running their MSP the two profitability metrics that we extrapolate, we have over 60 different KPIs that we benchmarked to in our report books. But the two that we cite are the service multiple of wages and the sales multiple of wages. Because that way the MSP knows where to start.”
Performance Improvement Assistance for MSPs
“If you benchmark your MSP metrics with us, we broadcast a quarterly ‘financial fireside chat’ through SLIQ, our tool to help you understand what’s driving your profit,” says Peter.
Any SLIQ member can access the information, and Service Leadership also share it in their newsletters. The aim, Peter adds, is to provide guidance at scale. And they’re happy to share the data with anyone who asks.
“For any MSP just starting out with benchmarking, we’re happy to jump on a call to offer advice. Our goal is for everybody in the industry to use these tools and really getting the benefit from them. And how to do that at scale is key, too.”
How to Connect With Peter Kujawa
- Service Leadership
- Follow Service Leadership on LinkedIn
- Follow Service Leadership on Twitter
- Connect with Peter Kujawa on LinkedIn
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Mentioned in This Episode
- ConnectWise
- SLIQ
- IT Nation Evolve
- Annual IT Solution Provider Remuneration Report
- SL Insights
- Modes Theory
- CompTIA
- The Tech Tribe
- BrightGauge
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Richard Tubb is one of the best-known experts within the global IT Managed Service Provider (MSP) community. He launched and sold his own MSP business before creating a leading MSP media and consultancy practice. Richard helps IT business owner’s take back control by freeing up their time and building a business that can run without them. He’s the author of the book “The IT Business Owner’s Survival Guide” and writer of the award-winning blog www.tubblog.co.uk
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