Keeping Score

As a professional EOS® implementer, one of my favorite tools to teach is the scorecard.  I’ve always been a numbers guy, so I loved the idea of a scorecard when I owned and ran my own MSP.  Unfortunately, I loved the idea a little too much, and I fell into one of the common scorecard traps:  too many numbers.  I eventually learned that the weekly scorecard needs to be lean and mean with no more than 15 metrics. 

At the other end of the spectrum, some clients don’t see the value of a scorecard at all…or they see the value but think it’s not worth the effort required.  Let’s be clear, scorecards are a lot of work.  However, if you’re measuring the right numbers and using the data to drive and refine your business, the return-on-investment of your scorecard will be well worth the hard work required to create and update it.

So, let’s say that you “get” the value of the scorecard, and you’re on-board about keeping the metrics to a minimum.  Now the big question: “What should I measure?”  Well, I’m glad you asked…

For my IT friends, here’s a list of my favorite MSP KPIs (key performance indicators):

Service Delivery/Ops:

1.       Kill ratio (number of closed tickets divided by number of opened tickets)
2.      Ticket response time
3.      Ticket resolution time
4.      Tech utilization rate (only for time and materials staff or project staff)
5.      Agreement gross margin (great for MSP engineers)
6.      # of Rework tickets
7.      # Overdue projects
8.      # Tickets over 30 days old
9.      # Endpoints patched
10.     # Endpoints managed
11.      RHEM (reactive hours per endpoint per month)*
12.     Tickets per endpoint per month*
13.     Missed SLA/Broken Promises*
14.     MoW (multiple of wages)
15.     Effective ratio**
16.     Customer rating (client satisfaction)

vCIO/Account Management:

1.       # Client Visits
2.      # Clients matching company standards
3.       Project Revenue $

Finance:

1.       A/R Days
2.       # Clients on auto-pay
3.       % Budget
4.       % Expenses
5.       $ Over 90 Days
6.       Turning Point (percentage of expenses covered by recurring revenue)*

Sales

1.       # Client Agreements
2.      # New Client Agreements
3.      MRR (monthly recurring revenue dollars)
4.      # Endpoints managed
5.      # Proposals sent
6.      # Leads
7.      # FTAs (first-time appointments)
8.      # Networking events attended
9.      Pipeline $
10.    Days to turn-around quote/proposal (quote aging)
11.     Weekly non-MRR sales

To recap, remember that our scorecard must be weekly, no more than 15 metrics, each metric must have an owner, and each metric must have a goal.  If you’re reading this article and wonder how you could ever begin to measure your company’s most critical numbers on a weekly basis, you need to check out BrightGauge.  After using BrightGauge*** in my own business, I couldn’t imagine creating a scorecard without them!

 

"That which is measured improves. That which is measured and reported improves exponentially."
Karl Pearson

 

*   – Shout out to Gary Pica at TruMethods
**  – Shout out to Rex Frank at Sea Level Ops
*** – Shout out to Eric Dosal at BrightGauge