Chris Day, CEO of IT Glue, presents on the value of process and documentation to MSPs. This was presented at the Robin Robins Producers Club in Nashville, TN on Feb 12th 2016.
8. The first and foremost reason
for documenting any process
is the fact that it…
AMBIGUITY IS (NOT)
AWESOME
reduces operational ambiguity.
--Management Study Guide
9. “the knowledge worker spends
about 2.5 hours per day or
roughly 30% of the workday,
searching for information”
KNOWLEDGE WORKER
STUDY
23. COST OF BAD
DOCUMENTATION
Team Size
Technical /Staff
5
Average Annual Salary
For All Employees
$60,000
Average Hourly Labor Rate
Fully Burdened + 15%, Rounded Down
$43/Hour
Time Wasted Due to Bad Documentation
Experts Estimate @ 20-30%
20% / 10% / 5% (high/medium/low)
Monthly Cost of Time Waste
(Number of Tech Staff) x (1 Week Labor) x (Time Wasted)
$6,880 / $3,440 / $1,720 (high/medium/low)
Monthly Opportunity Cost
Based on 50% GM = (Monthly Cost of Time Waste) x 2
$13,760 / $6,880 / $3,440 (high/medium/low)
Total Monthly Cost of Bad Documentation
(Monthly Cost of Time Waste) + (Monthly Opportunity Cost)
$20,640 / $10,320 / $5,160 (high/medium/low)
Total Annual Cost of Bad Documentation
(Monthly Cost of Time Waste) x 12
$247,680 / $123,840 / $61,920 (high/medium/low)
24. IMPACT OF TIME VARIANCE
Sample Tickets 1. Setup New User Account
2. Troubleshoot a Slow Computer
3. Deploy a New Workstation
Estimated # Transactions Annually
Based on 50 Customers, Avg. 20 Staff (1000 Users/Endpoints)
300 Transactions
Estimated Hours Per Transaction
Total Labor Required for Each Transaction
0.5 to 2.0 Hours
Total Annual Cost (All Transactions)
# Transactions x Time x Hourly Cost ($43/Hour)
$6,450 to $25,800
Potential Savings w/ Good Documentation
High - Low
$19,350 Wow!
25. IMPACT OF LABOR COSTS
Sample Tickets 1. Setup a New Complex User/Workstation
2. Deploy a Switch, Firewall or Backup Device
Estimated # Transactions Annually
Based on 50 Customers, Avg. 20 Staff (1000 Users/Endpoints)
250 Transactions
Estimated Hours Per Transaction
Total Labor Required for Each Transaction
2.0 Hours
Range of Labor Costs Per Hour
Variance from $35,000 to $95,000 + Overhead
$25/hour to $68/hour
Total Annual Cost (All Transactions)
# Transactions x Time x Hourly Cost
$12,500 to $34,000
Potential Savings w/ Good Documentation
High - Low
$21,500 Wow!
26. COST OF A NEW HIRE
New Hire Efficiency Time & Cost of a New Employee
Efficiency of New Hire Due to Bad Documentation
Based on $60,000 Fully Burdened Salary, Level 2 Engineer
80% @ 4 Weeks to 80% @ 10 Weeks
Hours Wasted Due to Bad Documentation
Time Spent Training, Researching, “Shoulder-Tapping”
98 to 272
Setup Cost for New Employee
Hours Wasted x Hourly Cost ($43/Hour) + Opportunity Cost
$12,642 to $35,088
Potential Savings w/ Good Documentation
High - Low
$22,446 Wow!
27. ANNUAL SAVINGS (3
EXAMPLES)
Area of Waste Potential Annual Savings
(1,000 Endpoint MSP)
Time Variance
Variance in Time Required for Common Tasks
$19,350
Labor Costs
Tasks Requiring Level 1 vs. Level 2 vs. Level 3 Engineer
$21,500
New Hire / X-Training
Assuming Single New Hire @ $60K Salary
$22,446
Potential Savings w/ Good Documentation
High - Low
$63,296 Wow!