The MSP Model fails more often than not.
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@scottalanmiller said in The MSP Model fails more often than not.:
An MSP is an employee of the business and the IT guy at the MSP is like the MSP's "hand". Whatever motivation that a normal employee has of a business, an MSP has for that business as well. An MSP is just like an employee there.
Except that as an employee of the business it is next to impossible for me to "bill more" to the business. I'm salaried, so the money I earn is fixed. I can't sell them a SAN and I get the same wage whether I do 40 hours or 60 hours of work a week. Also, if I make my staff redundant, business costs will fall, whereas if an MSP makes someone redundant (ie by suggesting to the business that they don't need as many on-site staff), then the MSP's revenues fall - they are worse off. In other words, internal IT may try and reduce the amount of IT done, whilst an MSP will naturally seek to increase it. So again, there is a conflict of interest.
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@Carnival-Boy said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
An MSP is an employee of the business and the IT guy at the MSP is like the MSP's "hand". Whatever motivation that a normal employee has of a business, an MSP has for that business as well. An MSP is just like an employee there.
Except that as an employee of the business it is next to impossible for me to "bill more" to the business.
I'm actually writing up a thing on that right now
Maybe in the UK it is hard, but in the US it is trivial for IT staff to bill more (look at @jason whose entire department is hourly giving them unlimited extra billing time) or to just do less work (the more common option, billing for idle time) and even on Wall St. with enormous salaries it is standard to bill 40-80% over your base hours.But any salary cap for a normal employee can be applied to an MSP. So if you feel that there are effective limitations to one, then you have created the answer for the other.
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@Carnival-Boy said in The MSP Model fails more often than not.:
I can't sell them a SAN and I get the same wage whether I do 40 hours or 60 hours of work a week.
An MSP can't sell a SAN either, that's a VAR. And the standard MSP model is capped pay (essentially salary) so you are describing the MSP situation perfectly.
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@scottalanmiller said in The MSP Model fails more often than not.:
Experience should play no part, this is architecture that we are discussing. Unless you work with companies doing A/B with the same staff or roles (I have) you'd never even have an opportunity to test this. Looking at internal vs. external means nothing unless there is a control method for only testing the structural differences. Does that make sense? Otherwise it's like saying that McDonald's is better than Burger King because you tried McD's fries but BK's onion rings. You need to compare the same things to get a good feel, maybe you just don't like onion rings.
No, it's like trying McDonald's burgers and BK's burgers and thinking you prefer McDonald's, then asking every person you know what they prefer and having them all tell you they prefer McDonald's burgers, but then going and buying BK burgers because you believe that in theory, and logically speaking, BK burgers should be better and you don't want experience to play any part.
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@scottalanmiller said in The MSP Model fails more often than not.:
e MSP's job. So while the MSP has a little extra in the middle, the employee being there to look out for themselves while
This is good in theory, but as @Carnival-Boy said, it can pit them at odds with one another... the MSP is a money making venture, it wants to bill as much as it can to the company, and the company wants to pay as little as it can to the MSP... how do you resolve this conflict?
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@Carnival-Boy said in The MSP Model fails more often than not.:
Also, if I make my staff redundant, business costs will fall, whereas if an MSP makes someone redundant (ie by suggesting to the business that they don't need as many on-site staff), then the MSP's revenues fall - they are worse off. In other words, internal IT may try and reduce the amount of IT done, whilst an MSP will naturally seek to increase it. So again, there is a conflict of interest.
If you make someone redundant internally you get less work done and the remaining people have more work to do - negative impact. The motivations to keep people around are still there internally and famously companies swell with internal staff because of pride or a motivation to "manage more people."
Let me ask you, how many SMBs have you seen with any internal staff? Since nearly all SMBs don't need even a single full time person, doesn't that completely refute that concept? In order to keep employed, the one IT person pushes for being kept on even though they aren't needed full time?
There is the same conflict on both sides. But I'd argue that the conflict is actually stronger on the employee side as there is more emotional ties and risk and in decades of observation, I'd say this is beyond proven. Internal staff swelling is so common and just look at SW, thousands and thousands of examples of overstaffed, underserved internal IT departments.
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@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
e MSP's job. So while the MSP has a little extra in the middle, the employee being there to look out for themselves while
This is good in theory, but as @Carnival-Boy said, it can pit them at odds with one another... the MSP is a money making venture, it wants to bill as much as it can to the company, and the company wants to pay as little as it can to the MSP... how do you resolve this conflict?
You can't, BUT you can't isolate it. This is the SAME conflict that every business has with every employee. MSPs make this better through better structure - MSP reputation matters where employee reputation does not. MSPs have a longevity which is the only significant mediation factor. How do you resolve this with normal IT staff?
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@scottalanmiller said in The MSP Model fails more often than not.:
@Carnival-Boy said in The MSP Model fails more often than not.:
Where I think that an MSP can work is as an additional resource for the internal IT department. We employ different IT companies to assist us, either when we don't have time to do the work ourselves, or where we lack the skills required for specific tasks and projects.
In most cases, I don't agree with the concept of replacing an internal IT department with an MSP, but utilising one (or more) to work alongside an IT department is great. You get the best of both worlds.
So what is the specific value of having an internal person in that (or any) case? You say the best of both worlds, but in all my years of IT, I've never seen any upside to internal IT (as a structure, the people themselves can be great.) The MSP can have the same on site presence, the same full time focus, more concern and ties to the business success... I'm not aware of any benefits to being paid by the business as an IT pro, only negatives. What benefits do you see from the payroll and management not being IT?
Our Payroll is handled by a third party, but it's service we pay for, it's flat rate. Of course if we want more services, we just make a call and they are instantly higher than they were before - perhaps that is what @scottalanmiller is saying, the MSP is sending the employee back to the company at a flat rate, granted it's a flat rate that is probably higher than if the employee was internal, but that extra money pays for a different person to come onsite when the main guy is on vacation, etc.
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@Carnival-Boy said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
Experience should play no part, this is architecture that we are discussing. Unless you work with companies doing A/B with the same staff or roles (I have) you'd never even have an opportunity to test this. Looking at internal vs. external means nothing unless there is a control method for only testing the structural differences. Does that make sense? Otherwise it's like saying that McDonald's is better than Burger King because you tried McD's fries but BK's onion rings. You need to compare the same things to get a good feel, maybe you just don't like onion rings.
No, it's like trying McDonald's burgers and BK's burgers and thinking you prefer McDonald's, then asking every person you know what they prefer and having them all tell you they prefer McDonald's burgers, but then going and buying BK burgers because you believe that in theory, and logically speaking, BK burgers should be better and you don't want experience to play any part.
Okay, have you actually done A/B testing of staff internal and external? Same staff, handled both ways? I've literally found no one that has ever said that internal IT worked well that didn't only test "specific internal people" to "specific external people" and not compared the structures (burgers) at all.
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@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Carnival-Boy said in The MSP Model fails more often than not.:
Where I think that an MSP can work is as an additional resource for the internal IT department. We employ different IT companies to assist us, either when we don't have time to do the work ourselves, or where we lack the skills required for specific tasks and projects.
In most cases, I don't agree with the concept of replacing an internal IT department with an MSP, but utilising one (or more) to work alongside an IT department is great. You get the best of both worlds.
So what is the specific value of having an internal person in that (or any) case? You say the best of both worlds, but in all my years of IT, I've never seen any upside to internal IT (as a structure, the people themselves can be great.) The MSP can have the same on site presence, the same full time focus, more concern and ties to the business success... I'm not aware of any benefits to being paid by the business as an IT pro, only negatives. What benefits do you see from the payroll and management not being IT?
Our Payroll is handled by a third party, but it's service we pay for, it's flat rate. Of course if we want more services, we just make a call and they are instantly higher than they were before - perhaps that is what @scottalanmiller is saying, the MSP is sending the employee back to the company at a flat rate, granted it's a flat rate that is probably higher than if the employee was internal, but that extra money pays for a different person to come onsite when the main guy is on vacation, etc.
The term MSP indicates flat rate. We are using it loosely here to mean "any service provider", so flat rate is not the only option. But the MSP portion of the SP spectrum is flat rate.
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@scottalanmiller said in The MSP Model fails more often than not.:
@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
e MSP's job. So while the MSP has a little extra in the middle, the employee being there to look out for themselves while
This is good in theory, but as @Carnival-Boy said, it can pit them at odds with one another... the MSP is a money making venture, it wants to bill as much as it can to the company, and the company wants to pay as little as it can to the MSP... how do you resolve this conflict?
You can't, BUT you can't isolate it. This is the SAME conflict that every business has with every employee. MSPs make this better through better structure - MSP reputation matters where employee reputation does not. MSPs have a longevity which is the only significant mediation factor. How do you resolve this with normal IT staff?
Well, the recent move of IT from salaried - exempt to salaried - non exempt or pure hourly has definitely changed the landscape (though it hasn't changed for me) making it more inline with the MSP.
Many discussions around here, @scottalanmiller have indicated that MSPs bill hourly, not a flat rate. So, if the MSP is billing a flat rate to compare against the salaried internal, then the conflict is resolved.
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@scottalanmiller said in The MSP Model fails more often than not.:
@Carnival-Boy said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
Experience should play no part, this is architecture that we are discussing. Unless you work with companies doing A/B with the same staff or roles (I have) you'd never even have an opportunity to test this. Looking at internal vs. external means nothing unless there is a control method for only testing the structural differences. Does that make sense? Otherwise it's like saying that McDonald's is better than Burger King because you tried McD's fries but BK's onion rings. You need to compare the same things to get a good feel, maybe you just don't like onion rings.
No, it's like trying McDonald's burgers and BK's burgers and thinking you prefer McDonald's, then asking every person you know what they prefer and having them all tell you they prefer McDonald's burgers, but then going and buying BK burgers because you believe that in theory, and logically speaking, BK burgers should be better and you don't want experience to play any part.
Okay, have you actually done A/B testing of staff internal and external? Same staff, handled both ways? I've literally found no one that has ever said that internal IT worked well that didn't only test "specific internal people" to "specific external people" and not compared the structures (burgers) at all.
The idea of doing this test just seems odd, but would really only seem to work if the MSP already existed with a full breath of staff that the new MSP members (aka old internal staff) suddenly have as a resource for their use.
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@scottalanmiller said in The MSP Model fails more often than not.:
@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Carnival-Boy said in The MSP Model fails more often than not.:
Where I think that an MSP can work is as an additional resource for the internal IT department. We employ different IT companies to assist us, either when we don't have time to do the work ourselves, or where we lack the skills required for specific tasks and projects.
In most cases, I don't agree with the concept of replacing an internal IT department with an MSP, but utilising one (or more) to work alongside an IT department is great. You get the best of both worlds.
So what is the specific value of having an internal person in that (or any) case? You say the best of both worlds, but in all my years of IT, I've never seen any upside to internal IT (as a structure, the people themselves can be great.) The MSP can have the same on site presence, the same full time focus, more concern and ties to the business success... I'm not aware of any benefits to being paid by the business as an IT pro, only negatives. What benefits do you see from the payroll and management not being IT?
Our Payroll is handled by a third party, but it's service we pay for, it's flat rate. Of course if we want more services, we just make a call and they are instantly higher than they were before - perhaps that is what @scottalanmiller is saying, the MSP is sending the employee back to the company at a flat rate, granted it's a flat rate that is probably higher than if the employee was internal, but that extra money pays for a different person to come onsite when the main guy is on vacation, etc.
The term MSP indicates flat rate. We are using it loosely here to mean "any service provider", so flat rate is not the only option. But the MSP portion of the SP spectrum is flat rate.
Flat rate as in hourly based on the number of hours worked? or flat rate as in - salaried - exempt?
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@scottalanmiller said in The MSP Model fails more often than not.:
Even if observation doesn't show it, show it with logic. I'm arguing that professionals working in an professional structure have benefits. From everything I know in every field, this is considered common sense, common knowledge and basic business. Maybe I'm wrong, but I didn't think that this was an area to be disputed.
I don't know what you mean here, so I can't dispute it
Are you saying I don't work in a professional structure? -
@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Carnival-Boy said in The MSP Model fails more often than not.:
Where I think that an MSP can work is as an additional resource for the internal IT department. We employ different IT companies to assist us, either when we don't have time to do the work ourselves, or where we lack the skills required for specific tasks and projects.
In most cases, I don't agree with the concept of replacing an internal IT department with an MSP, but utilising one (or more) to work alongside an IT department is great. You get the best of both worlds.
So what is the specific value of having an internal person in that (or any) case? You say the best of both worlds, but in all my years of IT, I've never seen any upside to internal IT (as a structure, the people themselves can be great.) The MSP can have the same on site presence, the same full time focus, more concern and ties to the business success... I'm not aware of any benefits to being paid by the business as an IT pro, only negatives. What benefits do you see from the payroll and management not being IT?
Our Payroll is handled by a third party, but it's service we pay for, it's flat rate. Of course if we want more services, we just make a call and they are instantly higher than they were before - perhaps that is what @scottalanmiller is saying, the MSP is sending the employee back to the company at a flat rate, granted it's a flat rate that is probably higher than if the employee was internal, but that extra money pays for a different person to come onsite when the main guy is on vacation, etc.
The term MSP indicates flat rate. We are using it loosely here to mean "any service provider", so flat rate is not the only option. But the MSP portion of the SP spectrum is flat rate.
Flat rate as in hourly based on the number of hours worked? or flat rate as in - salaried - exempt?
Flat rate, period. Meaning the contract is for $100/month, every month, regardless of service. There would always be something that designates when that would change. Most commonly it is based on number of employees.
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@Carnival-Boy said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
Even if observation doesn't show it, show it with logic. I'm arguing that professionals working in an professional structure have benefits. From everything I know in every field, this is considered common sense, common knowledge and basic business. Maybe I'm wrong, but I didn't think that this was an area to be disputed.
I don't know what you mean here, so I can't dispute it
Are you saying I don't work in a professional structure?Does everyone that you report to up the chain work in your profession? It's not that your chain might be unprofessional, it just might not be your profession.
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@Dashrender said in The MSP Model fails more often than not.:
Our Payroll is handled by a third party, but it's service we pay for, it's flat rate.
I'm a fan of outsourcing wherever possible and payroll is often a great case for it. It's fairly straightforward, and easily understood by the non-HR people (eg the Finance Director). IT is way more complex, more flexible, constantly changing, and is usually a key part of a business's strategy plan.
Outsourcing IT can work in a large organisation, because the organisation is big enough to justify employing an internal IT expert purely to manage the MSPs, set budgets and define strategy. It can work in a small organisation because, well, small organisations often aren't big enough to justify a full-time IT employee ( there simply isn't enough work to do) and usually don't have complex IT requirements. But in medium sized organisations, outsourcing is likely to suck, for all the reasons I've outlined - mainly conflicts of interest. I've eaten the onion rings, and the fries, and they don't taste good.
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@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
e MSP's job. So while the MSP has a little extra in the middle, the employee being there to look out for themselves while
This is good in theory, but as @Carnival-Boy said, it can pit them at odds with one another... the MSP is a money making venture, it wants to bill as much as it can to the company, and the company wants to pay as little as it can to the MSP... how do you resolve this conflict?
You can't, BUT you can't isolate it. This is the SAME conflict that every business has with every employee. MSPs make this better through better structure - MSP reputation matters where employee reputation does not. MSPs have a longevity which is the only significant mediation factor. How do you resolve this with normal IT staff?
Well, the recent move of IT from salaried - exempt to salaried - non exempt or pure hourly has definitely changed the landscape (though it hasn't changed for me) making it more inline with the MSP.
Many discussions around here, @scottalanmiller have indicated that MSPs bill hourly, not a flat rate. So, if the MSP is billing a flat rate to compare against the salaried internal, then the conflict is resolved.
NTG is an ITSP and typically bill hourly. Customers like this because it costs less than flat rates. But we offer flat rates.
Both have conflicts, just different ones. Hourly workers (internal or ITSP) have a motivation to increase the hours worked. Salaried workers (internal or MSP) have a motivation to do less work overall.
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@Dashrender said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
@Carnival-Boy said in The MSP Model fails more often than not.:
@scottalanmiller said in The MSP Model fails more often than not.:
Experience should play no part, this is architecture that we are discussing. Unless you work with companies doing A/B with the same staff or roles (I have) you'd never even have an opportunity to test this. Looking at internal vs. external means nothing unless there is a control method for only testing the structural differences. Does that make sense? Otherwise it's like saying that McDonald's is better than Burger King because you tried McD's fries but BK's onion rings. You need to compare the same things to get a good feel, maybe you just don't like onion rings.
No, it's like trying McDonald's burgers and BK's burgers and thinking you prefer McDonald's, then asking every person you know what they prefer and having them all tell you they prefer McDonald's burgers, but then going and buying BK burgers because you believe that in theory, and logically speaking, BK burgers should be better and you don't want experience to play any part.
Okay, have you actually done A/B testing of staff internal and external? Same staff, handled both ways? I've literally found no one that has ever said that internal IT worked well that didn't only test "specific internal people" to "specific external people" and not compared the structures (burgers) at all.
The idea of doing this test just seems odd, but would really only seem to work if the MSP already existed with a full breath of staff that the new MSP members (aka old internal staff) suddenly have as a resource for their use.
Yes, starting a new MSP just to do this would not be a useful test. Yes, it is pulling in internal staff and then comparing - something that I see constantly on the MSP side of things. We see companies move from internal to external but keep staff on a regular basis, and they are pretty happy in general. Cost less, get more, same people. Everyone wins. And the other way, doing one to one replacements of a position that was vacated but keeping them full time on site.
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@Carnival-Boy said in The MSP Model fails more often than not.:
@Dashrender said in The MSP Model fails more often than not.:
Our Payroll is handled by a third party, but it's service we pay for, it's flat rate.
I'm a fan of outsourcing wherever possible and payroll is often a great case for it. It's fairly straightforward, and easily understood by the non-HR people (eg the Finance Director). IT is way more complex, more flexible, constantly changing, and is usually a key part of a business's strategy plan.
True, for sure, but I'd argue that the more complex it is, the more having good structure and support is important.
