How Can the FTE Model Compete with the MSP Model?
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When is an MSP remote?
What makes you consider someone remote?
Is it where their mail goes?
Is it where their office is?
Which office, HQ or another one?
Is it where they are familiar with the territory?
Is it where they have staff?
Is it how far their staff is from you?
Is it if they can work inside your walls?Consider the same things for an FTE. What makes you define someone as local or not local? It's not as easy as you think.
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@scottalanmiller said in How Can the FTE Model Compete with the MSP Model?:
@kelly said in How Can the FTE Model Compete with the MSP Model?:
Relationships are key to IT, and the difference between in person interactions compared to over the phone or via email/chat is marked. If all things are equal I would argue that a local FTE (able to get face to face with stakeholders without additional cost) is superior to a remote MSP.
I'll flip flop here.
I agree that relationships are key.
I'll disagree that local is better than remote all things equal.How does not being physically present improve relationships (unless things are toxic at one or the other, but that voids the model)?
But key here is you are saying the local FTE is better than the remote MSP. Why did you choose that scenario, though? Why not state that a local MSP is better than a remote FTE? I feel like you are keeping the association of FTEs being also local, and MSPs always being remote.
Because your examples for good MSPs are all remote, and the majority of companies where the "pool of knowledge" item favors MSPs tend to be regional if they even have multiple locations.
In the case of an MSP, what does remote even mean?
From my quoted post: "able to get face to face with stakeholders without additional cost"
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@scottalanmiller said in How Can the FTE Model Compete with the MSP Model?:
When is an MSP remote?
What makes you consider someone remote?
Is it where their mail goes?
Is it where their office is?
Which office, HQ or another one?
Is it where they are familiar with the territory?
Is it where they have staff?
Is it how far their staff is from you?
Is it if they can work inside your walls?Consider the same things for an FTE. What makes you define someone as local or not local? It's not as easy as you think.
It is easy in the context of relationships. Can I get face to face with someone for minimal cost? That is local.
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@kelly said in How Can the FTE Model Compete with the MSP Model?:
@scottalanmiller said in How Can the FTE Model Compete with the MSP Model?:
@kelly said in How Can the FTE Model Compete with the MSP Model?:
Relationships are key to IT, and the difference between in person interactions compared to over the phone or via email/chat is marked. If all things are equal I would argue that a local FTE (able to get face to face with stakeholders without additional cost) is superior to a remote MSP.
I'll flip flop here.
I agree that relationships are key.
I'll disagree that local is better than remote all things equal.How does not being physically present improve relationships (unless things are toxic at one or the other, but that voids the model)?
By allowing for other options, like not being tempted to waste time by being in proximity when not needed, not forcing resources to filter their willingness to work for you based on location, etc. Locality brings a lot of negatives to both parties. I don't disagree that face time can be great, if you have people who are good at face time which a lot of people are not.
But I feel that on average, it ends up a negative. Not a huge negative, not a pure negative, nothing like that. Just I think that people who enjoy face time (which I am one of) tend to prioritize that stuff because it "feels good" and forget to look at if it helps the company's bottom line.
We did this at the big Wall St. bank. They had to pay far more for staff, tons in real estate costs, and lost insane amounts of productivity staffing nearly twice as many people as they should have, all because they prioritized face time over profits.
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@kelly said in How Can the FTE Model Compete with the MSP Model?:
It is easy in the context of relationships. Can I get face to face with someone for minimal cost? That is local.
My customers across the country get that with us. They couldn't get people who "lived locally" for the same cost overall (all things considered.) But they throw a retirement party, we pop in just to go drink with them. Sure, 1000 miles away (literally) but it's the full picture that matters.
Are we local or not local? We get face time, it's not expensive. But we don't live locally.
Just one example, but it's complex.
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Take another example, lots of companies considered us remote because of where our mail drop was (NY) and ignored the fact that most of us literally lived down the street (in TX.) To them, local had nothing to do with where the people were or that we'd run into each other at Walmart. Their idea of local seemed pretty weird to me.
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@scottalanmiller said in How Can the FTE Model Compete with the MSP Model?:
@kelly said in How Can the FTE Model Compete with the MSP Model?:
It is easy in the context of relationships. Can I get face to face with someone for minimal cost? That is local.
My customers across the country get that with us. They couldn't get people who "lived locally" for the same cost overall (all things considered.) But they throw a retirement party, we pop in just to go drink with them. Sure, 1000 miles away (literally) but it's the full picture that matters.
Are we local or not local? We get face time, it's not expensive. But we don't live locally.
Just one example, but it's complex.
Not expensive? Compared to an FTE it is horribly expensive. Maybe not directly for the company, but the MSP has to recoup the costs of time and travel somehow, and that will affect rates if you're going to stay profitable.
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Here is another local question....
If you have an MSP model (pool, lots of people) and one or two of them are in the office daily, what percentage of the pool needs to be face to face to be local? What if the company is next door, but you never see the people?
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@kelly said in How Can the FTE Model Compete with the MSP Model?:
@scottalanmiller said in How Can the FTE Model Compete with the MSP Model?:
@kelly said in How Can the FTE Model Compete with the MSP Model?:
It is easy in the context of relationships. Can I get face to face with someone for minimal cost? That is local.
My customers across the country get that with us. They couldn't get people who "lived locally" for the same cost overall (all things considered.) But they throw a retirement party, we pop in just to go drink with them. Sure, 1000 miles away (literally) but it's the full picture that matters.
Are we local or not local? We get face time, it's not expensive. But we don't live locally.
Just one example, but it's complex.
Not expensive? Compared to an FTE it is horribly expensive.
We can prove that it is not.
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@kelly said in How Can the FTE Model Compete with the MSP Model?:
Maybe not directly for the company, but the MSP has to recoup the costs of time and travel somehow, and that will affect rates if you're going to stay profitable.
That is very true, no denying that. But you can build those costs in. There are certainly costs involved, but there are savings too. You have to look at the whole picture.
In this example, we have housing costs about 20% lower than they do, our fuel is way cheaper ($.25 I bet), and our Internet is a fraction of the cost (about 10% the cost, I kid you not.) Going local to them would require us to raise prices, traveling to them is trivial.
