If you are an operations executive at an MSP where your compensation is determined via a pay-for-performance formula, then you are very familiar with the metrics that you are judged against. You are likely asked to maximize billing, revenue, and utilization while minimizing delivery cost and any unbilled time. In a typical MSP, targets are set, and then at the end of a period (quarter, every 6 months, or annually) the actual achievement is compared to set your compensation.
Here’s the thing though. It’s hard enough to reach targets in the best of times. The competition, for one, never sits still and the economy can have a mind of its own. But there is another pervasive factor that often acts as a brake on how well you hit your targets. This is one that management spends so much time trying to control that it has its own universal name and genre: firefighting.
As necessary as it may be, firefighting is, to put it mildly, not fun. So, it’s worth asking what the root cause is, and whether there are better ways that are not as stressful as the process of firefighting. The answer, if you think about it, to what leads down the path to firefighting is uncertainty. This uncertainty shows up everywhere in operations. It could be your project schedule expected a certain number of resources to be available to run your projects, but unexpectedly someone falls sick. Or it could be a client throws a spanner in your project scheduling by changing their mind on when a project can start. Or it may be that the estimate for a project’s duration was not what you initially thought it would be and instead starts to run long. This cascades into all the other projects you are committed to delivering, leading to scheduling chaos and, inevitably firefighting.
From management theory there are three ways to solve the problem of uncertainty. The first approach – and the most common one – is to create buffers. In manufacturing, these buffers are known as inventory. Typically, the more uncertainty, the more inventory is required. For MSPs, the buffers are slack times given to project durations, slack in the commitments made to customers as to when projects will start, or slack in terms of extra resources available (e.g. via contractors), as examples.
The second approach to solving uncertainty is to reduce the underlying causes of uncertainty. For MSPs an example of how this can be done is to develop better estimates for say how long a project will take based on experience.
The third approach to managing uncertainty is to make reaction times instantaneous and the effort required frictionless – essentially removing the time and effort required for firefighting.
Red Swift was designed to help MSP executives manage uncertainty through all three of these approaches. Our goal is to help you reduce the pervasive uncertainty that makes it more difficult for MSP executives to reach their objectives. If you’d like to learn more, please get in touch.
{{ c.body }}