Small businesses invest in managed IT services to enhance their market competitiveness through the latest technological innovations. According to Gartner, global IT spending is expected to increase by 8.6% to $4.2 trillion in 2021. The bulk of this spending is concentrated in the communications and IT services sectors. How can SMBs confirm that they are maximizing the returns from their tech investments? They can request that their IT providers report on several key performance indicators (KPIs).
What is a Key Performance Indicator?
A key performance indicator (KPI) is a critical measure of the rate of progress toward the desired target.
This metric also helps to track the quality of products and services. KPIs offer the necessary focus to achieve strategic and operational improvements. Managing KPIs involves improving leading indicators that will, in turn, drive the lagging benefits. These leading indicators herald future success, while lagging indicators document the degree of success in achieving past results.
The Role of KPIs
The hallmarks of good KPIs include:
- Providing objective evidence of the rate of progress towards attaining the desired goal
- Measuring critical elements to support better decision-making
- Offering a means to gauge and compare the extent of performance change over time
- Tracking progress in core business areas
RELATED: A Tech CEO's Shortcut to Business Impact Analysis (discover 6 core business areas that Net Friends CEO, John Snyder, reviews when making everyday business decisions.)
Top KPIs to Measure Your MSP's Performance
If you want to maximize the return on your investment when acquiring IT services, here are the top ten KPIs that you will need to assess how your IT provider is creating progress on your behalf:
1. Server Downtime
A good Managed IT Services Provider offers insights into the performance of your IT infrastructure. Server downtime is a good performance KPI as it measures the percentage of time that your server is not operational (and when it is unplanned). You should know your unexpected downtime rate on a monthly, quarterly, or annual basis.
However, selecting a shorter interval facilitates quicker detection and resolution of any issues with your network. Downtime is quite costly and should be minimize. Ideally, you want an uptime rate as close to 100% as possible with a downtime rate that’s close to zero.
2. Net Promoter Score
The Net Promoter Score (NPS) is a critical customer service metric. It’s often used to evaluate customer experience programs and customer loyalty. This score is assessed with a single-question survey that is reported as a number ranging from 0 to 10, with a higher score being more desirable:
- Promoters: respond with a score of 9 or 10. They are loyal and enthusiastic customers who encourage others to make purchases.
- Passives: respond with a score of 7 or 8. These customers are satisfied with a product or service but are not sufficiently happy to become promoters.
- Detractors: respond with scores ranging between 0 and 6. These are unhappy customers who are unlikely to make a repeat purchase and may even discourage others from making purchases.
Your IT provider should make an effort to collect this data, as it shows their commitment to improving the customer experience.
Based on global NPS ratings, Net Friends scores as a "World Class" Managed Services Provider and we maintain this NPS rating Q/Q and YoY. We track our NPS ratings with every customer support ticket we resolve.
3. Average Handle Time
Nothing is more frustrating than an unresponsive or ineffective help desk. Your Managed IT Services Provider should have a highly responsive support center. The provider should know and willingly share KPIs such as the approximate time taken to resolve a ticket.
4. Ticket Churn
This KPI measures the ratio of open tickets to resolved tickets, another important help desk metric. If tickets are sitting open too long, employee frustration can mount, and their productivity can be disrupted for longer than necessary. Capturing this KPI will allow you to assess how effective your MSP is at resolving issues for their entire customer base.
5. Re-opened Tickets
Any more than a minimal number of re-opened tickets each month signals serious problems – the IT provider may be trying to close tickets early so they appear to meet another KPI, or you may be seeing the sign of an ongoing communication breakdown between your staff and the IT provider.
6. IT Project Schedule Variance
If your organization often sends its IT projects to a Managed IT Services Provider, you should monitor their project-oriented KPIs. The IT Project Schedule Variance (IT PSV) measures the timeliness of project deliverables.
The IT PSV is the difference between Scheduled Completion Time (SCT) and the Actual Completion Time (ACT).
The SCT and ACT are often measured in terms of days or weeks. An IT PSV score of zero means your project was completed on time. A negative IT PSV indicates a time overrun, and a positive score means that your project was completed ahead of the scheduled deadline.
7. IT Project Cost Variance
Ensure that your IT provider gives you detailed cost KPIs to measure how much your projects are delivered on budget.
The IT Project Cost Variance (IT PCV) is the difference between your Scheduled Project Cost (SPC) and your Actual Project Cost (APC).
Like the IT PSV, an IT PCV score of zero indicates that your project was delivered on budget. A negative IT PCV signifies budget overspend, while a positive score means your project was completed under budget.
8. IT Project Earned Value
The IT Project Earned Value (IT PEV) KPI is even more critical for long-term projects.
The IT PEV measures the desired progress of your project, and it is the percentage completion rate of the Budgeted Cost of Work Performed (BCWP).
The BCWP is the sum of all budgeted costs for the labor and resources intended for your project. The Performance Level metric also accompanies the IT PEV. This score is the percentage ratio of the Actual Cost of Work Performed (ACWP) and the IT PEV. The ACWP is the total value of labor and resources spent on your IT project to date. A reputable Managed IT Services Provider should be willing to discuss these KPIs with you.
9. Security Operations Center (SOC) KPIs
A cybersecurity crisis can occur at any time of the day or night. Ideally, if your IT provider has an in-house Security Operations Center (SOC), they can deliver comprehensive monitoring and support. You need to know their average response and resolution time for critical security alerts. A quick response from your IT provider’s SOC can save your organization thousands of dollars and productive hours.
10. Talent Turnover
Pay attention to your IT provider’s employees. While you won’t have access to detailed staff information, if their front-facing staff keeps changing, this may indicate team attrition. If your provider can’t keep top talent for long, it compromises the quality of IT services that your organization receives. While IT services have some degree of automation, you still need high-quality technicians to monitor your network and quickly resolve issues as they arise.
High-Performance IT Services with Net Friends
We are your full-service Managed IT Services Provider and Managed Security Services Provider (MSSP). Net Friends offers top-tier IT experts and an impressive suite of services. We also customize these services to meet your company’s requirements as we consistently surpass our industry’s KPIs. You can access these valuable services for an affordable, fixed, and predictable monthly cost. Contact us today to discuss how we can deliver exceptional IT services tailored to boost your company’s profit margins.
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