Using Management Metrics to Create Profitability for Your MSP

April 16, 2013  By Richard Tubb

There is a phrase that a mentor taught me many years ago “What can be measured, can be managed”. This is true for all businesses, but especially for IT Solution Providers and Managed Service Provider (MSP’s) who need to make fact-based decisions about their business on a day-to-day basis.

But many MSP’s I come across make gut-based decisions rather than fact-based decisions.

  • Do you know how profitable your MSP business is based on how much money you have in the bank right now, or how much you have actually billed clients for?
  • Do you know whether a clients contract is profitable based on how much time you think you’ve spent servicing the client, or how much time you’ve actually spent with the client?
  • Do you price projects based on how much time you think the job will take, or how much time you know the job has previously taken?

Fact-Based Decisions

Making decisions based on business data is the key differentiator between basing decisions on fact, and basing decisions on gut feeling.

Relying on business health and management metrics, available in real-time, might mean you know exactly how much you have billed clients halfway through the month, and whether you are going to meet your sales targets or not.

It can also mean eliminating the guesswork when estimating a project, and instead basing your client proposal based on metrics gathered from the last similar project you delivered - adjusting your proposal based on whether that previous project was profitable, or not!

Metrics for Service Delivery

For service delivery management, using a service intelligence platform means that you have real-time metrics on each of your clients and engineers. Is one client taking up an inordinate amount of your help desk’s time and resources? Being alerted to these metrics means you can investigate immediately and take remedial action if required - this might be as simple as assigning a more senior technician to resolve a complex problem, or escalating the issue to a 3rd party vendor to free up your help desk time to deal with other clients.

Metrics for Profitability

Regardless of whether you are an MSP or offer break/fix services, utilizing a service intelligence platform also allows you to gauge the profitability of the services you offer.

For the off-site backup solution you’ve rolled out to some clients - how much time are your engineers spending servicing the solution? If too much - how can this be addressed? If the service is profitable - how can you empower your sales team offering this solution to other clients?

If you have a flat-fee client whose server is continuously crashing due to high levels of spam, you can target that client to sell your cloud anti-spam solution.


All the decisions you make for your MSP business should be based on facts, not gut feeling. Once you start measuring your business, you can start managing it effectively - and that gives you a competitive advantage.

Richard Tubb
The former owner of on award winning IT MAnaged Service Provider, Richard Tubb now provides expert advice to help IT companies who want to grow.

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