Professional services automation software — which helps VARs and managed service providers to run their businesses more effectively — appears to have reached mass adoption among leading MSPs. A key example: During the HTG 2009 Summit and Q2 peer group meeting in Dallas, virtually all of the 300-plus attending solutions providers indicated that they’re using PSA software.
The stat surfaced during a main conference session. Guest speaker Paul C. Dippell, founder and CEO of Service Leadership, asked attendees if anyone had not yet made the move to PSA software. Of the 300 attendees, virtually all of them indicated that they had embraced PSA software.
The reason? “You have to have a PSA, because labor is your inventory and you have to track labor,” said Dippell.
The HTG Peer Group conference brings together MSPs and solutions providers who meet in small groups and share confidential company information — financials, operating margins, etc. — in order to drive the individual companies forward.
The link between HTG peer group members and ConnectWise also is incredibly high. The vast majority of attendees indicated that they are running ConnectWise, and CEO Arnie Bellini is here talking about how ConnectWise is enhancing its software for HTG members.
I am not suggeting that ConnectWise “dominates” the PSA market. But Bellini has tactfully built a high correlation between HTG members and ConnectWise deployments. And two of the upcoming HTG peer group meetings will be held in coordination with the annual ConnectWise Partner Summit.
For its part, ConnectWise rival Autotask has also built relationships with member- and peer-driven organizations such as the MSP Services Network (MSPSN). I’ve also been trading email lately with the Tigerpaw Software team, to get a feel for where they compete in the PSA market — and beyond the PSA market. More coverage to follow in the days ahead.
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I agree with Dippell that “You have to have a PSA, because labor is your inventory and you have to track labor.” However to truly have the ability to “track labor” PSA software has to have the ability to reconcile work in process (WIP)–something that simply cannot be done in Connectwise. Actually, it runs contrary to the ConnectWise philosophy as Arnie once told me himself: “Only a $%&#@! idiot tracks WIP. True MSPs bill by the unit.”
Hey Jim: I can’t speak for Arnie. But I will let him know your thoughts and I’ll check to see if he has a response.
Thanks Joe, but I’m pretty sure Arnie knows what our thoughts are. We’ve been a relatively satisfied Connectwise customer for 4 years, or so, but it remains a complete mystery to us why a self-proclaimed CPA like Arnie is so adamant that there is no need to (or it is not the role of Connectwise to) reconcile time, and truly track staff productivity.
I’m curious as to Arnie’s response.
Hi Joe,
Great conversation and certainly one that will only grow. Karisoft grew out of Al Karimi’s IT company in 2002. The end result was after a long evaluation of the PSA market, a simple, easy to use and CUSTOMIZABLE
solution that combines 95% of the necessary features, functionality and integration IT companies use most. However, each company does have their uniqueness, so we are able to build and create an interface that has the look and feel independently for each client and do so at NO cost to them. We hit the market in 2008 and are talking to Autotask and ConnectWise customers daily. We also offer a both Hosted and In Premise models at a affordable “fixed” monthly cost that includes unlimited user licenses, support and training. We’re the new kid on the block. Keep the content coming.
In terms of the WIP thing, I completely agree. Knowing how much billable activity I have in the pipeline allows me to better forecast my revenue and get advanced warning on cashflow. It’s true you don’t need WIP if every dollar you bill is on recurring services. But we, and almost every MSP I know of, has a fair amount of project work, and getting my WIP reports are essential.
Hi, Evan… if you are talking to Autotask customers every day, then I’m sure they are telling you that we have several ways of getting critical Work In Progress (WIP) information… including through both Project Reports and Contract Reports.
John, we (all of us service providers) need to be able to track WIP regardless of how much of our revenues come from recurring services. The largest single component of our inventory is employee time, regardless of how it is billed (hourly or by device). Reconciling time (and WIP) is only way we can make sure all time has been entered and accounted for, and all billable time has actually been billed. Accurately accounting for all time is also a necessary component in measuring employee productivity. Again, this is true regardless of whether you bill by the hour, by the contract, or by device.
Hi VarGuy…
Good to link up with you again in Dallas. I used to be one of these guys that never saw the value in a PSA tool. Now, I have changed by direction. A PSA solution is critically important platform on which to build your business. My firm Bulletproof InfoTech as elected to build our business on ConnectWise and we have found the product to be exceptional. Plus the interaction with Arnie and Jeannine has been wonderful. They are not a vendor, they are our platform specialists and they play a critical role in the success of our business.
Cheers mate
Stuart Crawford
Calgary, AB
http://www.bulletproofIT.ca
It’s tough for MSPs to integrate PSAs into their businesses. Especially smaller MSPs and one-man MSPs.
http://www.mspbusinessmanagement.com/blog/use-solid-professional-services-automation-system-simplify-billing
Nathan@11: The VAR Guy respectfully disagrees with your comment. There are multiple versions of PSA that can get small VARs and MSPs going on the path to success…
-TVG
So it’s an interesting comment about “labor is your inventory”. Actually, if you’re a large IT solutions provider working on larger multi-phase projects, labor and product are your inventory (and you could even make an argument that 3rd party maintenance agreements are inventory as well) and PSA software solutions only do a good job on the labor utilization portion. I’m not talking about “stock” I’m talking about customer assets, hot stock inventory, rental inventory and the coordination between service deliverables and squipment deliverables. Progress billing and “WIP” go hand in hand. Break fix shops don’t need to track WIP, nor do the “quote it, ship it, install it and bill it” projects, but for a large multi-stage project, if you’re not tracking WIP, then how exactly are you tracking mid-project profitability? The next generation of solutions for the IT solutions provider are services resource planning (SRP) solutions, which track everything: labor, product, and support, not just Services.