How Can the FTE Model Compete with the MSP Model?
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This question comes up a lot, but often in reverse. We talk about MSPs (using the term as a generic catch all, we mean ITSPs inclusive of MSPs) and how their model is superior to having in house IT staff as a result of the larger business rule that you always in source your core competency and outsource everything else (with obvious scale exceptions in specific cases.)
But I want to ask it in reverse, because I think it might make it easier to approach. Given the things that an MSP (or ITSP) can do based on their larger scale and IT being a core competency, what situation would arise that would allow an FTE to compete?
Key: You cannot use "overpriced" or "does bad work" or any other equally applicable problem to describe either situation. We aren't talking about different people, but different modes of acquiring the same IT. Keep it apples to apples, assume the same people hiring or acquired through two different approaches, not different people. MSPs can be good or bad, cheap or expensive, just as FTEs can be. We are discussing the models, not experiences with bad hiring or vendor selection.
Some key facts:
- MSPs will always have equal or greater scale than FTE.
- MSPs is outsourced, but does not imply off shore, non-local, or even off site. MSPs can be 100% dedicated resources, 100% on site just like an FTE can be.
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MSP's won't always have equal or greater scale than a FTE. I think it would be better to say "sometimes". Perfect example, if I started a new MSP start up today, from scratch, there is no way I wouldn't cost more than an established and furnished MSP.
We're talking from scratch! If I have no hardware, software, tools, other human resources to delegate to, and no processes in place other than what I came out of school with and what I picked up from working various jobs. It would cost WAYYY more to get established.
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@krisleslie said in How Can the FTE Model Compete with the MSP Model?:
MSP's won't always have equal or greater scale than a FTE.
It's part of the definition. It's literally impossible to have an exception here.
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@krisleslie said in How Can the FTE Model Compete with the MSP Model?:
Perfect example, if I started a new MSP start up today, from scratch, there is no way I wouldn't cost more than an established and furnished MSP.
Correct, you'd be an inefficient MSP. but the least efficient MSP, in the worst case scenario, doesn't fall below the FTE line, it only approaches it. The MSP model is always equal or better, no possibility for exceptions.
Sure, there are better and worse MSPs, but you are using "isn't perfect" as a distraction from the real "is still better."
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@krisleslie said in How Can the FTE Model Compete with the MSP Model?:
We're talking from scratch! If I have no hardware, software, tools, other human resources to delegate to, and no processes in place other than what I came out of school with and what I picked up from working various jobs. It would cost WAYYY more to get established.
Not compared to an FTE. It's equal. And if you ever get to more than one client, it's better. That's the key... it's never worse, the worse case is equal, all other cases are better.
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How does remote MSP handle the physical aspects of IT?
Examples:
- Installing new physical servers, replacing HDDs, adding new server components, upgrading physical servers
- Plugging in network cables to servers, new network cables from patch panel to switches, adding network components to rack and servers... switches and NICs
- Replacing a users compter, imaging a users computer, replacing failed components on users computer
- User BYODs, Outlook/software setup on phones, tablets, etc.
- User station setup, desktops, monitors, etc... location moves, scraping components
- ...etc... the list is actually pretty big
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@obsolesce said in How Can the FTE Model Compete with the MSP Model?:
How does remote MSP handle the physical aspects of IT?
You specifically added "remote" when I explicitly stated you couldn't add artificial or reversible constraints with remote being one I mentioned in the OP.
Reverse it, what if the MSP was on site and the FTE were remote? How would that remote FTE handle those things when the MSP is on site all the time?
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@obsolesce said in How Can the FTE Model Compete with the MSP Model?:
- Installing new physical servers, replacing HDDs, adding new server components, upgrading physical servers
- Plugging in network cables to servers, new network cables from patch panel to switches, adding network components to rack and servers... switches and NICs
- Replacing a users compter, imaging a users computer, replacing failed components on users computer
- User BYODs, Outlook/software setup on phones, tablets, etc.
- User station setup, desktops, monitors, etc... location moves, scraping components
- ...etc... the list is actually pretty big
In apples to apples, which is the only case that is applicable to discuss, the MSP does all these things identically to the FTE. If the FTE is on site, the MSP is on site. If the FTE is remote, the MSP is remote. So while we can't know the answer without more specifics to a use case, what we CAN say is that very obviously... as always, the MSP can do all of this as well, or possibly better, than an FTE can.
So it continues to prove the point, the only downsides to MSPs are imagined constraints that are not part of the MSP model.
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I'm always open to hear how it would be better
i'm not a debate monkey, I'm more of an "enlighten me" kinda guy. For me personally, knowing all the moving parts and knowing how to properly use them is more important. That's wisdom. Companies usually pay for wisdom more so than only knowledge, in general.A person to person debacle between FTE vs a MSP (single individual in this case) is going to definitely be between efficiency and more importantly being effective. You could have 100 team member MSP and be efficient, but are they effective?
It will always be a philosophical difference and challenge, which is the thing is we want. In life there is rarely a one thing is always the best thing always till eternity. But that is what makes us all better, being able to adapt and change.
I totally agree with you in a case like my own, because the client I have can't afford a FTE and if he could the company would be ran totally different. So being a MSP to him saves him $$$. I know that and agree with that.
However I think what really needs to be explained so it's not a quick answer is what is more detail on what is offered vs what isn't offered between a FTE and MSP. One can't make a decision if it is better or worse with just one view.
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@krisleslie said in How Can the FTE Model Compete with the MSP Model?:
A person to person debacle between FTE vs a MSP (single individual in this case) is going to definitely be between efficiency and more importantly being effective. You could have 100 team member MSP and be efficient, but are they effective?
You are missing the point of the "model" comparison. You can't cherry pick one aspect that is arbitrary and decide that that causes a concern.
Remember, any MSP always has the option of going to one to one to match what an FTE can do. Always, no exceptions. So ANY concern you have that a different MSP approach might not be best isn't applicable, because no MSP is required to do it that way.
MSPs simply bring more options. MSPs can do any approach that an FTE can do, and potentially many more. So any "what if" that suggests that an MSPs is different than an FTE is flawed.
You have to keep the suppositions to how an FTE would be superior to an MSP acting like an FTE. Of which I can't think of any possibility of there being one.
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@krisleslie said in How Can the FTE Model Compete with the MSP Model?:
However I think what really needs to be explained so it's not a quick answer is what is more detail on what is offered vs what isn't offered between a FTE and MSP. One can't make a decision if it is better or worse with just one view.
This is what makes it easy...
FTE offers X.
MSPs offer X + more.
An MSP can (and often do) offer anything an FTE can do, including full time dedicated, full time on site, one to one, etc. But then offer loads of flexibility, scalability, and options on top of that. There's literally nothing an FTE can offer than MSPs don't offer, too. But MSPs offer so much more, in most cases.
That's my point, I don't know how it is physically possible for an FTE to compete. In the most extreme theoretical case where the pure FTE model is ideal for a client (never seen this in the real world, it's a pure theory case) then the MSP falls to the worst case of being "the same". Any variance, in any way, and the MSP improves and the FTE declines.
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@krisleslie said in How Can the FTE Model Compete with the MSP Model?:
It will always be a philosophical difference and challenge, which is the thing is we want. In life there is rarely a one thing is always the best thing always till eternity. But that is what makes us all better, being able to adapt and change.
Correct, but we know that there are models that are "never right." The the world is not one size fits all, but we often use that to excuse ignoring the obvious fact that "some sizes fit none."
This isn't a case where a single MSP approach fits all needs. It's simply realizing that the FTE approach meets no needs.
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Humby I think there is a reason and place for both. In someway, both are symbiotic to each other. A company must have ways to prove if either of the two are adding value, efficient and effective at least at the core, but each company may have other categories that "grade" someone or an entity and if they even like what they are getting offered.
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@krisleslie said in How Can the FTE Model Compete with the MSP Model?:
Humby I think there is a reason and place for both.
But based on what? If the FTE provides no possible value, only represents risk... when do we say "there is time and place for putting the company at risk without benefit?"
The answer is... there isn't. It seems reasonable to say that there is a time and a place for everything, but it's not at all true. That's just a catch phrase that sounds nice. It's a false platitude. The point here is that logically we can demonstrate that it is literally impossible for an FTE to make sense. Since they cannot add value, only risk, they can't be the right choice.
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@krisleslie said in How Can the FTE Model Compete with the MSP Model?:
A company must have ways to prove if either of the two are adding value, efficient and effective at least at the core, but each company may have other categories that "grade" someone or an entity and if they even like what they are getting offered.
No, that's not how it works. One model simply is better than the other. We can show that. The theoretical company in your example has no means to compare the two outside of this logic exercise which proves the point. Any attempt to evaluate otherwise would be introducing false, misleading artefacts that would only serve to confuse.
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Related article:
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@scottalanmiller if it can't be measured it can't be improved. But a company has to care otherwise, it's kinda a moot point. I realize I maybe looking outside of IT/MSP and in general and I'm trying not to miss your points because they definitely are valid.
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@krisleslie said in How Can the FTE Model Compete with the MSP Model?:
@scottalanmiller if it can't be measured it can't be improved.
Not all things are measurable, that's a business fallacy that is important to avoid. We can't measure, but we CAN prove that one model is inferior. There is no purpose to measuring something already known to be inferior. Knowing how much it is inferior offers no business value.
At which point you need to measure the measuring - how much money is lost by trying to measure something for no reason?
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@krisleslie said in How Can the FTE Model Compete with the MSP Model?:
But a company has to care otherwise, it's kinda a moot point.
Of course they have to care, hence the entire point here. Caring = doing the logical proof = MSP is the only valid model.
That's the basis that we are going for. We can't prove to what degree it is better, but we CAN prove that it is better. And proving that it is better is all that matters for decision making, and decision making is all that matters to the organization.
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@scottalanmiller in that model, then it assumes no company ever should have a FTE or a FTE in IT only?
