Top 5 Key Performance Indicators for Service Managers in IT MSPs

Service Managers play a pivotal role in ensuring service delivery and maintaining customer satisfaction. Just as Account Managers are crucial for nurturing customer relationships, Service Managers are the linchpins of operational efficiency and service quality. In this blog, we’ll explore the top five Key Performance Indicators (KPIs) that every Service Manager in an IT MSP should monitor for success.

(You can read about the Top 5 KPIs for Account Managers in IT companies in a previous blog.)

1. Ticket Resolution Time
   The average time taken to resolve a ticket is a direct reflection of your service team’s efficiency. This KPI is critical as it impacts customer satisfaction and reflects on your team’s problem-solving capabilities. A lower ticket resolution time is always the goal, indicating swift and effective service delivery.
2. First Contact Resolution Rate (FCRR)
   This metric is a testament to the competency of your service team. A high FCRR means that most issues are resolved during the first interaction, leading to increased customer satisfaction and operational efficiency. It also implies that your team has the necessary knowledge and resources to address issues promptly.
3. SLA Compliance Rate
   In a field driven by Service Level Agreements (SLAs), adhering to these set standards is non-negotiable. The SLA Compliance Rate measures how often your team meets the agreed-upon response and resolution times. High compliance rates signify reliability and adherence to commitments, both crucial for maintaining customer trust.
4. Customer Satisfaction Score (CSAT)
   Directly linked to the service quality, CSAT scores are obtained through customer surveys post-ticket resolution. They offer invaluable insights into how customers perceive the quality and effectiveness of the service provided. Regularly high CSAT scores are indicative of a service team that not only resolves issues but also delivers a positive customer experience.
5. Technician Utilization Rate
   Efficient use of your technical team’s time is key to profitability and service quality. This KPI helps in assessing how well your resources are being allocated and utilized. It’s calculated by dividing billable work by total available work hours. Optimal utilization rates mean your team is engaged effectively, neither overburdened nor underused.

Honorable Mention: Tickets Over X Days Old

Before wrapping this blog up, let’s discuss a KPIs that is great to have but didn’t quite make it to the Top 5 list. It’s the “count of tickets over X days” KPI. If you are SLA-driven, you may consider this a lower Operational Maturity Level (OML) KPI, however I would argue it is not. Every KPI in your company should in fact be split into two KPIs: the primary KPI and the “monitoring” KPI. The monitoring KPI is used to validate the primary KPI is not being gamed.

Gaming KPIs is par for the course in most organizations. This is because KPIs drive behavior, and so your team will align with the KPI — even if the outcome is not good. Take for example the sales KPI of “close $10k in revenue per month.” Great! Except a smart sales exec will close the easiest deals possible to get to that KPI. You aligned them to the KPI, and so they will meet the KPI, even if it’s not what you want. So the “monitoring” KPI would be “average transaction amount is $5k.” Here, you have re-aligned sales to close larger deals while hitting your primary KPI.

For a helpdesk, the SLA KPI will throw your team off the correct path. Why? Because they will ignore tickets that have already failed the SLA! Why would your helpdesk work on tickets that already violated SLA if their goal is to hit their SLA KPI? It’s too late on those out-of-compliance tickets, so logically they should not work them. So, you need a “monitoring” KPI that ensures your total ticket count of a certain age is never exceeded, and that captures tickets that are already out-of-compliance.

Conclusion

For Service Managers in IT MSPs, these five KPIs offer a comprehensive view of team performance, customer satisfaction, and operational efficiency. By focusing on these metrics, you can ensure your team not only meets but exceeds service expectations, paving the way for sustained growth and success in the competitive IT MSP landscape. Remember, the goal is not just to resolve issues but to do so in a way that reinforces customer trust and showcases the prowess of your service team.