ERP027 - Offshore Support w/ James Vickery

Welcome to Evolve Radio where we explore the evolution of business and technology. The first thing I want to say is that offshoring is a skill, uh number one, and building a culture is a skill. Today I'm joined by James Vickory, CEO of I know IT and founder and CEO of Benchmark 365. James built an offshore support team to augment his own MSP business. He found the offshore strategy enabled a scaling of his business that he otherwise never would have been able to achieve. As more and more of his peers asked him about how to do it the same, he recognized a business opportunity and Benchmark 365 was born. James and I discuss his journey, some of the common resistance points around offshoring and how his team integrates with the existing MSP businesses. If you enjoy the show, be sure to subscribe on iTunes, Stitcher or wherever you get your podcast from. Also, be sure to check out the web page evolvedmt.com/podcast for show notes, links to my guests and to check out previous episodes. Now, let's get started. Today we're joined by CEO of I know IT and the founder of Benchmark 365, James Vickory. Welcome to the show, James. Hey Todd, great to meet you. Yeah, great. Thanks for coming on. So, uh we got introduced as most people do nowadays on LinkedIn and uh saw that we were both uh in the MSP space. And uh outsource service desk is something that I tend to play around with a lot for organizations that I work with that are scaling. And uh was interested in the work that you're doing. Uh you're taking a bit of a different approach in that you're actually setting up a uh white label or private label service for uh groups to leverage uh lower cost, uh higher resource capabilities in the Philippines. You want to expand on that and tell us a bit about what you do at Benchmark 365? Yeah, sure. So um, yeah, effectively Benchmark 365 is as you said, it's a private label service provider aimed at managed service companies and IT service providers around the world. Um, and I I guess the way that this came about is that um, we've had an MSP uh as you said in your introduction, I know IT which we started in 2003. Um, we started that company uh probably like a lot of a lot of service providers in that um, we didn't really know what we were getting ourselves into, but we started, we started this business and uh originally started out as break fix. moved into managed services, eventually became a cloud service provider, internet provider and voice over IP provider here in Australia. Um, that went well for, you know, around about 10 years, but we found that we were hitting some plateaus. Um, and some of those plateaus were to do with the changing market, um more aggressive competition from other MSPs, aggressive competition from software as a service providers. And what we found is that no matter what we did, even though we'd we'd kind of implemented everything that we were supposed to, we'd, you know, we bought all the products, we'd followed the the traditional per user or per device pricing models that we just weren't scaling. Um and we just reached this kind of point where labor was a big cost to us. We weren't growing, we weren't getting our sales targets and we needed to do something. Um, and so fortuitously what happened is that we ended up uh well I ended up taking a trip to to the Philippines to learn about how companies were scaling there. Um, and that's kind of how benchmark started is that for about five years we ran I know IT almost entirely offshore. Um, and had other MSPs asking us how to do it. Benchmark kind of went from there. So, in a lot of ways, uh similar to I suppose most entrepreneurial businesses, but especially within the MSP space is you were scratching your own itch in that uh you were leveraging a model in offshoring to the Philippines to support your own business and then recognized that this was probably a separate stream of business entirely unto its own. How long were you running it uh just to support your own MSP before you broke out and had this as a separate service for outside uh customers? Um, we spent four years in the Philippines, um, a really big learning curve, learning to set up an offshore structure, learning about a different culture, learning how to hire, uh train and retain people in another culture. Um, we spent quite a lot of time doing that. In fact, I lived over there with my family for a significant period of time, travel back and forth on a routine basis to really um get this working properly for us. Um, and it was around about the four-year mark that we that that people saw that we'd hit our stride, they saw that uh we were growing quite considerably. Um, and a number of MSPs came to us and IT providers came to us and said, how do we do it? The thing is when I walked people through what was truly involved, you know, um actually getting over there and actually setting up a business over there, a lot of uh IT providers shied away. They're busy, they're trying to grow their own business, they don't have time for that. Um, and so benchmark uh was born out of that. We thought, how can we offer our team and our level of scale to another MSP without them having to go through the pain of setting up an offshore team. Right. Okay, great. Um, we uh I guess we'd have to address uh some of the elephants in the room when it comes to offshoring. Uh I'm sure you've you've heard a bit of this, but often I ask people uh recently I've been looking for a VA and I've asked a few people, you know, they their experience in in offshoring VAs. And it's quite often a visceral response saying, I've had really bad experiences with it. Don't do it, don't do it. Uh so obviously, you've managed to figure this out and how this fits within your business. Uh can you maybe address um people's concerns and maybe why they've had a bad experience and how you feel that your service uh maybe cuts around that. Yeah, well, I've got a lot a lot to discuss there. So, the first thing I want to say is that offshoring is a skill, uh number one, and building a culture is a skill. Uh it's a real skill and anyone that's running a business now knows how challenging it is to hire people and to keep them engaged and to have them be effective at their role. That is universally true. The challenge with offshoring is that a lot of uh organizations say, hey, we can save some money by hiring a virtual assistant through a freelancer website. Uh or we can go to one of these outsourcing kind of uh organizations that are called BPOs and they're just going to hire someone and I'm just going to stay here where I am and they're going to be where they are and they're just going to be awesome. And that's just not true. Um any human being needs uh training, uh they need business processes, solid business processes and they need reassurance that they're doing a great job. That's true in the Philippines, it's true in South America, it's true in um any place that that you see as an offshoring uh destination. So, our experience was that we actually needed to get over there and roll our sleeves up um and actually spend time and get to know uh the people and get to find the best people and go through really good recruitment processes to find the best people. Um, so, you know, I agree with you that it is an elephant in the room and the problem is that um when you're just handing this process over to somebody else, some other company, um that doesn't understand your business, kind of like we understand the managed services industry, then it is a bit of a recipe for disaster and that's where the quality problems come from. Right. Okay, that makes sense. And um also the moving to the offshore model, was any of that driven by um either the cost or the lack of availability of local resources for you guys in Australia? Yeah, such a good question. Um, for me, I think cost certainly was a factor. Uh for us, our business was struggling. Uh this was five years ago. Um we're paying all these wages, we're having challenges with staff, we're having challenges hiring people. Uh I even remember we had a really great engineer who was a second-level engineer, he was on $70,000 a year. Great guy, worked for us for a year. Amazon uh AWS came to Sydney and they hired the guy for 140 grand. And it was like, how how are we going to compete when the bigger guys are sucking up the talent and we're training them. So we're bringing guys in at level one, level two, we're training them up and then they leave. And so that was like a constant battle and on top of that, we were trying to get out there and sell, we were trying to grow and having clients say, you know, boy, you've got, you know, got a bit of turnover there and and sort of having to address that at the same time. So, um cost and talent were both very key factors. But I learned something. It took me a little while to learn this. is that the real problem that we were having was around our process, um around around our HR process and around our um delivery process. That was the the the number one challenge and the Philippines exposed that for me during the first 12 months of offshoring. Then what I learned is that the the offshoring is a game of scale. So, whereas we only had one person that could get on the phone and dispatch, answer calls, if she had a day off, if she stepped out for a lunch, service delivery dropped, right? Because, you know, the calls weren't getting answered as quickly and the tech weren't picking up the jobs as quickly. So we thought, okay, we've got this advantage now, why don't we hire three people just to do one function? Why don't we get three people so that we have this violent execution when the phone when the phone rings, it gets answered right away. Then let's put another layer. Why don't we get five or six level one guys? So that when the ticket gets in, it gets done right away. And so we learned that it wasn't a cost so it's not a cost cutting exercise for us now, it's a scale exercise. It's about actually being a bigger company than we could possibly be in a Western market uh at at at that particular revenue level. Yeah, okay, that makes sense. Um, one of the other ones that um there may be some some push back around if you could address it as well is I've seen this as well um in the hiring process, you you tend to be a little sensitive to uh accents. And you know, being in Canada, uh we have a huge immigrant population, which is incredibly important for the growth of of the economy and for replenishing the labor market. But uh they these folks often come with um not heavy accents, but enough that it's noticeable. And some of the clients can be a little bigoted about this and you kind of have to be sensitive to um how you manage. Um, you know, someone calling themselves Jim when it's quite obvious that they're probably in in Bangalore and they're they're not uh, you know, their name is probably not Jim. Uh, how do you guys address that? Is it is it a a language training process and is that a part of the screening for the staff that you employ or is it managed in some other way? Absolutely. Um, so I love talking to a Canadian because I think culturally uh across the world, Australia and Canada are very uh aligned, uh very similar in a lot of ways. And we had this fear as well when we looked at offshoring. In fact, we even put a layer of Australian team members between our Philippines team members because I had those fears. I didn't even survey my clients about this. I just I just had these kind of uh fears in the back of my mind. Um, we discovered one thing about that uh in our particular business is that our customers were frustrating about the extra layer. So the time that it took to go from the Australian to the Philippines person that could actually fix the problem. We were getting complaints uh early on in the piece. Then one day, um, and it wasn't with my authority, but uh one of our Philippines staff picked up the phone and called the end user and we got this really positive glowing report from the client saying, I really love Mark, he did a great job. That was his real name by the way, Todd, his name was Mark. And he did he did a great job and uh why don't you just get him like to can he just gotten to me sooner before because you know, he knows what he's doing. So that was a valuable lesson um not not too long into our journey that what customers care about is the time to resolve or the time to fix the problem. They're incredibly forgiving if it's fast. They're incredibly unforgiving if it's slow. And that doesn't matter if it's a Canadian or an Australian or a Filipino that takes too long to do the job. That's that's number one. So we learned that TTR what what we call in our sector, TTR time to resolve is way more important than anything else. uh in in this fast-paced world, right? Number two though, is that of course, there's a different culture and a different um language. So let's talk about that in context of the Philippines. From uh elementary school, all Filipinos speak English. Um they learn English and they speak English. At work, they speak English, at the store, they speak English, all the signs are in English, nothing's in uh the local language because there's something like 80 different languages in that country depending on which island you're on. So people mostly speak English. Uh secondly, because the United States has been in based in the Philippines from a military and commercial perspective for the last 60 or so years, they speak with a North American accent. And it's actually quite weird to us Australians. So they they they speak more in a North American accent than the kind of that um, you know, the more the the Asian uh accent that you might expect in other parts of uh Asia. So that's that overcame that obstacle uh for us is that English is predominantly the language spoken and uh the accent is fine. Then you start to get down to kind of more the grammatical issues. So the way the way they might write something in an email or a ticket would be a little different from the way we might expect to see it in Canada, uh North America or Australia. So what we've done there is we've hired quality assurance uh uh people and we've hired trainers. So our people are put through a um a training course to learn uh proper English tone and proper English grammar. Um and then we have uh reviews of that and we have one-to-ones with our team members to ensure that this kind of aligns with the Western uh way of speaking. Yeah, okay, great. Um before we maybe move on to some of the specifics around uh the implementation in the MSP industry. Do you have any uh benchmark focuses primarily on IT service providers and managed service providers? Do you have any advice for folks that are not in the IT space and how they might be able to leverage uh something like benchmark 365 for their purposes in business? Yeah, yeah, I think that's um a good point to touch on. So, we talked a little bit before about the different ways that people look to outsource. Um, one of the ways is to jump on upwork or one of the freelancer sites and just find someone that says they know marketing or says they know accounts or, you know, some sort of administrative function. Um, that's um, that's one way to do it. That that has probably the highest failure rate. because you can't really connect with that person, you know, during your office hours sometimes, you can't really work with that person one-to-one. Uh sometimes there's some coms issues because they're home-based. Um the other option is to find a service provider in, you know, the Philippines, India, we see a lot happening in South America now as well. Um and they go and hire a person for you. What I see as a challenge for that is that that that intermediary company doesn't necessarily know your business too well. And so you're left with the management overhead. You're left with the training. They deal with the hiring and firing, that's great. Uh but you've got to train this person and you've got to kind of put a lot of effort into that. So, my advice there is to look for an intermediary that that maybe specializes in your industry. So just like benchmark specializes in IT, uh finding if you're looking for an accounts person, find an intermediary that specializes in accounts. And that's that's true business process outsourcing. So they not only give you a human that can do the job, but they give you a process for that human to follow that that um allows you to not spend so much time training and then, you know, what if they leave and you've got to start this process again. Um and just on that point, um that's where people think that this saves money, but when you add in all of that other stuff, it doesn't save money, right? So say you save two-thirds on salary, but then you've got to add another layer of management and another layer of training, and then the person leaves and you've got to go have another layer of recruitment, it's not cheaper. Um and that's that's where a lot of people go to offshoring destinations and fail because um they've picked the wrong partner to work with typically. Yeah, okay, that's great advice. Um there's sort of an underlying theme that I sense here as well that aligns with a lot of what uh I'm trying to practice and get uh the clients that I work with to to really follow is that uh people will fail without management. And it really doesn't matter what capacity they play in the business, whether or not they're local, whether or not they're, you know, remote in a different city or if they're on the other side of the planet. If you don't give them a process, you don't treat them like a peer, like someone who's a member of a team and actually manage them. Um and expect, you know, we hire smart people, they'll just do great things. And it's it's just it just doesn't work. Uh so I think It doesn't it doesn't work. Yeah. And I've got the gray hairs to show for it. Right. Um, but I I think um, actually I was listening to to something the other day where they talk about, you know, just even with Gen Y culture that um that basically whereas people that are sort of in their late 30s and 40s were happy to get a performance review once every six months. Now people require consistent reassurance, almost daily reassurance to say that they're doing a good job. And if it cost you nothing to do that, it cost you nothing to say to say to a team member, hey, I think you did a great job today. Or thanks thanks for all your hard efforts today. Um going back to the offshoring thing in cultures like the Philippines, that that's exactly what they need. They need constant reassurance and if you're trying to uh set up an offshore business or trying to freelance and you're leaving them for a week or two or three without any any any feedback or any reassurance, it's going to fail. It's absolutely going to fail. So, um, yeah, totally agree with you. Yeah. All right, great. Uh so we'll we'll talk a little bit about some of the specifics of uh the MSP industry as well. Um some things that I tend to look at when I'm evaluating some other uh outsource providers that uh are um usually distributed across either North America. I've come across some in the UK as well. Um and one of the things that I definitely like to know is how do you feel that your team fits in with an existing business? Should it be front line like you described? Is it is it an escalation point or is it just the, you know, the the knock service to offload the the asset support or maybe the after hour support? Is there a common framework that you find is is more useful or is it very dependent on the organization itself? Yeah, so maybe I'll I'll talk about the process that we go through uh to work with an MSP. Obviously, um there are a couple of criteria for us. One is that we want to work with um MSPs and IT providers that want to grow. Uh our objective is that A, we'll help you save some cost on um running your business and operational costs. And B, we'll underpin your sales efforts. So, now that you're not focusing on the phone ringing or, you know, the ticket, you know, that that looks like it's gone a bit south, um you can now focus on sales. The number one thing that MSP owners tell me is that they have no time for sales because they're too busy. They're way too busy dealing with some other crisis in the business and they don't have time for sales. Yet, they have no sales people in a lot of cases. So, who else will do sales? Who else will grow this business? And that's the challenge that I faced um several years back. Um, so that's number one criteria. Number two is that we go through a three-step process with MSPs. One is a onboarding process and that's where we figure out what is actually the right approach with that particular business. Is it um we'll we'll just tackle everything up front or is it that we'll handle certain components of service delivery? Keeping in mind that that that is our core expertise, service delivery management. Um so if an MSP has an organization of 10 or 20 techs, obviously, they want to keep those guys working on particular functions of the business and we will take on a particular function of service delivery. In answer deeper to your question, where should people start? It's often a function of size. Uh some of our partners are quite small and they they really want to focus primarily on sales and we can handle the full stack, answer the call, dispatch the ticket, first, second, third level support. And they're thrilled with that, right? Because the the the work is being delivered and they're going from meeting to meeting winning meeting winning more managed services contracts. Others uh take a different approach where they just use us for, you know, services like knock or after hour support and we work through that to um uh to to make sure that it's delivering effectively for them. So that's our I talked before about our onboarding. Then we do a pilot, so we spend 30 days just doing it the way that they want us to do it. You get to test and measure, see what works. And by the end of the pilot, we've got a good feel for where we fit in with that MSP or IT provider, and then we have an ongoing program to go from there. Um part of our commitment is that we don't lock these MSPs in. So, if they don't like it, they can stop. There's no, you know, long-term commitment to working with us. Fortunately for us, that that hasn't happened so far. We've we've been able to have a a pretty long tenure uh with our partners thus far. Excellent. Um one of the other ones that I find really important is uh tools are critical to the MSP and you guys uh are a tools agnostic organization, which is fantastic. You're not forcing people to use a particular PSA or RMM. Um but I'm curious how how do you leverage that? Um how do you manage the ticket flow and access to the documentation if uh all the tool sets are a bit different and secondly, does that cause any issues on expertise within those tool sets? Yeah, got it. Um, really big challenge by the way, so I'm glad you pointed that out. Um, we are agnostic. We're not a software vendor. We're not here to promote uh a particular tool against another tool. I think some of the products that are out there are great, although they've all got their uh their their their challenges, connect wise, auto task, um some of the RMM platforms. Um so we we take the view that we're here as a partner, we're an extension of the team and whatever tools you're most comfortable with, we will work with those tools. What we found consistently is that most MSPs run the same a very similar product stack and we've educated ourselves on those product stacks. and we've broken our team up into specializations that understand those different product stacks. Um, documentation is a big one. So, uh, if I had a dollar for every time an MSP said, you know, our documentation is not really really up to scratch. Um, we we understand that, we know because we're in the industry and so what we do is we uh part of that that onboarding process that we talked about is we do some analysis of the of the process. If there are some significant gaps in the process, we work with that um MSP to bring it up to to speed so that we can deliver effectively. Um if there's not, then we we go live and we run with it, we continue to work with the platform that they're comfortable with. I often describe documentation as a bit of a mirage. It's something that you're always chasing perfection. And I think people need to get it out of their head that you're ever finished. It's something that's always you're iterating on and you can get to a baseline where it's effective and you know, you have useful documentation versus just, you know, a lot of tribal knowledge. But I think uh you're you're chasing a mirage if you're really thinking that there's an end game in okay, we're 100% documented. Way to go everybody. It's just not going to happen. Yeah. It's not going to happen. And I think um, and this is this is a big one. I often hear uh some friction or frustration between um business owners and their technicians saying, you know, he should really update the documentation. But at the same time, he's getting smashed with tickets, right? Like so he's doing he's going ticket, ticket, ticket, ticket. I'll wait, let me stop and start and and often the text want to do it and then they get pulled aside, hey, that's not important, you know, the server is down at uh one of our clients, that's not important to work on that document right now. So they get often get conflicting messages. We've we've recognized that and again, maybe this is a function of scale, but we've put knowledge managers in our team as well. So people that are just responsible for keeping documents and configs up to date for our company. Um because we know that the most effective techs are the ones that are able to go from ticket, ticket, ticket and get the job done. Um they're never going to circle back to doing, you know, highly detailed documentation. And in a lot of cases that the customer or the client is not paying for that, right? They're not paying for someone to write uh these documents. Um they're paying for people to keep their systems up and running. So it's kind of a bit of a disconnect for us. So we we decided to insert a new role into our company to to manage that. That's excellent. I 100% agree with that. I often advise uh companies that if you're not willing to treat it as an internal project that has dedicated resources and some some sense of project management, you're not ready to do it. Uh so it's an important component. You know, do what you can, you know, scale the way that you can, but uh if you're going to get really serious about having good documentation, you need to commit to it because it won't happen magically. And if you just sort of tell people, hey, go do this, you're going to be disappointed. Couldn't agree more. Yeah. Awesome. Um well, we'll turn to the future. So, I often ask uh some guests on the show to to look into your magic ball. You know, you've been uh uh building this this business uh over a number of years. And the MSP industry, I think we would agree is ever evolving. Uh and what would you see as is sort of the long-term future of offshoring for MSPs and and what are you uh sort of building your build your business towards as far as a future vision? Woo, big question. All right. So, first of all, to me, the the whole um should we offshore, shouldn't we offshore thing is kind of it's kind of foreign to me now. because we've been doing it for so long. I just I just spent, you know, two, two and a half weeks in the Philippines. Um it's like home to me. It's kind of like just just another country with a bunch of people that want to go to work that drive cars, they use iPhones, they you know, they they have a life just like you and me from a from a day-to-day work perspective. So, it's the whole thing about should we or shouldn't we offshore, it's kind of like, well, should I buy um Canadian, you know, maple syrup, right? Like, of course, you guys make the best maple syrup. I'm going to I'm going to buy that, right? Like, and should you guys buy Vegemite? I don't know. I don't think anyone other than in Australia eats Vegemite, but but, you know, the thing is is it's weird to me. Like we we just look at business as being human. So, uh wherever we can find the best people to do the right job at the right time, that's where we're going to hire them and and to do that. And if you look at large organizations, your HPs and IBMs and all of those, you know, of course they have people in multiple countries, not just their own country. So, I think offshoring is not going to go away. It's it's here to stay ever since the internet came about, people saw the opportunity to hire people in in other locations. Um, so that's if that's a short answer, that that that's my answer is that it's it's here to stay and my advice is to absolutely go out and find people where you want to find them and where you think they're going to do the best job. I think in the Philippines, they are quite happy and love doing customer service. They love answering phones. They enjoy it, whereas in some Western cultures, we don't. They they're happy to do first and second level support. Um and actually quite enjoy doing that kind of work, whereas in some in some Western businesses, people want to move into other areas or other streams. So I don't think that's going to go away um anytime soon. Yeah. So maybe uh if I could, uh your business being uh an offshore organization is almost a secondary function. In a lot of ways, it's irrelevant to the work that you do. Is is that a fair judgment? I I yeah, I think that's a very fair judgment. Um, you know, I I did earlier on you talked about maybe some prejudices towards this and um someone said something to me once while I was having a cup of coffee, um said, you know, I just really don't think, you know, we should hire people overseas. And I said, well, you know, what sort of coffee is that? Is that is that Australian coffee? Is that American coffee? Like, everybody needs to work. Everybody deserves to have a good life. Everybody deserves to make their way into a middle class and to have a, you know, a good, happy, contented life for their family. So, I I don't um I don't agree that we should kind of like hold, you know, hold these things close to our shores at all. I think we should embrace humanness. Yeah. Excellent. Uh anything I haven't asked you that you'd you'd like to touch on? Um, yeah, no, I think look, we've we've covered it quite well. Um, yeah, on the spot on with that one. That's fair. Uh if we've covered it, excellent. Um and obviously, if uh people are interested in chatting further with you, where should they they look to connect with you, James? Yeah, so I I'm out there on social media a lot. Uh we have a Facebook page for Benchmark 365. Uh we have a LinkedIn page as well. Um but of course, just visit the website. We've put a frequently asked questions on there. We get a ton of questions. We get literally, you know, 100 questions a week and we do our best to answer them on the FAQ. Um even on the Facebook page, there's a messenger that's not a bot, so it's human man where you can ask questions um about benchmark as well. Always happy to have a chat to anyone in the industry. Um yeah, we look forward to it. Okay, and that's benchmark365.com. That's correct. Awesome. Okay, well, I appreciate your time today, James, and all the best in the future. Awesome. Thanks a lot.