Insightful and Workflow Analytics: Measuring Activity vs. Actual Value for MSPs

[00:00:01] A manager opens a report showing how much the team uses AI, the kind of report an MSP can now resell at a 30% partner discount. Nearly half of workers admit they exaggerate exactly that number. And in McKinsey's research, barely one leader in 10 says their organization has rebuilt its work around AI, the kind of change that would give the report something real to measure.

[00:00:28] This is the Business of Tech. I'm Dave Sobel. The channel has decided AI is its next big revenue line. The evidence about what makes AI pay hasn't caught up. We'll start with Informa's MSP501 survey, more than 600 managed service providers. 57% expect AI to be among their biggest revenue gainers over the next 12 months. A year ago, that number was 37.

[00:00:57] 91% now offer or use AI. And about a third expect their AI revenue to grow by more than 20%. Only managed security ranks higher. Now look at how those same providers describe their own use of it. 54% name employee productivity as a key internal use. 35% name reducing repetitive work. Those are tools in people's hands. They are not a business that runs differently.

[00:01:26] That difference is the one IHL Group President Greg Busiek put in front of channel partners at Blue Star's Vartec event as managed services journal reports. He cited McKinsey research. Only 11% of leaders surveyed said their organization had reached what McKinsey calls reinvention. Redesigning roles, workflows and operating models around AI. In that group, 48% report realizing enterprise value.

[00:01:54] Among companies that simply give employees AI tools, it's 13%. The ones that rebuilt the work report value nearly four times as often. And McKinsey notes it deliberately recruited more advanced companies. So it warns that 11% isn't a market-wide estimate. Even in a sample tilted toward leaders, about one in 10 did the redesign. Nearly half of those got value.

[00:02:22] Most of everyone else didn't. The chief executives say the same thing from the top. PwC's annual survey of 4,454 CEOs across 95 countries found 56% have seen no significant financial benefit from AI so far. One in eight said it delivered both lower costs and higher revenue.

[00:02:47] Those were two to three times more likely to have embedded AI extensively across the business. So put the three side by side. The channel's AI forecast is climbing fast. The redesign that produces measurable value is rare, even among leaders McKinsey went looking for. And most CEOs can't point to a return. The forecast is built on adoption. The returns show up where the work was rebuilt.

[00:03:16] Those are not the same number. So if the returns come from rebuilt work, what are all those AI programs actually measuring? If you're listening to this and haven't hit follow yet on Apple Podcasts, search Business of Tech. It takes five seconds and you'll get the next episode automatically. This episode is supported by Mail Protector.

[00:03:39] One of the things I keep hearing from MSPs is that they want email security from a vendor focused on MSPs, not a relationship where you're wondering what the roadmap looks like after the next acquisition or where you fall behind enterprise clients. Mail Protector is independent, partner aligned, and to reduce the ticket friction that eats up their day. In a market where trust matters more than ever, that's a real differentiator. Visit MailProtector.com to learn more.

[00:04:09] When the work hasn't been rebuilt, there's no new outcome to point at. So leaders point at the one thing they can see, whether people are using the tool. That substitution is the whole problem. A redesigned process gives you a result to measure. A proposal out in a day instead of a week. A ticket closed without a second touch. A tool handed to the old process gives you a usage number. And once usage is what leadership watches, usage is what people produce.

[00:04:40] McKinsey reaches for an old comparison. When factories first swapped steam engines for electric motors, they kept the same floor plants, the same line, the same management, and productivity barely moved. The gains came only after they rebuilt the factory around the motor. Visors surveyed a thousand full-time U.S. workers on exactly this. Visors sells workforce analytics software, so weigh it with that in mind.

[00:05:06] 48% said they have exaggerated their AI usage or expertise to colleagues or leadership. 45% said they feel pressured to use AI even when they're not confident using it well. Nearly 60% are unsure what their employer's plan for AI is. Visors' own conclusion is that the driver of what it calls performative AI use is a lack of trust in leadership.

[00:05:35] Pressure to use it, no plan for what the use is for, and nearly half of the people surveyed shading the number. That's what a usage target produces. You might reasonably say that some usage is inflated, but most of it is real, and real usage is still productivity. That's the assumption Forrester takes apart.

[00:05:56] Writing about content and creative teams, a Forrester analyst describes AI making an individual employee more productive while making the organization less efficient. The illustration. If AI saves one employee 20 minutes, but creates 30 minutes of work for others downstream, that's not a productivity win. The first phase of adoption, the analyst writes, was about individual productivity.

[00:06:19] The harder phase is the whole workflow, including the work AI created for everyone downstream. So even honest usage measures the wrong thing. It counts the 20 minutes at one desk and misses the 30 at the next. In plain terms, without a redesigned process, there's nothing to measure but activity. Activity gets performed when it's watched, and it misleads even when it isn't.

[00:06:45] Which makes the tool that watches activity the easiest AI product there is to sell. And somebody now sells that tool to you, so you can sell it to your clients. Start with Insightful. At MSP Summit, it launched a partner program that gives managed service providers the full customer lifecycle for its workforce analytics platform. Installation, onboarding, support, and billing at a 30% partner discount.

[00:07:12] As Telecom Reseller describes it, the platform shows a business how employees spend their time and which applications they use. On its own product page, Insightful lists an AI adoption report. A view of how AI tools are being used across teams. That's the usage number, packaged, discounted, and ready for your catalog. Telecom Reseller's caution is a fair one. There has to be enough customer demand to justify adding it. The supply side is betting the demand arrives.

[00:07:43] Now look at where that number lands. The OECD surveyed more than 6,000 firms across six countries on software that instructs, monitors, or evaluates workers. 67% of U.S. firms use software to sanction poor performance. In the four European countries surveyed, it's 4%. 72% of U.S. firms track how fast people work. Two cautions. The field work dates to 2024, and managers answered, not workers.

[00:08:12] But the finding that matters most for you is a different one. The OECD says most of this software isn't AI and isn't labeled as monitoring at all. It's the ordinary business stack, the HR system, the project tracker, the time tracking tool, that picked up a scoring function along the way. That's the stack you already run. And in the American workplace, a measurement in front of a manager is very often a measurement used on an employee.

[00:08:40] So a usage report you install doesn't necessarily stay a report. It can become a ranking of who performed AI most convincingly. And the OECD found that among U.S. managers who acknowledge collecting worker data, 9 in 10 say workers can opt out, and more than half say workers can't request corrections. If you install it, you're the one holding that data. So here's the choice. Sell the usage meter.

[00:09:08] Clients who never rebuilt the work will ask for it. It's discounted and it renews. Except that you are now keeping score on a number nearly half of workers admit they shade. Or decline to sell AI measurement that isn't tied to a process someone actually rebuilt. And sell the before and after on one changed workflow instead. How long it took, what it cost, and how often someone had to fix it.

[00:09:37] Before you make that choice for a client, there's a test to run on your own shop first. I pay attention to what MSPs say in the communities where they're honest. Not on a conference stage. A year ago, everyone wanted to talk about AI. Now the question's changed. It's how do I make money on this? That's why PAX8 is talking about managed intelligence.

[00:10:05] Not just the technology, but also the business model around it. Automate the work, free up the capacity, build for the outcome. All of it running on the PAX 8 marketplace. Because the MSPs who figure out the charging part, not just the using part, the charging part, those run the next decade. 47,000 are already there. PAX8.com That's PAX, the number 8, dot com.

[00:10:35] In events, Ninja One has a free on-demand webinar on making your security hygiene work visible to clients. That's what to measure and how to show it at a QBR. Link is in the show notes. Why do we care? Because the same survey that shows the channel forecasting AI revenue shows most providers using AI the way their clients do, as a productivity tool on an unchanged process. Before you sell any one before and after, produce one.

[00:11:05] Pick one recurring workflow in your own shop, proposals or onboarding, and record how long it takes and how often it gets corrected. Rebuild it, measure again, and that one number is the one demo a client can't get from a vendor. So what to consider? Pick the workflow by what it costs you, not by what AI can touch.

[00:11:29] BusexTest, as Managed Services Journal reports it, is any recurring activity that eats more than four hours a month. Choose one with an outcome you can count, like proposal turnaround, days to onboard a client, or how often scope or pricing gets corrected. Write the baseline down before anyone changes anything. Count the minutes at the next desk.

[00:11:55] Forrester's 20 minutes saved, 30 minutes created illustration is the trap for your own measurement too. Time the whole workflow, including the review and rework the next person does, and include what the tools cost. If you skip that, you've just built the activity number you declined to sell to a client. Don't put your own team on a usage meter. If you won't sell clients a report that scores people on how much they use AI, don't run one internally.

[00:12:26] Measure the process, not who opened the tool, or you'll teach your own technicians the behavior Vizier found in nearly half of workers. If this chunk continues, by the next MSP501 survey, the AI revenue this year's respondents forecasted will either be booked or it won't. The providers whose forecast held will be the ones who can show a rebuilt workflow of their own with a measured before and after.

[00:12:54] This is the business of tech. Want to go deeper than the news? The Small Biz Thoughts community is where MSP owners and operators work on the business, not just in it. Member meetings, a deep resource library, and courses through IT Service Provider University. Everything you need to run the practice you actually want. Join us at smallbizthoughts.org. Interested in advertising?

[00:13:21] Head to mspradio.com slash engage. The Business of Tech is written and produced by me, Dave Sobel, under ethics guidelines posted at businessof.tech. Thanks for listening. I'll see you on the next episode. Part of the MSP Radio Network.