Managed IT Services: Cost vs. Value
Managed IT services costs vary depending on the IT provider’s experience and breadth of services. While some IT firms may advertise offerings at a surprisingly low rate, it’s essential your business consider the IT consultant’s ability to align the technology you use with your business goals.
Ask the following questions when considering IT outsourcing costs:
- Does the managed IT services provider offer scheduled business reviews?
- Does the IT outsourcing provider reduce unexpected IT costs via proactive IT planning and budgeting?
- Does the managed IT services provider offer vCIO (Virtual Chief Information Officer) services?
- Does the IT solution provider maintain consistent service fees and results?
- Do the IT provider’s current and former clients confirm the managed IT services company’s ability to meet its SLA standards?
- Does the IT outsourcing provider perform a thorough assessment of your IT environment before becoming a partner?
- Does the managed service provider (MSP) have a ticket-priority system in place?
If you answered yes to the above questions, you’re likely considering a managed IT services provider with a higher operational maturity level (OML), thus, a higher average cost for services.
While the upfront costs may shock a company in need of immediate hardware replacements or IT projects, the long-term benefit of a reliable IT environment can result in increased productivity across your business.
Average managed IT services cost in 2017
One of the most significant challenges IT managed service providers face is distinguishing themselves from break-fix IT providers. This is primarily because of the confusion between IT outsourcing, managed IT services, and IT staffing, IT consulting, and so on.
While these terms overlap, a true managed IT services offering cost will range from $120 to $175 per user, per month.
IT consulting rates below that range generally lack the maturity of processes and level of proactive planning necessary to optimize your IT environment. In addition, they’re likely lacking the more integrated line-of-business applications that accompany a higher-priced IT consultant. Managed services costs above that rate without special services included are likely inflated and should be thoroughly considered before purchasing.
Managed IT services cost vs. value: Are managed IT services worth the cost?
When we talk to companies considering an outsourced IT solution, naturally, their first concern is justifying the cost of managed IT services.
Kaseya’s 2016 Annual MSP Global Pricing Survey found managed IT service providers with more expensive offerings generally exhibited higher rates of growth than their competitors. Though it’s important to avoid overpaying for services, a lower cost provider is likely to deliver lower level services than their more expensive competitors.
However, while more expensive managed IT services correlate with the IT firm’s business maturity, it does not determine the value of the offering.
As stated previously, a managed IT service provider’s value is generally synonymous with its OML.
An IT provider with a solid foundation of back-end processes and wide pool of positive customer referrals is likely more experienced and capable of proactively managing your company’s IT environment.
A mature managed IT services provider will generally exhibit more stability and longevity than their competitors, in turn, providing more stability for your business.
In addition, hiring and managing a team of IT professionals who possess the knowledge and resources of a managed IT services provider can cost your business more money than outsourcing IT in the first place.
Your business will have more than just the IT team’s salaries to consider when calculating costs. Recruitment, training, IT certifications, payroll, benefits, 401(k), and advancement opportunities are all factors that must be considered. These costs can accumulate quickly, and when IT team member decides to leave your organization, your business will lose the investment and knowledge associated with the individual.
An optimized IT environment engineered by a managed IT services provider offers value-added cost savings and increased productivity not easily obtainable from your own IT staff. The following sections outline the various ways MPSs can add value to your IT environment and business processes.
Managed IT services can reduce business downtime
Business downtime is a common IT problem plaguing small to medium size companies with limited IT resources and support.
Most people associate downtime with server crashes, network invasions, Internet outages, etc.
However, downtime accumulates in a variety of different ways and your business may be suffering more productivity loss than you think.
Business downtime includes any period when the performance of your employees is inhibited by technology deficiencies. Slow Internet connections, data loss, tracking documents, and lagging applications are only a few of the everyday IT issues that result in downtime.
A capable IT outsourcing provider should work with your business to design an IT strategy that protects against the IT roadblocks inhibiting your business goals. While hardware replacements and IT projects can seem costly at first, they can save your business time and money by facilitating a productive and available work environment for employees.
Managed IT services can provide availability and expertise
Most small to medium size businesses with an in-house IT department are restricted to the availability and skill set of those few individuals.
It may be convenient to have “George” the IT guy at your beck and call, but what if George goes on vacation, gets sick, or suffers an accident that renders him unable to work?
Best case, George can remotely handle any IT emergencies that arise, but there is still a plethora of network responsibilities to be managed, and there’s no one else with the experience capable of handling these tasks.
A capable managed IT service provider will have a detailed record of your company’s IT environment and an IT team with ready access to your documented needs and network history.
This way, if an employee unexpectedly leaves the organization, their knowledge of your business does not leave with them.
The CIO level consulting knowledge and IT expertise are the primary elements of IT outsourcing that distinguish MSPs from break-fix firms.
Chief Information Officer services are necessary to help your business build a productive IT environment and an inherent component of a comprehensive managed services offering. If your company is dependent on one or two individuals to handle your IT strategy and needs, you may not be receiving a full picture of your IT situation.
Consider the following questions to determine if your IT support is supporting your business needs…
- Does your business suffer from delayed IT support?
- Do your users report the same IT issues again and again?
- Has your business been presented with unexpected IT costs?
- Is your network often slow or down?
- Have your users suffered from data loss?
- Are your hardware and applications outdated or in need of patches?
- Do you only hear from your IT team when a problem occurs?
If you answered yes to any of the above questions, your business may be lacking the proactive IT support it needs to reach your goals or simply maintain operations. Contact an Aldridge firm representative today to schedule a free consultation. Or, download our brief checklist, “8 Signs You’ve Outgrown Your IT Solution.”