The Benefits of Managed IT Services
According to IDC’s Business Value of Managed Services whitepaper, businesses can generate 224% in return-on-investment (ROI) within 3 years of using managed IT services. In this article, we’ll take a look at how through 7 specific business benefits of managed IT services.
7 Benefits of Managed IT Services
1. Mitigate Risk
The cyber threat landscape is always evolving, which makes it difficult for businesses to keep up. However, cyber attacks and data breaches are incredibly costly.
According to Norton, the average cost of a data breach to companies worldwide is $3.86 million. Likewise, 40% of small and medium-sized businesses (SMB) suffer over 8 hours of downtime as a result of cyber attacks (Cisco). 60% of SMBs close within 6 months of an attack (Inc).
By working with a security-first IT Managed Service Provider (MSP), your business can get all of its cyber security needs ‘out-of-the-box’ so to speak.
Not only will the MSP cover 24/7/365 asset monitoring, patching, SOC, and other proactive measures, but it’ll continually invest in improving its IT security technology and practices. In effect, the MSP will keep you at pace with emerging cyber threats.
The MSP will also provide resiliency support through disaster recovery and business continuity services. So, in the case of an attack or critical error, you can restore your day-to-day business activities in short order. It’s end-to-end coverage that gives you peace-of-mind.
2. Cut Downtime
According to the same IDC whitepaper we cited above, unplanned downtime costs business owners $58,118 per 100 users. Each employee loses about 12.4 hours a year due to server downtime and 6.2 hours a year as a result of network downtime.
Overall, downtime had cost 200 businesses $26.5 billion (Information Week). But with the support of an MSP, IDC found that businesses cut their downtime by 85%.
3. Cut Infrastructure Expenses
Through Managed Services, businesses slashed their IT infrastructure costs by $146,801 per 100 users (IDC). The ingredient to achieving this has been moving away from large Capital Expenditure (CAPEX) and, instead, adopting fixed monthly Operational Expenses (OPEX).
One way of understanding these cost savings is by thinking about how many businesses bought on-premises server infrastructure. The on-prem hosting arrangement had involved large upfront CAPEX for the hardware, licensing, installation, etc and recurring costs for maintenance.
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By moving to the cloud, these businesses only have to pay the cloud service provider (CSP) for the cloud computing resources they need. You don’t have to worry about the infrastructure — you only pay per month or year for the right to use the CSP’s servers.
While not CSPs, MSPs help businesses control IT infrastructure costs in a variety of ways.
The MSP itself invests in a lot of tools and systems (e.g., ITSM, next-generation firewalls such as Fortigate, custom integrations and monitoring, and much more) that it can deploy to your business. You simply pay an OPEX for using them, but the MSP invests in upgrading and maintaining those technologies.
Overall, MSPs will help reduce IT infrastructure costs by up to 24% (IDC).
4. Improve ROI from Infrastructure Investments
IDC’s report also noted that businesses saw a 42% increase in productivity while working with an MSP, with total productivity gains at $20,155 per 100 users every year.
In addition to productivity gains, MSPs also bring their own pool of IT expertise. This empowers businesses to leverage skills and experience they’d otherwise have trouble hiring themselves.
5. Avoid Surprise IT Costs
By working with an MSP on a flat-fee model (i.e., one all-inclusive price per month/quarter/year), you can eliminate surprise IT costs and cost variances. So, instead of getting billed by the hour or minute for help desk services, the MSP charges one fee. This makes IT budgeting easier and costs more predictable.
The other aspect to this is the benefit of moving away from CAPEX. By nature, CAPEX is a risky approach because you need to amortize or recoup that cost over the long-term.
But it’s never a guarantee. On the other hand, you can adjust your OPEX based on your needs; if you have fewer employees to support, you can ask the MSP to charge for fewer seats.
6. Improve Productivity
In its report, IDC noted that businesses reported annual productivity benefits of up to $229,511.
You’ll get these productivity gains through a number of ways.
First, by minimizing downtime, your employees become more productive as they’re not idling due to non-functional equipment or applications.
Second, by deferring some IT work (e.g., patching, monitoring, etc.) to the MSP, your internal IT team has more time to work on strategic IT or revenue-generating projects (e.g., development).
7. Leverage IT Experience
The price of a full Managed Services package is typically the same as the cost of a full-time employee, if not less. However, for that price, you’ll have access to a vastly deeper pool of knowledge and experience compared to that one new employee.
Besides providing monitoring and Managed Services, certain MSPs, such as Fusion, go the extra step of helping companies align IT strategies to meet their business goals.
You basically get the key functions of a full corporate IT department — e.g., application analysts, system administrators, director of IT, etc. — without paying the full cost of one.
It’s not just IT leadership, but you get actual support services through planning, project management, getting executive buy-in, and implementation. Basically, this kind of MSP
works with you as though it was your internal IT department.
Don’t Underestimate the Importance of Managed IT Services
The cumulative impact of these benefits results in businesses achieving up to 224% in ROI through Managed Services in 3 years.
In direct value terms, this could amount to up to $274,326 in gains per 100 users (IDC). In fact, IDC notes that businesses may start seeing returns in as little as 6 months.
Generally, there’s no doubt Managed Services generate cost savings for businesses.The challenge is in understanding how MSPs offer their services and, just as importantly, finding the right pricing model.
Sick of surprise IT costs? Then get Fusion Computing to simplify your budgeting and help you minimize downtime and other IT problems. Contact us today for a FREE consultation.