Top Five Financial Benefits of Managed IT Services
It can feel like a never-ending challenge for SMBs trying to find more ways to cut expenses. Since the ultimate goal of cutting expenses is increasing the business bottom line, an alternative strategy is to spend the same budget in a way that reaps greater benefits. One area where this is very possible is in IT spending.
IT costs can be found in pretty much every area of a company’s operations. Instead of only trying to reduce these costs, SMBs can also find more effective ways of utilizing IT spending, with the goal of making a real impact on the bottom line.
One example is employing the services of a managed IT services company. Among the many benefits of using these kinds of services, the financial benefits may perhaps outweigh them all. Here are the top five financial benefits of using a managed IT services provider.
1. Lower Cost of Ownership
Declining IT budgets over the last few years have forced many organizations—particularly in the SMB sector—to “make do” with older equipment and IT systems in order to save money. While there is an immediate cost savings, this can cost the organization more in the long run. Older equipment and systems are more likely to experience interruptions, leading to loss of productivity and a possible reduction in customer trust.
In addition to the above, equipment costs are only the tip of the expense iceberg. Research shows that a computer’s base price typically represents less than 20% of its Total Cost of Ownership (TCO), with technical support, maintenance and labour costs accounting for the remaining 80%.
This is where many companies find tremendous benefit from managed IT services. A managed IT service company can provide more value for the money spent on the remaining 80% of the TCO, effectively lowering the cost of technical support, maintenance and labour.
2. Predictable Monthly Costs
The IT investments listed above all come with additional peripheral costs: storage, training, adoption, as well as routine maintenance such as security fixes, software and system upgrades. In addition, there are unplanned emergency expenses, which can siphon funds away from technology upgrades. These potentially leave an organization vulnerable to security issues, particularly if there is no longer money in a particular budget. Just imagine the data breaches that could occur when patches are applied late, or not applied as recommended.
It is almost impossible to budget for such costs. They may fall under one or two budget lines, but in many instances, costs get buried with other operating expenses. This makes it difficult to assess what a system is actually costing.
By outsourcing IT to a managed service provider, a company can break down its costs into fixed monthly payments, knowing that the essentials are covered while lowering the likelihood of the unpredictable costs. Budgeting is easier because expenses can be allocated on an annual basis instead of under emergency conditions. Now the company is in a position where it can proactively work towards IT system improvement instead of only cleaning up the problems.
3. Affordable Access to Advanced Technology Expertise
IT expertise has moved well beyond that of a generalist. Today’s complex IT environments require a broad array of specialized knowledge, from cloud-based services, mobility and big data, to automation and virtualization.
It is extremely difficult for inhouse IT teams to provide these kinds of expensive, solution-specific skills, let alone stay current with the latest trends and best practices.
The cost savings on IT support services alone are worth the monthly fee typically charged in a managed IT services agreement, however there is one huge additional benefit.
As soon as a contract is signed, the organization gains the experience, research power, and in-depth knowledge of a much larger array of IT experts— resulting in more precise guidance, support, and service they would otherwise be paying thousands of dollars for through hourly rates. Plus, a flat-rate IT package plan can be easily adjusted as IT needs grow, or change.
4. Reduction in Unplanned Downtime
For SMBs, business priorities almost always start with the customer. When a network fails, or is unreliable, revenue pipelines are interrupted, and customer trust declines rapidly; not to mention frustration among employees that can turn into faster turnover or general dissatisfaction. All the above are extremely costly to a business.
Partnering with a managed IT services provider improves network uptime and ensures that business interruptions such as power failures and/or security breaches are reduced to a minimum.
With the kind of remote monitoring and maintenance provided through managed IT services, the organization can be assured that their critical systems will have high availability, while reducing, if not completely eliminating, the financial impact of unexpected downtime caused by IT failures.
5. Increased Productivity
There isn’t an SMB out there that hasn’t lost valuable time from employees trying to resolve a computer or software issue, or fix equipment that isn’t functioning as it should. In many instances, the person doing the troubleshooting is not even IT staff, but a tech-savvy employee.
By outsourcing user support activities related to the organization’s IT environment to a managed service provider, non-IT staff members can remain focused on their primary function. Additionally, if the organization has internal IT staff, they can work on more critical inhouse projects, while the managed IT services provider fills in the blanks.
Additionally, when all the previously mentioned benefits are combined, the overall boost in productivity can result in a massive improvement to the business bottom line.
The Numbers Speak for Themselves
More and more SMBs are reaping the financial benefits of managed IT services. According to a 2018 study on tech buying trends, 53% of SMBs have worked with a managed IT services provider and that number is on the rise.
While managed IT services can provide big savings, organizations need to ensure that when they hire an IT provider the decision isn’t primarily based on pricing. Careful consideration needs to be given to the level of expertise and experience that provider is bringing to the table.
At Outsource IT, we are dedicated to helping business organizations get better value for their IT investment. With extensive experience in a variety of niches, our top-notch technical team makes it a point to adhere to our motto “Being Exceptional is the Expectation”.
Contact an Outsource IT account manager to learn more about our managed IT services offerings today.