Managed Services is a fancy term that means, “flat rate IT services” with a unique twist; It’s also proactive. Your IT provider has a monetary incentive to prevent problems (because you pay a flat monthly cost). This means that the less problems your business has with its technology, the more profit your IT provider gets each month. The more problems your Managed Services provider can prevent, the more money they will make.
In this article, I will tell you a bit more about Managed Services. What is the managed services pricing model? What to look for in a Managed Services provider? Is managed services better than break-and-fix? And how to find a provider that fits your business.
How Did Managed Services Start?
Managed Services began as a response to businesses grappling with the inconsistent costs of IT maintenance and repair. In the past, a server or critical piece of hardware would fail without warning. Emergency calls are costly, and back then, technicians did not have the same remote control capabilities we have today. These factors combined with the disconnect between the daily operations and the IT provider caused excessive, unexpected costs. Businesses wanted something better from their technology providers; enter Managed Services.
The IT industry took note of these issues and began to develop software and tools to overcome these issues. Providers could now monitor and service systems remotely. These pioneers began to package these new capabilities with service plans allowing them to deliver a consistent monthly cost and a better end result.
What Are the Benefits of Managed Services?
- Reduced, predictable costs
- Technology stability
- Expert resources are available when you need them
- Industry agility or an increased capacity to quickly implement new technologies
- Increased efficiency
The Pricing Model
Unlike break-and-fix providers who charge you by the hour, Managed Service providers often charge monthly for the amount of computers they are responsible for servicing. For most companies, this type of price model is more affordable. The cost for a good, proactive IT firm is much less than the monthly salary of an internal employee. Additionally, your business will get much more benefit from an IT firm than an internal employee. This becomes especially true when you have an employee handing your technology when they were hired for a different purpose. (Think about, for example, your local mechanic. You might be able to do your brakes, but it will probably take you 4x as long and get you frustrated along the way – change to taxes and lawyer examples ).
Why Use Managed Services?
Your technology and it’s vendors play a significant role in any IT strategy. It can be hard to stay on top of all the technology issues that commonly arise, but a good Managed Services provider can help you tackle those difficult issues by being proactive. A good provider will get to know your business and will handle things that will become problems later; like a failing hard drive or a backup job that isn’t completing. Over time, these actions result in an error-free operating environment.
Similarly, proactive IT providers will take it a step further and start looking to the future. They will start recommending replacement dates for critical computer systems and providing you a forward looking budget. They will start identifying operational inefficiencies and fixing them. This will make you more money with less added costs.
What to Look For?
Here is how to find a solid managed services vendor to work with at a reasonable price. Further, the following is a list things to consider when selecting a Managed Services provider for your business:
- Reputation & Experience – How many years have they been in business? Are there testimonials? Have you contacted their references?
- Services – Make sure they provide everything you are looking for to help keep your IT infrastructure stable and able to adapt to increasing business demands. Will they provide strategy? An IT Budget? Etc.
- Security – Your systems are critical and need to be protected from vulnerabilities. These can be viruses/malware/ransomware, a lack of policy and procedure, or even a lack of standard best practices. Accordingly, you should ask your potential provider how quickly your business could recover from an issue such as cryptolocker under their plan.
- Proactivity – Although Managing IT systems is not just about making sure it is running smooth today, but also making sure things will be smooth in the future. Basically, planning is everything when it comes to reducing long term costs. Make sure your service provider is capable of long-term strategic thinking and has a vehicle to provide you that vision.
- Response Time – Certainly, whether you are a large or small business, down-time costs you money. Therefore, it is important to find out what your potential providers response time is when you need them the most.
Other Things to Consider in Your Potential Managed Service Provider
- Transparency – All managed service providers are not the same. Your provider’s processes and results should be clear. Ask for sample reporting. Ask them how they will communicate that they are providing the services you have contracted on a regular basis.
- Communication – There should be healthy and clear communications between you and the provider. They should be willing to take the time to clearly explain issues in terms you can understand. They should be willing to educate you and provide you options.
- Pricing – Similarly, I would advise you that your decision should not be solely based on price but rather value. Be sure the pricing model is clear and understandable. You should know what is included and what is excluded from their agreement. Consider the cost of managed services vs. hiring IT Personnel to handle the IT support.