Managed Services Key Stats
Recent research demonstrates the massive growth of managed services, and its impact on operational costs.
- Managed services will aid in decreasing an organization’s overall IT costs by 25 to 45 percent, while improving operational efficiencies by 45 to 65 percent.
- 25 percent of organizations said downtime costs averaged between $301,000 and $400,000 per hour.
- 40 percent of businesses plan to include IT as a core competency within the scope of their business. Worldwide IT spending is projected to total $3.9 trillion in 2021.
- When utilizing an MSP, organizations see improved employee productivity, quicker services to market, and greater business agility.
- Cloud migration was a top business driver in 2020, driven partly by the COVID-19 pandemic.
- Proactive monitoring leads to fewer systems experiencing issues or crashes, leading to a 20 percent reduction in the number of [help desk] tickets.
When adding managed IT services to your organization, it’s common to have questions about a range of issues, including services offered, cost, plan components, benefits and features, among others.
From cloud migrations, help desk and Network Operations Center (NOC) functions, to backup and disaster recovery (BDR) and security, a reputable managed services offering provides extra assistance to organizations with little to no IT support, or supplemental services to larger organizations with an in-house team, through a co-managed IT model.
When working with a knowledgeable managed services provider (MSP), you can count on 24/7/365 coverage, a deeper level of service for your most important assets, and peace of mind your business is in good hands with your trusted partner. This also extends to your employees, potentially leading to increased work-life balance, and the reduction of potential burnout for current IT staff, or anyone else currently performing these duties, or responsibility for these functions.
While managed IT services can vary in offerings, most comprise areas such as remote monitoring and management (RMM) infrastructures, help desk and NOC services, security protection, BDR planning, cloud services, professional and integration services, and others.
This comprehensive guide encompasses many aspects of managed IT services, including features and benefits, cost structures, offerings, plan components, efficiencies, and more.
Managed Services Features & Benefits
According to a 2020 report by market advisory firm Mordor Intelligence, managed services can help reduce overall IT costs by 25 to 45 percent, while improving operational efficiencies by 45 to 65 percent. This comprises both short-term and strategic decisions.
Whether you decide to completely outsource all of your technology stack to an MSP or institute a combination of in-house professionals with external resources, this partnership allows you to focus on high-level, long-term initiatives, rather than day-to-day tasks. It also facilitates an improved work-life balance for employees and helps limit the need for potentially costly after hours and holiday coverage, as well as vacation and sick leave coverage.
As far as your operations are concerned, such services can improve productivity and efficiency by reducing downtime and costs. Without an MSP, organizations risk lost revenue and resources, and in some extreme cases, complete shutdown.
According to a special report conducted by analyst firm 451 Research, 83 percent of respondents said they could improve their business management systems and infrastructure management, which isn’t surprising considering the complexities of independently managing digital infrastructure.
An MSP with experienced, knowledgeable technicians; mature, enhanced workflows; and constantly vetted tools, also understands how you want to approach specific processes, troubleshooting, and other necessary actions. While having a well-versed partner on products and services you want to offer is invaluable, it’s also prudent to work with an MSP who invests in their workforce. This can be accomplished through continuing education and certifications for sales, service, and support staff—all of which are necessary for improved customer service and problem resolution.
Managed Services Cost Structure
A January 2021 forecast by analyst firm Gartner, Inc. estimated that worldwide IT spending will reach $3.8 trillion this year, representing a 6.2 percent increase from 2020. IT costs and expenses are high on the list of business leaders, especially as more and more organizations incorporate Infrastructure as a Service (IaaS) and Software as a Service (SaaS).
As a result, IT spending has shifted away from capital expenditures and instead toward operating expenses, largely due to the growth in cloud services and SaaS-based models.
When it comes to IT budgeting, operating expenses are more prudent than capital expenditures because it generally includes SaaS licenses, IaaS subscriptions, contract-based services, and other day-to-day costs. As for capital expenditures, these often include costs directly related to infrastructure, such as servers, and other technology equipment.
Here’s a breakdown of both type of expenses:
- Hardware & Software Purchases, (which can include but aren’t limited to):
- Storage & Memory
- Physical Servers
- Network infrastructure
- Laptops, Workstations, or Mobile Devices
- Patents, Trademarks & Copyrights
- Physical Servers or Other Data Centers
- Project Deployments Related to any of the Included Items
- Software Subscription & Maintenance
- Licensing Fees & Updates
- Wireless, Telecommunications & Other Utility Services
- Monthly Support & Maintenance
- Security-Related Products or Services
Before signing any formal contract with a managed IT services provider, it’s also important to review and assess what’s included in the Service Level Agreement (SLA). This includes any fine print, and other specified terms, conditions, and responsibilities.
Types of Managed Services Offerings & Plan Components
While each managed IT services provider facilitates how they structure offerings and solutions, the majority will perform labor-intensive, day-to-day functions. Offered as a fully integrated and managed plan, or as individual a la carte services, most MSPs provide the following:
MSPs can also offer additional insights and management capabilities that organizations previously didn’t have access to, such as:
- 365/24/7 Help Desk Services
- Network Operations Center (NOC)
- Third-Party Operated Security Operations Center (SOC)
- Private & Public Cloud Solutions
- Backup & Disaster Recovery
- Network Assessments
- IT Design, Architecture, Implementation & Project Management
- Service Standardization Processes
- Escalation Resources
In addition to a traditional MSP offering, organizations can choose from a co-managed services model. This solution involves internal IT teams delegating essential tasks to alleviate or augment their existing IT staff so they can concentrate on more strategic initiatives, such as software development, business applications, and other special projects. As an equally shared partnership, this model works best for organizations who work with an MSP but still want to personally perform and manage some of these tasks.
How to Choose a Managed Services Provider
When vetting and researching possible managed IT services partners, it’s important to understand and grasp their offerings, processes, and corporate culture. Even if the MSP you choose excels at delivering services, it’s not an appropriate fit if they don’t fully understand your business.
Having a system of shared goals and values is paramount to a successful MSP partnership. It’s also wise to research industry review platforms and reach out to the MSPs current customers and partners for peer-to-peer feedback.
The next step is to develop a list of interview questions to ask your potential MSP. Enlisting the help of all of your important stakeholders and employees to ensure all your bases are covered.
Consider the following when considering prospective managed IT services providers:
- What are your main services offerings?
- What do you consider a reasonable response time?
- How do you manage your help desk and NOC services?
- How experienced are your technicians, and what are their areas of expertise?
- Do you conduct/provide assistance for continuing employee education and certifications?
- What types of tools and equipment do you utilize?
- What type of access will I have (as a customer) to your tools and dashboards?
- Which vendors do you partner with?
- What type of internal toolkit do you offer?
- What does your current cybersecurity offering look like?
- How will you handle after hours and holiday coverage?
- How do you conduct migration of on-premises applications to cloud-based services?
- What services do you currently not offer?
- Can you assist with crafting a disaster preparedness plan?
- Do you offer third-party SaaS backups?
- What type of due diligence do you perform internally?
- How can you help me with required due diligence for my firm?
How to Tell if You Need Managed IT Services
Consider the following questions if you’re still unsure about seeking the assistance of an outsourced MSP:
- What areas of your business are currently lacking?
- Can you further-optimize any internal business processes?
- Are customers dissatisfied with help desk services and response times?
- Could your backup and disaster recovery/IT remediation plan be better organized?
- Do you want to move most of your data into the cloud, and if so, how will you manage that?
- Are you becoming increasingly concerned about increased security breaches, vulnerabilities, and attacks?
- Are employees feeling underappreciated and undervalued due to lack of IT support and troubleshooting?
- Is your organization's lack of IT processes and products affecting other areas of the business
- Has your business experienced increased downtimes and decreased revenues resulting from subpar IT support?
If you responded “Yes” to at least one of these questions, it might be time to enlist the help of a reputable MSP.
Why You Should Work With An MSP
Once you’ve done the appropriate research, consider if the MSP has your organization’s best interests in mind and shares its corporate culture, processes, and priorities.
While safeguarding and managing your organization's most important assets is necessary, it’s just one piece of the managed services puzzle. An effective MSP must also ensure a solid workflow rounded out by its seasoned technologists and cutting-edge technology products.
Should you decide to choose LincolnIT as your MSP, we’ll take the time to understand, integrate and adopt all of these items into your organization’s daily business practices, so that you can focus on strategic initiatives. This includes everything from creating job tickets, to accessing our 365/24/7 nationally recognized help desk, and utilizing our NOC.
Your experience will never be one that’s simply: “Set it, and forget it.” Through our Three-Pillar Approach of People, Process, and Products, we’ll ensure a managed IT services plan built on our unmatched vendor, toolkit, and alliance partnerships.
LincolnIT provides full or co-managed services models, and customized a la carte plans for SMBs, mid-market companies, large enterprises, and nonprofits through its ITCare brand, as well as our other associated Care brands. We speak fluent managed services, and can evolve your support model with you. Contact us for more information, or to request a proposal.