In the digital business era, partnering with managed IT service providers (MSPs) enables reliable company operations unleashing staff productivity minus disruptive technology failures or costly cyber risks worries. But before outsourcing critical functions, prudent executives rightfully inquire about typical managed services cost structures and size them up against potential operational gains reasonably.
Understanding Managed IT Services (MSPs)
Specialized MSPs deliver a suite of outsourced IT services encompassing:
- Network Monitoring and Management – Managing entire IT infrastructure spanning company internet access lines, intranet/LAN networks, and integrity monitoring for performance and uptime.
- Helpdesk Support – Attending everyday workplace tech support queries from staff regarding using productivity suites, application access issues device usage troubleshooting assistance.
- Data Backup and Recovery – Ensuring crucial company documents, databases, and configurations get regularly backed up to secure resilient locations allowing swift data recovery in case of losses due to failures, human errors, or crypto locking events.
- Security Management – Installing and managing endpoint protection, firewalls, and gateway anti-malware for securing network perimeters against vulnerabilities and breaches. Regular updates and monitoring bolster defenses.
- Cloud Services – Advisory and integration assistance in adopting software-as-a-service (SAAS) CRM, emailing, and collaboration tools on pay-per-usage cloud models keeping costs flexible.
- Vendor Management – MSP account managers act as the sole customer voice coordinating with multiple regional ISP partners, warranty providers, and support vendors during outages accelerating issue resolution.
Why Choose Managed IT Services?
The decision to invest in MITS is driven by a multitude of factors, including:
- Cost Savings – Consolidating support needs into specialized teams achieves economies of scale reducing expenses rather than disjointed break-fix spending. IT staff skills augmentation also contains headcount costs allowing strategic hiring.
- Expert Skills – Certified expert teams bring best practice solutions honed by extensive exposure managing multi-industry clients over the years making them reliable partners in safeguarding operations.
- Proactive Monitoring – Technology health analytics, early abnormality alerts, and predictive assessments help prevent avoidable disruptions through timely interventions unmatched by internal-only teams strapped in reactive cycles unable to upgrade skill sets continually.
- Focus on Business Core – Delegated responsibilities give internal leadership freedom to focus on revenue goals without spending disproportionate time grappling with escalating technology complexities detracting from core competencies.
- Flexibility and Scalability – Cloud-integrated managed services built on flexible consumption models allow seamless growth and adaptation to needs without disruptive transition pains from periodic modernization upgrades.
- Enhanced Security – Beyond anti-malware software, extensive endpoint securing training, DLP, encryption, and access controls applied by specialist organizations stay fortified against rapidly evolving cyber threats.
Understanding Managed IT Services Costs
The cost of managed IT services is a critical consideration for businesses of all sizes. The costs can vary widely depending on several factors, including:
- Scope of Services – Costs understandably vary based on the breadth of IT functions getting covered under agreements – whether purely helpdesk and firewall management or a comprehensive stack including telephony oversight.
- Organization Size – Enterprise grade needs servicing thousands of endpoints, applications servers supporting specialized usage needs predictably run higher over SMBs requiring securing basic networks, emails, and storage.
- Infrastructure Complexity – The nature of line-of-business systems managed spanning differing sophistication tiers and integration dependencies adds cost layers accordingly. Modern setups ease monitoring.
- Desired Service Levels – Premium providers promising higher response times, and resolution velocities across prioritized trouble tickets categories cost extra over generic best-effort models without binding timeframes.
- Location Logistics – Onsite support needs for multisite clients spur costs from added local coordination, travel, and tool mobilization efforts vis-a-vis a consolidated single HQ location setup.
Evaluating major cost influencers upfront allows sharper cost analysis and benefit mapping.
Managed IT Services Pricing Models
MSPs typically offer several pricing models to cater to the diverse needs of their clients:
- Per User – Cost fixed annually per employee provisioned covering individually assigned endpoint device secure access and support entitlements regardless of units.
- Per Device – Total expenses are determined by a number of hardware equipment like desktops, printers, or servers supported via agreements basis irrespective of actual employee strength.
- Tiered – Blend of fixed subscription fee for covering network infrastructure support and additional graduated variable pricing according to number of user/devices getting managed across client environment.
- All-Inclusive – Single aggregated flat fee structured for the entirety of the Managed support stack spanning network monitoring, security administration, and help desk priced competitively without nickel and diming minutiae.
- Monitoring Only – Some provide network monitoring and alerting services on a fixed fee basis allowing clients opting to retain in-house level 1 engineers seeking external specialist support purely during major escalations.
- A La Carte – While modular per component pricing allows selectivity aligning spending to needs, costs get less economical overall without consolidation benefits factored in. But offers flexibility in trying out services.
While the cost of managed services will vary depending on the factors and the pricing model you can use a general formula to estimate the costs:
Total Cost = (Base Fee) + (Per-User or Per-Device Fee * Number of Users or Devices) + (Additional Services Fees)
Negotiating Managed IT Services Costs
Some areas to negotiate without compromising service quality include:
- Getting Multiple Quotes – Encourage bidding from 3-4 shortlisted providers allowing benchmarking competitor rates for same needs categories.
- Understand Precise Needs – Fine-tune internal infrastructure support expectations, growth roadmaps, and management priorities for conveying accurately to vendors right-sizing agreements without overpromising requirements.
- Consider Tiered Pricing – Balance fixed infrastructure monitoring costs with graduated variable component pricing usage/support needs across locations, and workforce segments allowing better cost control as needs evolve.
- Service Level Negotiation – Not all support needs justify premium SLA costs if slightly slower issue resolution still keeps key operations unaffected. So evaluate must-haves over good-to-haves areas for cost optimization.
- Bundle Services – Consolidated project fees applying for bundled services like network upgrades plus migrating applications or servers to the cloud provide cost incentives over standalone piecemeal contracts.
- Term Period Discounts – Agreeing longer-term contracts spanning 2-3 years incentivizes providers to extend discounts from savings achieved on account management expenses. But don’t get locked in needlessly.
Hidden Costs of Managed IT Services
Beyond quoted fees, few recurring expenses like:
- Onboarding/Setup Charges – Initial network discovery evaluations and configuration changes during transitions represent onboarding costs key for laying monitoring foundations.
- Hardware/Software Needs – Upgrades to premise equipment, tools, and licensing for meeting technology standards spelled by MSPs as preconditions for quality delivery.
- Support Travel Logistics – On-site specialist visit trip charges involving travel and service charges during major outages or infrastructure overhauls.
- Staff Re-Training – Potential learning curve challenges adapting older workforce to new vendor updated UI/workflows might temporarily impact productivity requiring staged sensitive transition planning.
- Data Migration Fees – Structured data transfers from legacy systems into modern cloud applications endorsed by new managed services provider preferred stacks attract data migration fees.
Conclusion
Choosing competent managed service partners through careful research on candidate expertise, pricing models and value mapped against internal environments helps secure business infrastructure reliability and staff productivity amidst accelerating technology innovations. Periodic reviews ensuring continuing alignment to usage patterns and service level expectations guarantee sustained value missing none of the key business priorities in focus contributing to the fruition of organizational goals seamlessly.
