Every business uses IT for its day-to-day tasks. Most companies even use the same pieces of software.
Let’s look at traditional IT use for small- to medium-sized businesses and see how companies can benefit from managed IT services.
What IT services do businesses use?
Most businesses are running Microsoft Windows on their PCs, and until recently, your accounting software was probably one version or another of Sage.
If you are using spreadsheets and creating documents, your choice was probably Microsoft Excel and Microsoft Word.
My point is 80% of businesses are using the same software in the same way. Then they all hire the same person to manage and look after their IT.
This leads to massive overspending for each company.
Not just on the hardware but also on those hired to look after everything.
What is worse is that each of these companies sees IT as an expense!
As IT is not a direct way for these companies to make money (they don’t charge per hour for their IT experts like managed IT services companies would), every pound spent appears to have a zero return.
The logical thing to do is ensure that the least amount is spent on IT. I spend most of the budget on maintenance, leaving little for actual hardware and software.
The systems your business depends on are procured for the lowest possible price resulting in the lowest possible quality.
There is nothing wrong with getting the best possible value for the best price, but is there a better way to do it?
There is a way to get more from your investment by shifting where the money is spent.
What skills do they need?
Every business needs a minimum depth and breadth of IT skills, and I can tell you now you will not find an expert on virtual networks, security, database administration, Email, SCSM, SCOM, Active Directory and application performance management in a single-person.
IT roles overlap in areas, but you cannot hire an expert in everything – that is why we call them experts.
The role of IT in business is too significant, and software packages are now too complex for a single person to know everything about everything.
It would be best if you had a team or returned to using paper and pen. Most businesses need accounting, email and office applications, and a CRM system.
Add the skills to manage the applications and systems they run on, and you have an endless list of added costs that look like zero returns.
What is an MSP?
An MSP is a Managed Services Provider.
Essentially you outsource a function of your business to an external company that will perform that function as a service.
This is a cost-effective option for businesses that want to focus on growing their customer base whilst not worrying about functions that either do not interest them or are not part of their core business.
Most frequently, this is done with Payroll, Marketing, Accounts and IT, but other services can also be outsourced.
Legal, for example, might be something you decide is best done via a third party as you may not have enough work to justify paying lawyers full-time.
But where do I benefit from Managed IT services? Just a little bit further to go. First, let’s see how MSPs do things better.
How do MSPs do it better?
Focus. MSPs specialise in a set of skills or a business function. It is what they do daily and, better yet, what makes them money.
A business function that may have been a cost for your business (as you do not directly bring money in from it) will be their source of income.
By outsourcing it, you can vastly reduce what would be a cost to your business and still manage to get the work completed to a high standard.
MSPs need to cater to the broad set of skills required, but each person can be 100% invested in their field of expertise.
Having a team of 10 people with 100% depth on each unique skill set is infinitely better than someone who knows 5% to 7% of 15 or more different specialist topics.
Having access to all those skills, you can save a fortune on professionals who may only need a few hours a week.
Larger teams have built-in redundancy; for the same reason, you spread your email workload over multiple servers.
MSPs can spread the workload of a skill set over multiple people. What happens in your business when your email expert is on his holiday or a training course or is off ill?
IT experts are paid more at companies where IT is the direct source of revenue. They can afford to pay top rates as they are responsible for the business’s income.
Whilst paying the most for a role is not a guarantee they will be the best, being able to pay higher amounts should, on average, improve their chances of finding better people.
How do they compete?
If you work for one of the big tech companies, there is a reputational advantage.
Everyone will know you must be good enough to get through the interview stages.
After that, if you say you worked for Google or Facebook, it is as good as saying you worked for IBM in the 80s. Doors will fly open with new opportunities.
Unless your organisation has a mission that does some good for the world, like saving the Rhinos or protecting the rainforest, it might be challenging to compete for tech roles.
Millennials are not all about money; it is as much about the cause as the money.
Whilst most MSPs are not tech giants, some staff will feel more at home with other tech professionals. They think they can learn faster by working for a Microsoft Partner.
A Microsoft Partner also has some benefits for employees. They have a better standing in the IT industry and direct links to one of the biggest IT companies in the world. They may also feel safer working for a company that does not see tech as a cost.
Being able to leverage the skills of an MSP is a clear benefit of Managed IT services. By partnering with an MSP, you have access to some of the best IT professionals in the industry.
How can your business benefit from Managed IT Services?
We know what an MSP is and how they compete, but how can my business benefit from Managed IT services?
If your IT person is away on holiday, sick leave or a training course, and your email server goes down, do you still call them?
Do you have someone that can fill the temporary skill gap?
Do you chance it and hope that everything stays up and running?
Using an MSP with a team of experts lets you know that even if one person is on holiday, a training course, or sick leave, there will always be someone else to cover your needs.
Savings from having to train staff on the latest tech is another bonus.
Do you pay 2k for a Microsoft training course plus lose out on the skills of the person being trained?
Do you lose out on 4 to 5 weeks of an individual’s skills when they are on holiday?
That can be the equivalent of 6+ weeks that you see no return on their skills per year.
Last but certainly not least, a benefit of managed IT security services are the agreed-upon SLAs. They usually come with or allow for financial penalty should the MSP not hit a certain service level.
Whilst not hitting the level is unsuitable for either party, you know that your businesses are financially aligned on service uptime.
If they mess up, you can get a part refund, which most Cloud Service Providers seem to offer. This can be an excellent incentive and benefit from Managed IT services.
As 80% of businesses need the same skill sets to manage their IT, you can outsource IT management for a fraction of the cost.
You should be able to improve the service level by leveraging the better skills available from your MSP. Getting the same skills but for a fraction of the cost allows you to free up some of the savings from the budget.
This can be used to improve the quality of the hardware and software you run your business on.
Reallocating your budget to go into the software and hardware will give you a better return on the investment.
By shifting where the money goes, you can increase the quality of your purchases.
Using fresher and higher-quality ingredients will continuously improve a low-quality recipe.
Using high-quality ingredients and a high-quality recipe will give you a result order of magnitude greater.
It is standard for businesses to spend 70% to 80% of their IT budgets just on maintenance.
By outsourcing the maintenance, you can change that figure, spending 20% to 30% on care and 70% on projects.
Investing in better software with more required features will help you grow faster and achieve more.
There are many ways to benefit from Managed IT services, from reducing costs to improving service levels. The most important points are:
- Spend less on maintenance to benefit from Managed IT services
- Focus your budget on higher quality software, offering better functionality
- No work hours lost from holiday, training, sick leave
- Saving on annual training costs
- A team of comprehensive and in-depth skills is always available
- No need to worry about staff leaving after receiving training
- Potential refunds in case of service level targets are missed.