Every business uses IT for their day to day tasks. Most businesses even use the same pieces of software. Let’s look at the traditional IT use for a small to medium sized business and see how businesses can benefit from managed IT services.
What do they 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 most likely Microsoft Excel and Microsoft Word. My point is 80% of businesses are using the same software in the exact same way. Then they all hire the exact same type of person to manage and look after their IT.
This leads to a massive over spend for each individual 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 return of zero.
The logical thing to do is make sure that the least amount is spent on IT as possible. Spending most of the budget on maintenance leaves very little left for actual hardware and software. The very 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 indeed 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 do have 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 big and software packages are now too complex for a single person to know everything about everything. You need a team or you need to return to the use of paper and pen. Most businesses will need accounting, email and office applications and probably a CRM system of some type. Add to that the skills to manage the applications and systems they run on and your have an every increasing list of added costs looking like zero return.
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 very cost effective option for businesses that want to focus on growing their customer base whilst not having to worry 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 day in and day out and better yet it’s 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 get to vastly reduce what would be a cost to your business and still manage to get the work completed to a high standard.
MSP’s need to cater to the broad set of skills needed but each person can be 100% invested in their field of expertise. Having a team of 10 people with 100% depth on each personal skill set is infinitely better than an individual who knows 5% to 7% of 15 or more different specialist topics. By having access to all those skills you can save a fortune on professionals that may only need needed a few hours a week.
Larger teams have built in redundancy. For the exact same reason that 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 on a training course or is off ill?
IT experts are paid more at companies where IT is the direct source of revenue. As they are responsible for the revenue that the business generates, the business can afford to pay them top rates. 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?
Prestige. If you work for one of the big tech companies, there is a reputational advantage. Everyone will know that you must be good enough just 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 80’s. Doors will just fly open with new opportunities.
Unless your organisation has a mission that does some good for the world like save the Rhinos or protect the rainforest it might be difficult to compete for tech roles. Millennials are not all about money though, for them 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 feel they can learn more, faster, by working for a Microsoft Partner. They may also feel safer working for a company that does not see tech as a cost. A Microsoft Partner also has some benefit for employees. They have a better standing in the IT industry as well as direct links to one of the biggest IT companies in the world. Being able to leverage the skills of an MSP is a clear benefit from Managed IT services. By partnering with an MSP you have access to some of the best IT professionals in the industry.
How can my 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, on sick leave or on a training course and your email server goes down do you still call him/her? Do you have someone that can fill the temporary skill gap? Do you just chance it and hope that everything stays up and running? By using an MSP with a team of experts, you know that even if one person is on holiday or on a training course or is on 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 are seeing no return on their skills per year.
Last but certainly not least a benefit from managed IT security services are the SLAs which are agreed. They usually come with or allow for some sort of financial penalty. Should the MSP not hit a certain service level. Whilst not hitting the level is obviously not good for either party. You do know that your businesses are financially aligned on service uptime. If they mess up you can get a part refund which seems to be offered by most Cloud Service Providers. This can be a nice incentive and certainly a benefit from Managed IT services.
As 80% of businesses need the same skill sets to manage their IT you can outsource the management of your IT 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 exact 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 always improve a low quality recipe. Using high quality ingredients and a high quality recipe will give you a result in orders of magnitude greater. It is quite common for businesses to be spending 70% to 80% of their IT budgets just on the maintenance. By outsourcing the maintenance, you can change that figure around so you are spending 20% to 30% on the maintenance and 70% on the projects. By investing in better software with more required features this 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
- Team of wide and in depth skills always available
- No need to worry about staff leaving after receiving training
- Potential refunds in case of service level targets being missed.