Your IT Department were recently named as the number 5 Managed Service Provider in the UK. We finished 97th in the World in the MSP501, the ‘World Cup’ of Managed Service Providers. This was a fantastic achievement for us as a business. But it also raised a question when we let people know. Exactly what are managed IT services?
Wikipedia defines Managed Services as “the practice of outsourcing the responsibility for maintaining, and anticipating need for, a range of processes and functions in order to improve operations and cut expenses. It is an alternative to the break/fix or on-demand outsourcing model where the service provider performs on-demand services and bills the customer only for the work done.”
We’re not totally convinced that clears things up!
In the article we’ll try and explain what managed IT services are. We’ll look at how they differ from other models of IT Support. Plus we’ll discuss the advantages of managed services.
What Are Managed IT Services?
A Managed Service Provider takes control of the IT function for its client. The client could be a business with anything from 5 users to 100’s. The easiest way to think of this is in a large business of say 500+ employees you would generally have an internal IT department. If something goes wrong with your computer you call IT and they fix it. This is the interaction that most people have with IT. However, in the background IT are updating computers, installing software patches, maintaining everything and looking at ways to improve the IT systems to make the company more efficient. Occasionally IT will undertake projects, maybe replacing older computers in an entire department, or moving some software to the cloud.
Take everything that the internal IT department does and that describes the role of the MSP. The difference is that the MSP carries out this role for multiple clients. An MSP also costs a lot less per year than employing a whole IT department.
For most people in the businesses where we provide Managed IT Support we are ‘IT’. They call or use the online support portal when they have a problem, and we fix it.
For the senior management of the business, we do much more. They are more aware of the work done in the background. This ‘behind the scenes’ monitoring and maintenance keeps the systems keep running. Due to this problems are headed off before the reach the people using the equipment to do the work.
The Alternatives to Managed Support
We’ve mentioned the option of an internal IT support team. This is really only practical once you’re a certain size of business. The salary for an IT Manager starts at around £42,000. However, you can’t just have one member of an internal team. You will need at least 2 Helpdesk Engineers in order to cover for holidays. These will be highly skilled individuals because you’ll need them to cover a wide range of problems. This means they will be expensive. Expect to budget £35,000 per year each as a minimum. This means your annual cost is well over £100,000 already! This is outside the budget of many smaller businesses. In fact you’d need 266 employees or more to make this cost effective based on numbers alone.
There are other alternatives. You can of course look after your IT yourselves. Often in very small businesses there is an individual that ‘knows computers’. They then get the position of unofficial IT support. This can work for a while. But soon they are fixing computers rather than doing the day job. And, because it isn’t what they actually do, there knowledge is limited. They may be able to get something working again by rebooting it but they won’t be able to fit the root cause of the failure and stop it happening again.
The Evolution of IT Support…..
The next stage in the evolution of IT support is the break/fix model. The involves working with an IT Support Company and simply phoning them when something goes wrong. This may be on a subscription basis, but more often it is billed on a pay as you go basis. This is a step up from looking after things yourself, but it still has its draw backs. The main problem is that there is no incentive for the provider to find the root cause. They are being paid for each fix, so fixes become sticky plasters. Why fix the root cause of a problem when you get paid every time it goes wrong? In addition to this they have no investment in the relationship. So they are not looking for ways to improve the systems and make life easier for the client.
The exponents of the break/fix model tend to be smaller IT Support Businesses. They provide a valuable service, and are usually much cheaper than an MSP. This is due to the lower overheads that comes with having less staff and fewer tools.
This brings us to the Managed Service Provider.
The Advantages of Managed IT Services
The Managed Service Provider model first appeared in the 1990’s in the USA. Initially aimed at Enterprise clients the model was soon adapted when it became clear it would be beneficial to SME’s. The term is now widely used by IT companies the word over.
We’ve described earlier how Managed IT works. We’ve also got a further article that goes into a lot more detail: What Is Fully Managed IT Support. But what does that mean for you? How do Managed IT Services help your business?
First and foremost Your MSP is a partner. They charge a fixed monthly cost. This means they are invested in your systems. And they have a vested interest in making sure they work efficiently.
Because the monthly price is fixed the MSP is more profitable when it’s clients IT is running smoothly. Say the client pays £500 per month. They report lots of people experiencing similar problems. Each problem gets solved but the client use 25 hours of support in the month. The MSP is making £25 per hour. By the time it pays it’s staff, all of the tools it uses, rent, rates, heat, light etc. it makes nothing. Now if the MSP takes the first problem, fixes it and then investigates the root cause of the problem and ensures it doesn’t happen again this takes 5 hours. Suddenly the MSP is making £100 per hour. This is better for the MSP AND better for the client.
Working in Partnership
As the business owner, or the person saddled with IT in the business, it should reduce your workload as soon as you start working with a Managed Service Provider. Immediately all of the problems from your people go to the MSP’s help desk and are looked after by them.
You’ll benefit from less downtime. Because the MSP is undertaking regular monitoring and maintenance many problems are identified and fixed before they actually become a problem for the staff doing the work.
And you’ll also be able to budget more easily. Your monthly cost for support is fixed. But you’ll also get an IT roadmap (which is what we call them) essentially a strategy or plan. You’ll know when your equipment needs replacing so you can budget for it. And you’ll have someone to discuss your business plans with who can suggest how technology can help you achieve those plans.
Does Managed Services Sound Like it’s Right for You?
We can talk about Managed Services all day – in fact we’ve produced a guide for anybody buying IT Services including Managed Services. We’ve called it the ‘2021 IT Buyers Guide‘ and it’s available completely free.
We don’t think you should have to fill out a form to get really useful information so click on the image or the link above and you’ll get straight to the Guide. Prefer a physical copy? Email your address to email@example.com and we’ll post one out to you.