user | February 25th, 20218 FINANCIAL BENEFITS OF MANAGED IT SERVICES
By: Syntelo Johannesburg
Managed IT Services are an investment – and as with all investments, it's only normal to consider the return it can bring. And when it comes to Managed IT Services, there are a number of benefits that directly translate into cost savings.
Before we dive in, did you know Managed IT Services can assist in helping your business achieve a variety of corporate initiatives? An IBM white paper, Business Value of Managed Services, stated, “According to IDC research, the biggest challenge that businesses face in executing their corporate strategy is focusing the right people and resources on strategic initiatives. Essentially, firms are looking to ensure that their talent is focused on core areas of their business while optimizing productivity.”
The International Data Corporation (IDC) conducted research on the value Managed IT Services provide businesses. Overall, their research found that for every 100 users, just under $400,000 could be saved annually. Let’s take a closer look:
THE FINANCIAL BENEFITS OF MANAGED IT
In a lot of ways, Managed IT Services helps organizations ensure the right people and the right resources are allocated in the best possible ways, which in turn, provides financial benefit. Other common initiatives Managed IT Services can support include improving customer satisfaction, investing in new resources, optimizing the use of existing resources and refining an organization's agility. Here’s a look at a few ways Managed IT Services provides financial benefits to organizations:
1. USER PRODUCTIVITY
As business owners and IT directors, you look to technology to improve productivity and enhance the way you do business. When your technology doesn't do that, there’s a problem.
Anytime your users can’t work, you lose money.
According to IDC’s data, unplanned downtime costs organizations $58,118 for every 100 users. The average employee was losing 12.4 hours a year due to server downtime and 6.2 hours a year for network downtime. By implementing Managed IT Services, they were able to reduce server and network downtime by more than 85 percent.
2. INFRASTRUCTURE EXPENSES
Switching to a Managed IT provider reduces infrastructure costs in a number of different ways. When a Managed IT provider takes control of your infrastructure, you are able to downsize the amount of infrastructure you have on-site by using their data centers. You not only save on the cost of the hardware, but also on the energy it uses and the space required to house it.
Additionally, you’ll see savings related to licensing, training and consulting. All of these needs are covered by a single, monthly investment. These services don’t go away to save you money, but rather, they are all streamlined and better managed via a single provider. As a whole, each organization in this study saved $146,801 per 100 users every year just on costs related to infrastructure.
3. IT STAFF PRODUCTIVITY
This benefit is in direct relation to staff productivity and specifically related to your IT department. All too often, we see IT staff consumed with resolving user issues or fixing malfunctioning equipment. These tasks take their focus off their core responsibilities. By outsourcing the tasks and management of your IT environment to a managed services provider, your staff – those in IT and those not in IT – can remain focused on the more important priorities.
In the IDC study, organizations experienced savings related to the reallocated staff resources, as well as bypassing the need for additional staffing costs – which translated into a 42 percent average increase in productivity.
4. SMALL INITIAL INVESTMENT
Managed IT Services help you offset the initial investment of technology costs. Rather than spending thousands of dollars on hardware and software upfront, you pay for the service through a low monthly investment. Because the service is an operational expense and not a capital expenditure, you don’t have nearly as many resources tied up in managing your business technology. Plus, updating to new software is included in your service, meaning you won't incur additional charges just for keeping your technology up-to-date.
5. PREDICTABLE MONTHLY COSTS
When you have a managed IT service, you'll be paying the same amount regardless of how much support you need each month. This means you’ll know exactly what to budget and exactly what service you'll receive, allowing you to be more flexible when investing in other areas of your business. And keeping an eye on your costs is simpler than ever.
6. IMMEDIATE EXPERT-LEVEL SUPPORT
You know it and I know it: time is money. IT problems disrupt productivity and stall projects. And time spent struggling to solve IT problems is money down the drain. When you use a managed IT service, you won't have employees waiting for someone to figure out their technical problem and get them up and running. Instead, you'll be able to immediately access an expert who can solve your problem and get your business back on track, oftentimes within minutes.
7. ECONOMY OF SCALE
As your business grows, its support structure needs to grow, too. When you use a Managed IT Service you can scale your business up or down with nothing more than a simple discussion with your provider. If you hire on 10, 15 or even 50 employees, they can support them. Similarly, if you're not using a certain application in cloud computing, you can easily get rid of it.
Managed IT Service is the ultimate in flexibility, capable of expanding and contracting based on your business needs. This is particularly useful in your business's early years and during periods of significant growth when things can change at a moment's notice.
8. OVERALL BUSINESS PRODUCTIVITY
Finally, all of the above benefits of Managed IT Services combine to increase overall business productivity by creating an IT environment that is reliable, scalable and well-supported. In fact, IDC calculated the effects of overall business productivity on revenue, and they came up with an annual benefit of $229,511.