Show Me the Money: Cost Cutting with Managed IT Services

If your organization is evaluating managed IT services as a solution for IT support, there are two types of cost savings to consider as you decide on outsourcing IT. First, managed services will lessen downtime and improve productivity, which supports profitability. Most organizations will discover that managed IT services cost less than building an in-house team, another savings opportunity. Longstanding research by CompTIA shows that managed IT services can help businesses save as much as 24% on IT costs with operational improvements alone, so it’s worth investing the time to consider an MSP partner as part of your financial planning.

Let’s talk through the ways partnering with a managed services provider, or MSP, can improve your financials—and drive more effective business operations.

Managed IT Services Reduces Downtime

How does that save your organization money? Stick with us here.

When a business is down – even just one element of its technology, such as the internet, phone system, or point-of-sale products – the impact is costly in terms of money lost, productivity drain, and reputation damage. While nothing can prevent every IT outage, engaging with an MSP can reduce the number and scope of preventable outages.

By taking a proactive and systematic approach to monitoring and maintenance of your IT network, MSPs help businesses create a more stable foundation for business IT products, meaning your organization will run more smoothly, and greatly reduce downtime.

In a report by Gartner, the research firm estimated that, by outsourcing network monitoring and maintenance to a managed IT service provider, organizations can reduce the frequency of downtime by 50%. Imagine the competitive edge that could offer your business. Plus, even when downtime does occasion happen, with a dedicated IT support team working to remediate the issue, your organization will likely be back up and running more quickly.

Get our guide to disaster recovery planning so this doesn’t happen to you

Optimize Your IT Budget with Managed IT Services

No one likes surprise bills.

While every business understands that unexpected costs happen, your IT expenditures do not have to fall into that category. Managed IT services agreements eliminate fluctuating, arbitrary IT costs. Instead, your business will enjoy easily budgeted monthly costs, bringing steady predictability to your company’s budget. In addition to simplifying IT spending, MSPs guide organizations through the technology lifecycle, enabling well-informed financial forecasting and aligning your IT strategy with business objectives. By looking at technology as a long-term investment, your organization gains a clear roadmap for systematic IT improvements, further eliminating unplanned outages and reducing unexpected IT costs.

You can also reduce your IT budget by taking advantage of procurement opportunities with your MSP. Most managed IT services firms have close relationships with their key vendors, helping reduce costs for IT investments. They also work closely with vendor partners to explore innovative technologies to identify what new IT solutions work best for customers, helping your organization take advantage of cutting-edge tech with less risk.

Compare the Cost of In-House IT Vs. Managed IT Services

When it comes to exploring options for IT support, there are two options: hire or outsource. Any business knows that as tempting as it is to hire your own team of experts, the cost can be staggering. Compared to investing in a full-time person to manage your organization’s network, handle daily support tickets, and troubleshoot large IT issues, an MSP is an affordable alternative. In fact, the average cost of IT support services is almost always less than hiring a full-time technology specialist. A survey by CompTIA revealed that the average annual salary of an in-house IT manager in the US is $113,000, compared to the average cost of IT support for small businesses in the U.S., which is about $40,000 a year. By outsourcing your IT support and network management to a managed IT service provider, you could save up to 40% on labor costs.

Keep in mind that, budgets aside,  hiring technical talent can be challenging. A well-publicized shortage of tech talent has made finding and hiring IT specialists a daunting task. That hurdle grows larger if no one in your organization has the technical knowledge to thoroughly vet potential hires.

Lastly, with the fast pace of technology, ongoing training and certifications are a must for any IT support team or technical engineer. With managed IT services providers, that professional development, training, and certification cost is absorbed by your partner. Otherwise, your organization is faced with additional costs each year to keep your in-house person or team updated on technology products and vendors.

Top Cost-Cutting Benefits of Using Managed IT Services

Cost-cutting opportunities abound with managed IT services, particularly for small to mid-sized businesses. In fact, research shows that a successful managed IT services partnership can help reduce IT costs by 25%-45% and increase operational efficiency by 45%-65%.

We’ve discussed several key ways that happens, but a few more things to consider:

• According to a study by IBM, the average data breach costs an organization as much as $3.86 million. By outsourcing cybersecurity to a managed IT service provider, you can reduce the risk of a data breach by 25%, often simply by addressing common vulnerabilities and conducting security awareness training with your team.

• User experience is everything, particularly when your revenue is tied directly to productivity, such as with law firms or other services businesses. By reducing downtime significantly by using managed IT services to stabilize your IT environment, you can see steady if not increased productivity. Plus, employees will no longer be frustrated by technology failures or outages.

• Managed IT services are purpose-built for scale and flexibility. Not only do MSPs build the team and processes for responsive 24/7 IT support, but they can quickly scale for project work, disaster recovery, or simple business success that leads to fast growth. With an in-house team, your costs will quickly rise, and staffing for bumps in activity or a one-time challenge such as software deployment can stress budgets.

While nearly any business can cut costs by leveraging managed IT services, small to mid-sized businesses will find that partnering with an MSP can deliver budget predictability and a long-term vision for IT investments that add to the stability of their organization.

Ready to explore partnering with an MSP? Learn more about Exigent’s Assurance Managed IT Services tiers