How Much Should You Be Spending on Managed IT Services?


One common question we receive is ‘How much should I spend on managed IT services?’

We know that’s why you’re reading this blog, but the honest answer is that the cost of managed IT services is different for every business. As with most business services, there is no one-size-fits-all approach—which is why you’re investigating managed IT services in the first place.

Why should your business outsource to a Managed Service Provider?

Firstly, let’s discuss why you should be spending your business’s hard-earned budget on managed IT services. Managed Service Providers, or MSPs, help to ensure complete coverage of IT tasks and can provide your business with specialty knowledge or expertise that may not otherwise be available. Think of it as instead of hiring just one IT specialist within your business, you can instead hire a whole team of IT experts, each with their own skills and specialities, without the recruitment and salary expenditure.

Companies with existing IT employers can also benefit from externally outsourcing to an MSP. When you have the option to outsource ongoing, day-to-day IT tasks to your MSP, your internal IT team now has the time and resources to focus on value-adding and revenue-generating projects. Additionally, MSPs can perform integral system updates and maintenance out of business hours, which means fewer disruptions or down-time for your business and less overtime for your internal IT team. 

Your MSP can help improve your internal IT team by providing additional training and guidance to improve your business’s IT practices.

How much do managed IT services cost?

So while we can’t give you a hard-and-fast price on what you should be spending on managed IT services, we can help you understand better what factors will affect your IT spend. Every business is different and so the level of IT support will vary depending on your business size, industry, requirements and future plans.

As a general guide though, the average cost of managed IT services according to research from Deloitte, is roughly three and a half percent of their total business revenue, averaged out across all industries. 

It is important to remember when considering your managed IT services budget that spending money on IT is a direct investment into your business.  After all, wouldn’t you rather know that your business’s IT needs are resolved rather than make a small cost saving?

Managed IT Services Pricing

There are three distinct pricing structures that can change what your IT spend looks like.

Per hour. Under this model you’re charged at an hourly rate for your managed IT needs. This is one standard rate, regardless of the service, urgency, or time taken. 

Per project. You will be charged at a set rate per project. This structure focuses more on the outcome, rather than the time it takes.

Per month. This pricing structure covers your full-time managed IT service.

Managed IT service models

There are two main models that determine the level of service you’ll receive. 

Partially managed IT services

Partially managed IT services are designed to fit around your existing IT team. Under this model, your managed IT services provider integrates with your internal team, providing support and solutions in areas where your internal team may not have the expertise or capacity. You’re able to choose the services you specifically need, and allow your internal team to focus on business-specific task and actions.

This can include support like delivering enhanced cyber security monitoring and solutions, providing thorough data backup and cloud hosting services, or even simply providing extra IT support during times of high workload.

Think of this as a part-time, on-demand solution, so naturally it will deliver a lower spend than a fully managed IT solution.

Fully managed IT services

Under a fully managed IT service model, your managed IT provider takes care of the full scope of your IT needs for you. You get complete IT support and coverage from an expert and experienced team, who provide full-time monitoring to ensure your business’ tech needs continue running smoothly, around the clock.

Fully managed IT services take a different approach to regular IT: it’s proactive, rather than reactive. This ensures your business has IT solutions in place to ensure that your network, software, and systems are always running at their optimal performance levels, identifying and adjusting issues before they even have the chance to become errors. Your managed IT service provider acts as a consultant, rather than a contractor, working with you to put long-term IT solutions in place.

Another big benefit is that your IT needs will be streamlined through one central contact. So instead of logging a service call, you can connect directly with your IT provider, who can then ensure you get the service you need.

The cost of not having managed IT services

While managed IT services will likely cost more upfront than traditional IT support, the cost of not having an experienced and proactive IT provider by your side can be much, much higher—particularly in terms of data security, and downtime.

Improved data security

An error in your business’ email server, network, or any key parts of your IT infrastructure can effectively put your business out of action. If you don’t have an IT provider delivering around the clock support, your business will have to wait for the next availability to engage the services of an expert. Managed IT services will provide you with regular automated data backup, so your business’ data is as up-to-date as possible should anything go wrong. 

Related Article: Top Cyber Security Issues in 2021

Reduced downtime

We all know that cyber threats are becoming more common, and it’s only a matter of time before most businesses will find themselves under attack of some kind. And while your employees have the knowledge and skills to protect themselves from phishing attacks and dodgy, ransomware is becoming much more sophisticated. One single ransomware attack can cause your entire business operations to shut down, with your data completely encrypted until you pay the ransom. Just look at what happened to Toll Group in 2020.

How long do you think it would take your business to recover from that?

Your managed IT service provider ensures you’ve got comprehensive and secure data backups in place, and up-to-date cyber security software installed, to provide you peace of mind that your business is ready to combat cyber threats that come your way.

You can’t put a price on peace of mind

At the end of the day, would you rather make a saving, or take comfort that your business’ IT needs are sorted? So don’t think of it in dollar terms; instead, focus on the overall benefit, value, and long-term savings you receive instead. 

Get in touch with InfoTech Solutions to discuss a managed IT services solution for your business.

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