July 29, 2021
Managed IT is an investment—and as with all investments—it's normal to consider the return it can bring. When it comes to Managed IT, there are a number of benefits that directly translate into cost savings.
Before we dive in, I want to point out that Managed IT Services can help businesses achieve a variety of corporate initiatives. An IBM white paper, Business Value of Managed Services, stated, “According to IDC (International Data Corporation) 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.”
IDC conducted research on the value that Managed IT provides businesses. Overall, their research found that for every 100 users, just under $400,000 could be saved annually. Let’s take a closer look:
Financial Benefits of Managed IT
In a lot of ways, Managed IT 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 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 few ways Managed IT 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. And 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 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
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 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 helps 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 Managed IT, 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 Managed IT, you won't have employees waiting for someone to figure out their technical problem to 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 Services, 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, your provider can support them. Similarly, if you're not using a certain application in cloud computing, you can easily get rid of it.
Managed IT Services offers the ultimate in flexibility, capable of expanding and contracting based on your business needs. This is particularly useful in your business' 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.
Now, Back to ROI
While cost savings can clearly be seen in the research, return on investment is still an important calculation to make. Within the IDC study, the average investment per organization was $274,326 per 100 users. They saw a return on that dollar amount in less than six months and an overall ROI of 224%, according to their three-year ROI analysis.
See the full study and results here.
Naturally, before making a decision about whether to use a Managed IT Service, you need to assess the benefits to understand if they align with your business objectives.
Benefits of Managed IT Services
Regardless of whether you run a large or small business, Managed IT offers several benefits. For each of the above benefits, think about the potential impact on both your daily work and your bottom line. Consider the benefits and how you could reinvest those saved dollars back into your own business.
By using Managed IT, you'll have consistent monthly costs, be able to scale as necessary, have immediate access to experts, and won't need to spend a significant part of your budget setting up infrastructure. The benefits of Managed IT could be just what your business needs to take it to the next level.
Take a look at this case study that shows how Marco provided Wright Technical Center with an IT roadmap that enhanced their capabilities and prepared them for growth.
To discover what Marco's Managed IT Services, now called AmplifyIT, can do for your organization, contact one of our Managed IT specialists.