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Cost and Productivity Benefits of a Managed Services Approach

Posted on Tue, Nov 1, 2011

Managed servicesIndividual businesses who have adopted a managed services model for their IT needs know that the benefits of such an approach are easily quantified in terms of lowered costs and improved productivity.  Small and medium-sized businesses who are just starting to dip their toes into the waters of managed services, however, may want to see data on this point before exploring this option further. 

Such data is now available thanks to a study conducted by a leading non-profit analysis association for the IT market.  This study has concluded that nearly half of companies using a managed services provider have reduced their yearly IT expenditures by at least 25%.  In some cases, the cost decrease was significantly more than 25%.  Furthermore, the other half of companies using a managed services model cut their costs by as much as 24%.  In the final analysis, approximately 96% of companies saw their IT costs decline once a managed services model was implemented.

The Productivity Advantage

The true level of benefit to be gained from a managed services approach, however, is far in excess of the numbers cited in that analysis.  This is because the study only examined IT expenditures.  It did not look at the ‘side benefits’ that a managed services model can provide.  These include a significant boost in productivity.

Why does productivity go up when a managed services model is in place? There are two reasons.  First, IT infrastructure becomes more reliable, which means less downtime.  Second, company staff that used to devote part of their working time to IT tasks can now use that time for projects that generate revenue.

 

Tags: Managed Services, Infrastructure, Cost Effectiveness

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