IT Managed Services Agreements: 3 Ways to Save You Money

Technology provides key support for today’s business operations. But despite expanding reliance on technology, growing IT complexity, mounting IT workloads, and aging hardware and software – tech budgets are not increasing proportionately. Spiceworks 2015 IT Budget Report notes that only one-third of IT pros surveyed at the end of 2014 expected an increase in budget, and just one-quarter planned to add new employees, over the next 12 months.

So how can an organization manage a limited IT spend judiciously – without putting business at risk?

The Managed Service Solution

More and more, companies are outsourcing components of their IT operations to managed services providers (MSPs) to balance budget with a sufficient level of service to end users. New research from CompTIA, a non-profit trade association, shows that more than two-thirds of companies surveyed have utilized outside managed IT services within the past 12 months, and 21% are outsourcing or have a contractual arrangement with a managed services provider for ongoing responsibility for some or all of their IT functions.

Turning to an outside source can initially seem counter-intuitive to saving money. But by taking a look at the main factors driving the business decision to outsource IT to an MSP, we can offer some better insight into how managed services agreements can offer significant advantages for your company. Here are 3 ways managed services agreements can save you money.

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Regulate Cash Flow

Accurately forecasting when you spend money is nearly as important as how much you spend. The fixed monthly rate billed by your IT provider for ongoing, proactive technology management makes your cash flow more steady and predictable. In CompTIA’s study, predictable pricing was a driver for 13% of companies with 100+ employees – and for a larger percentage (20%) of smaller companies (<100 employees) that may have a harder time weathering a technology failure or an unexpected break-fix expense.

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Proactive IT Service

The most cost-effective way to deal with a technology problem is to deal with it before it’s a problem. With a managed services agreement in place, regular updates, security patches, and performance checks are ongoing. CompTIA reported a proactive approach to IT maintenance as a driver (27% for companies with 100+ employees/31% for companies with <100 employees). Proactive IT services can improve the efficiency and reliability of your IT operations (another CompTIA top driver at 56% for companies with 100+ employees/47% for companies with <100 employees) and lead to lower costs, decreased downtime, and better performance.

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Focus on Business Goals

A less tangible but no less significant benefit of a managed services agreement is in the value of the relationship you build with your MSP. Traditional break-fix IT doesn’t allow your IT services provider much insight to your ongoing needs. They come in, fix the problem, bill you for their time, and they’re onto another client. Longer-term managed services agreements position MSPs as partners that gain a better understanding of your business over time. Strategically, MSPs can help you surpass the use of technology solely as functional support, and transition to a more sophisticated level of integration between your technology and your business goals. In addition, MSPs provide access to the latest technologies, a luxury that a restrained IT budget may not be able to afford as part of its internal infrastructure. It’s a driver that CompTIA reports at 21% for companies with 100+ employees and 28% for companies with <100 employees. 

What does proactive IT look like for iCorps' clients? Find out in this quick video:

 
 

If you're looking for a different class of managed service, our experts can help. From cloud computing to compliance, we can customize IT solutions to meet your unique business needs. For more information, please reach out to iCorps for a free consultation.

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