If you've ever wondered what the term "MSP" means, you are not alone. The abbreviation stands for "Managed Service Provider." Typically, you would outsource "services" to an MSP for management.
Why are MSPs skyrocketing in popularity? Well, it's a strategic tactic used by an increasing number of global organizations to improve operational efficiencies without having to incur the direct costs and time of managing these outsourceable services themselves. Outsourcing is hardly a new concept, and it's becoming mainstream. Find out why you need an MSP and how they operate.
What are managed service provider services?
Considering the inefficient break-fix IT tradition, managed service provider services break away from the outdated mold. It’s a permanent method for enhancing IT services. Instead of waiting for a problem to fix or anticipating disaster to strike at any moment, whether it be a hard drive crash, servers slowing to a halt, or overheated devices, managed services take the proactive approach of addressing potential issues and risks before they cause long-term and expensive damage.
There is a better way to the break-fix strategy. The objective is to prevent emergencies so employees can spend less time waiting for repairs and more time doing what they were hired to do. Managed services are designed to make life easier for companies by proactively detecting and fixing potential issues. Using remote monitoring technologies, managed services providers can monitor your IT infrastructure 24/7, so you can focus on strategic initiatives like growing your company.
What types of services might an MSP offer?
Here are a few of the many areas where MSPs stand out:
- Managing user access to accounts on company systems
- Managing software and applications
- Adding cyber security services
- Offering a cloud-based IT infrastructure and hosting
- Managing onsite and off-site IT infrastructure
- Offering technical and help desk support
In addition, MSPs can provide difficult-to-find IT expertise without the price tag of paying an annual salary and benefits per IT employee.
Benefits of partnering with a managed service provider
There are many benefits of contracting the services of an MSP, including:
- Adding resources incrementally to scale when needed
- Access to experts 24/7
- On-demand support
- Replacements for staff shortages
- Reduces the issue of IT professional shortages
- Backup and recovery to mitigate potential data loss
Whether you need one service or an entire IT team on call, an MSP can offer these types of services and more. Also, you will always have access to the latest technologies without a significant upfront capital investment.
Why do I need an MSP?
Over the past two years, the managed services market has grown to around $193 billion. The demand is strong, and businesses of all sizes use MSPs. There are specific strategic advantages, and we list them below.
Focus on the ROI
Partnering with a managed IT services provider can offer considerable cost savings from the standpoint of controlling IT spend while increasing ROI. For instance, the typical IT budget consists of hardware costs, IT labor, software, network infrastructure, storage, and maintenance costs. Moreover, using outdated software incurs a negative ROI due to the risks involved.
Also, utilizing MSP services provides the agility and scalability to grow that goes far beyond what internal IT departments can offer. With an MSP, you can conveniently predict your monthly IT costs, which helps when planning for larger initiatives.
- Free up the IT department
Working with a managed IT services provider optimizes your internal staff's time to spend on other more pressing projects. They will have more time to meet other deadlines. Also, an MSP can help to optimize your IT budget.
Would it make sense to ask your IT Director to manage the migration to Microsoft Office 365 when an MSP can handle that for you and with expertise? As a result, an MSP can relieve work-related pressure from your onsite IT team.
- Improve security and compliance
Today, every organization is concerned with security and compliance; rightly so. Every industry is increasingly regulated. Moreover, as companies increase their digital footprint, they also increase the risk of a data breach without adequate cyber security protocols. One substantial data breach can cause irreparable reputational damage and financial loss.
On the other hand, managed service providers can take immediate action in a data breach and remediate the issue right away. All businesses must also remain compliant with specific local, state, national, and global regulations. An MSP can ensure IT infrastructure compliance.
- Ensure reliable IT operations
Inefficiencies and inconsistencies are the results of having limited IT human resources and limited IT knowledge and skills. In the digital era, it makes sense to employ a reliable IT partner. With an MSP, you get a collaborative partnership that enhances your current IT capabilities.
You can resolve issues more quickly while having access to the latest technologies that optimize profitability and uptime. Whether it’s desktop hosting or remote monitoring and management, the increased demand for MSP services is to ensure your entire IT infrastructure is operationally efficient.
- Access a wide variety of solutions
An MSP can also offer customized solutions tailored to align with your business needs and business processes. You get to work with secure systems used for managing your business and client information.
There isn’t any question that advancements in technology have transformed the future of work. Today, the changes happen so quickly it’s not easy for any organization to keep up without additional IT support.
- Take the proactive approach to maintenance
Another reason why you may need an MSP is so you can spend less time worrying about the speed of your network connections or their reliability. An MSP offers the convenience of around-the-clock monitoring and maintenance.
Besides, they offer cyber security solutions to detect vulnerabilities and threats. They also provide the resources to fix any threats before they become detrimental to the organization. You get proactive cloud hosting, virtualization, and backups. It is a laser-focused option, and you don’t have to invest in or maintain expensive hardware. Below are a few more benefits of partnering with an MSP.
- Cost of qualified personnel: There is a global shortage of IT professionals who command high salaries.
- Lack of expert staff: Do you have enough team members onsite to manage maintenance effectively?
- Expense of consistent maintenance: If maintenance wasn’t an issue, your onsite IT team could focus on strategic projects such as DevOps or updating your CRM system.
- Advanced technologies: You could hire a team of IT professionals to build, manage, and troubleshoot your systems. However, this is the most costly option and the least reliable as issues will always come up eventually.
How much do MSPs charge?
The most significant factors determining their prices are the services provided and the grade of involvement needed from your dedicated IT support team.
A vital question is determining how much MSPs charge and if their prices fall in line with your budget. For the most part, an MSP offers access to an entire IT department at a fraction of the cost. Other considerations on pricing include the complexity of your current infrastructure and what types of services are required to run your organization securely and effectively.
Lower your organization's overall IT spend
It’s been proven that the right technologies can solve a myriad of business issues while saving money. However, many companies don’t have the expertise to determine the right mix of technologies to use.
The common practice is to budget for the latest and greatest new technology on the market and add it to an already complicated and outdated tech stack. This strategy causes more problems than it solves. On the other hand, if you hire a full-time IT team, will you have enough work to keep them wholly occupied?
According to Gartner, the healthcare industry spends about 4.5% of their revenue on IT, on average. Also, Alinean Inc. has found that enterprise companies spend about 3.2% of their revenue on IT at about $11,580 per employee. Here are some other findings:
- Mid-size companies spend around $13,100 per employee on IT costs.
- Small businesses spend around 6.9% of revenue on IT.
MSP vs in-house personnel
A primary factor for figuring out your ROI is to consider the costs of managed services relative to hiring a large and full-time IT team. It makes better financial sense for mid-size and smaller companies to partner with an MSP instead of hiring database administrators, help desk staff, security administrators, and an IT director to manage it all. With an MSP, you pay a fixed monthly price for all those services and use them when needed. If you require additional expertise, you can add it to your monthly rate.
Therefore, it is easy to determine your ROI if you take your IT team’s salaries, including the costs of recruiting, hiring, training, and administration, and use it for your calculation. Now, compare the number to the monthly billing structure offered by an MSP. Managed services providers work to provide the most efficient service possible. They reduce their costs by sharing the expense of training, hiring, education, and administration across several clients.
Calculate revenue lost to downtime
Every computer or computer system breaks at some point or another. It is crucial for you to take a long, hard look at your system outages over the past year and estimate the impact on the business.
Unquestionably, every system or device will break down at some point. It’s critical to determine the impact of downtime on your business by dividing your total annual revenue by the number of business hours in a year. Next calculate the downtime on your email, servers, devices, or network over the past year. Multiply your revenue per hour by the total number of hours of downtime.
How much did downtime cost your organization over the past year? How much could you save by partnering with a reliable MSP to manage and remediate downtime?
SSI – Leading Managed IT Service Provider
It’s not easy for organizations to manage the pace of technological innovation. Bugs and breaches can incur significant losses of time, money, and reputation. However, SSI offers onsite and remote support, IT support, cyber security services, desktop hosting, IT consulting, and integration services. With SSI, you don’t have to let IT hold your organization back.
How can you tell if you need an MSP?
SSI’s managed service provider services are scalable, so you can get as many or as few services as you need -- everything you require and nothing you don’t. Ready to discuss customized solutions with one of our in-house experts? Call or click today.