•   Jason Simons
  •   Aug 20, 2020

How Do You Buy Managed IT Services?

The simple answer is this: You purchase managed services via a monthly subscription plan. What’s included in this plan will determine the types of Managed IT Services and support that is required.

Your organization’s IT setup is unique —It will never match another company’s configuration even if you’re in the same industry. Managed IT Services are tailored to fit your unique needs.

Purchasing Managed IT Services

What Should You Know Before You Purchase Managed IT Services?

When you first contact a Managed IT Services Provider (MSP), explain why you need to buy their services. They can help you decide which type of IT service you need: 1) Reactive Service or 2) Managed Service.

1) With Reactive Services everything is an emergency —You call for help when there’s an issue.

2) With Managed IT Services, crises are avoided because your IT system is continuously monitored for potential problems.

Here’s how each service is broken down:

  • Reactive Services – Data loss, device failure, network failure, viruses, and malware
    • Break/Fix – You pay an hourly rate as each issue occurs.
    • Responsive – You pre-purchase a block of hours.
  • Managed Services – Data availability, data uptime, network uptime, malware-free devices
    • Proactive – Your contract follows a checklist of preventative maintenance tasks.
    • Managed – You outsource the IT at a fixed monthly investment.
    • Utility – You pay based on usage.

Some MSPs prefer to promote Reactive Service over Managed Services. Under this model, there are no guarantees. The fix will be made but could reoccur because it doesn’t get monitored as it would with Managed Services. We must point out that Reactive Service provides no benefit to your company where Managed Services does.

Do Managed IT Services Involve Contracts?

Yes, Managed IT Services fall under two contracted services:

  1. The Master Services Agreement (MSA)
  2. The Service Level Agreement (SLA)

These spell out in detail the definitive contract durations and managed services terms. They also define the relationship between the business requirements of the customer and the services that get delivered by the provider.

  1. The Master Services Agreement provides the complete scope of services that you’re contracting from the service provider. It spells out the service methods and processes, data privacy requirements, and financial penalties for failing to meet the terms of the service contract.
  2. The Service Level Agreement describes the guarantees in service you will receive. These performance guarantees may include infrastructure uptime and availability, service incident response time, and data recovery time objectives. Typically, companies will set allowable thresholds for the performance guarantees and require the service provider to pay financial penalties if limits are breached.

The contracted subscription terms can vary. The provider may bill using either a flat-monthly or pay-per-use billing model depending on the nature of the service. The subscription price is typically determined by one or more of the following variables:

  • Number of users and devices
  • Number and Type of managed services
  • Types of functions and features that get delivered

What Is The Return On Investment (ROI) For Managed IT Services?

With managed services, businesses can shift their spending strategy, free up resources, and potentially cut costs. When calculating ROI from Managed IT Services consider the list below:

Frees Up Cash Flow

Traditionally, IT expenses are categorized as capital expenses or CapEx. With Managed Services, you can move away from a CapEx model to operational expenses or an OpEx model. This allows you to write off your services as an expense on your taxes. And there are no upfront costs — You pay a predictable monthly fee that’s easy to budget for.

Expertise Without Hiring A Full-Time Employee

Keeping an IT environment running smoothly requires constant attention and the availability of highly-skilled staff. By taking advantage of Managed Services, you can eliminate the burden of finding and retaining talent with all the necessary skills and certifications. You also won’t have the employment costs like benefits, workers’ compensation insurance, and Social Security contributions.

Downtime

Businesses have become heavily dependent on IT. This increased reliance on mission-critical applications and 24/7 access to data make high availability a top priority. Managed Service Providers help to ensure that uptime, security, and redundancy requirements are met.

Frees Up Staff To Be More Productive

CIOs are not only tasked with the management of IT, but also with supporting business growth by reducing costs. Today, organizations are also being asked to do more with fewer resources. MSPs are a vital component to ease this burden and free up IT staff to focus on strategic, mission-critical projects.

Enhanced Levels of Service

Many MSPs offer a comprehensive suite of services such as cloud infrastructures, applications, databases, networks, and security management solutions. They employ best practices and use the ITIL (Information Technology Infrastructure Library) approach which focuses on aligning IT services with the needs of your business. Many internal IT departments can’t match this level of service.

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