Tech Pro Space LLC
Tech Pro Space LLC

Exploring the Cost Savings of Managed IT Services

05/18/2023 01:31 PM By Vicente Agama

Exploring the Cost Savings of Managed IT Services

When it comes to managing the IT infrastructure of a business, there are two primary choices: an in-house IT department or a managed IT service. While both options have their own sets of advantages, today, we’re focusing on the cost savings that can be achieved through leveraging a managed IT service.

What Are Managed IT Services?

Before diving into the cost savings, let's establish what managed IT services are. Managed IT services involve delegating your company's IT operations to an expert third-party organization that specializes in handling these responsibilities. These third-party organizations, known as Managed Service Providers (MSPs), are responsible for the entirety or portions of a business's IT systems, as agreed upon in a Service Level Agreement (SLA). Services provided by an MSP may include network management, data backup, cybersecurity, and system monitoring.

Potential Cost Savings

There are several key areas where managed IT services can offer significant cost savings:

  1. Reduced Labor Costs: Hiring and training an in-house IT staff can be expensive. By outsourcing, you eliminate the costs associated with recruitment, benefits, training, and turnover.
  2. Efficient and Reliable IT Operations: Managed IT services bring deep knowledge and broad experience to the table, leading to more efficient and reliable IT operations. This efficiency can reduce the time and resources your company spends on IT tasks, translating into savings.
  3. Decreased Downtime: Unplanned downtime can be incredibly costly. MSPs proactively maintain your IT infrastructure, reducing the risk of downtime and the associated loss of productivity and revenue.
  4. Predictable Monthly Costs: Managed IT services typically operate on a subscription basis, meaning you pay a consistent fee regardless of how much support you need each month. This allows for more predictable budgeting compared to the variable costs of in-house IT.
  5. Access to Latest Technology: MSPs constantly update their knowledge and tools to stay competitive. This means your business gets access to the latest technology and IT practices without having to invest in updating your own resources.
  6. Enhanced Security and Compliance: MSPs specialize in managing IT and, as a result, can keep your company up to date with the latest security standards and industry compliances. This not only helps protect your business but also saves you from potential fines and penalties associated with data breaches.
  7. Scalability: As your business grows, so does your IT needs. Managed IT services can scale with your business, helping you avoid large, unexpected expenses associated with upgrading your IT infrastructure.
  8. Reduced Energy and Facility Costs: By outsourcing your IT, you can reduce the amount of physical space needed for servers and other IT infrastructure, leading to savings on energy and facility costs.
  9. Focus on Core Business: Outsourcing IT services allows your employees to focus on their core job functions instead of IT issues. This can lead to increased productivity and efficiency, contributing to your bottom line.
  10. Reduced Risk of High Impact IT Disasters: MSPs usually offer disaster recovery and backup services to ensure your data is safe and can be restored quickly in case of a disaster. This can save you from potentially catastrophic costs associated with data loss.

Case Study: A Tale of Two Businesses

To illustrate the cost savings, let's look at two hypothetical businesses: Business A and Business B.

Business A chooses to maintain an in-house IT team. They hire a team of five IT professionals, each earning an average salary of $70,000 a year. Including benefits, taxes, and overhead, let's estimate the true cost at $100,000 per employee. That's a total cost of $500,000 annually.

Business B, on the other hand, chooses to use a managed IT service. They pay a monthly fee of $10,000 for a comprehensive package that includes all of their IT needs. This comes to a total of $120,000 annually.

Over the course of a year, Business B saves $380,000 by using managed IT services. And this doesn't even factor in the potential costs of downtime, emergency repairs, or employee turnover that Business A might face.

Wrapping Up

As you can see, managed IT services can offer significant cost savings for businesses. By reducing labor costs, increasing efficiency, decreasing downtime, and providing predictable monthly costs, managed IT services provide a compelling financial case over in-house IT solutions.

While every business is unique and savings can vary, managed IT services offer the potential for significant financial advantages. Curious about how much your business could save? Contact us today to discover the potential cost savings for your business with our managed IT services.

Vicente Agama