How Do You Buy IT Managed Services?

The simple answer is, you purchase managed services on a monthly subscription plan. What’s, in that plan, will determine what types of IT Managed services and support is needed. Meaning, your business or organization’s IT setup is unique. It will never match another company’s configuration, even if both firms are in the same industry. IT Managed services are tailored to fit your specific needs.

What Should You Know Before You Purchase IT Managed Services?

When you first contact an IT Managed services provider, explaining your need to buy their services, there is basically, two types of IT services you need to be aware of: 1) Reactive Service and 2) Managed Service.

With Reactive it’s an emergency, and your system has crashed, where with Managed the crisis is avoided because the system is continuously monitored and detects potential issues. Here’s how each service function breaks down and looks like:

  • Reactive Service Stage – Data loss, device failure, network failure, viruses, and malware
    • Break/Fix – you pay an hourly rate as each issue occurs
    • Responsive – you’re required to pre-purchase a block of hours
  • Managed Service Stage – 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

There are some managed service providers, who prefer to promote the Reactive Service over the Managed Service. Under that model, there are no guarantees the fix will last but could reoccur because it doesn’t get monitored, as it would under Managed Services. But we must point out though; Reactive provides no benefit to your company, where Managed always does.

Will IT Managed Services Use Contracts?

Yes, Managed services fall under contracted IT services. The Master Services Agreement (MSA) and a Service Level Agreement (SLA), spells out in great detail, the definitive contract durations and managed services terms. These two documents define the relationship between the business requirements of the customer and the services that get delivered by the provider.

The Master Services Agreement provides the complete scope of services the stated business is contracting from the service provider. The document spells out the service methods and processes, data privacy requirements, and financial penalties for failing to meet the terms of the service contract.

What the Service Level Agreement describes the performance guarantees the service provider is making related to the contracted services. 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 get 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 typically is 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 ROI of IT Managed Services?

With managed services, businesses can shift their spending strategy, freeing up resources and potentially cutting costs. When calculating ROI consider the list below:

Opening Up Cash Flow

Traditionally, IT expenses get categorized as capital expenses or CapEx. With managed services, you can move away from a CapEx model to operational expenses or OpEx model. So, now you only pay for the services you need, when you need it, reducing in-house IT costs.

Expertise Without Hiring a Full-Time Employee

Keeping an IT environment running smoothly, does require constant attention and the availability of highly-skilled staff. By taking advantage of managed services, companies can eliminate the burden of finding and retaining talent with all the necessary skills.

Downtime

Businesses have become heavily dependent on IT. That increased reliance on mission-critical applications and 24/7 access to data, make high availability a top priority for IT. Managed service providers will help ensure uptime, security, power, and redundancy requirements get met.

Cost Savings

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

Enhanced Levels of Service

Many managed service providers offer a comprehensive suite of services such as cloud infrastructure, application, database, network, security management solutions and often, employ best practices, especially the ITIL (Information Technology Infrastructure Library) approach. Many internal IT departments can’t match this level of service.

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Category: Atlanta IT Service Articles, Date: 29th April 2019, Author: Chris Chao

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