In a series of blogs, we bust the myths surrounding Managed Services. This blog discusses why Managed Services is not an “expensive”, but a cost-effective option to manage your business applications.

Hourly IT downtime costs have risen 32% in the last seven years. In 2021 alone, 91% small and medium enterprise (SME) and large enterprise customers estimated that an hour of downtime cost $300,000 or higher, while 44% showed hourly downtime costs over $5 million.

  • The reason – Internal IT services teams in these organizations do not seem to have the time, skill, and bandwidth to constantly monitor the IT infrastructure, provide IT support on-demand, and resolve problems as and when they appear.
  • The result – Productivity of the IT teams comes down, infrastructure costs go up, and business agility gets adversely affected.

One way to overcome these challenges and get expert-level support without having to spend a lot of time is to opt for Managed IT Services. While the need for Managed Services is more pressing than ever, companies still consider Managed Services to be ‘too expensive ‘and/or ‘a waste of money.’

This perception of Managed Services being ’costly’ stems from what a buyer (CIO and IT Head) senses that they will get (or not) for effective management of complex IT environments, customization, and integration. Invariably this translates to ’no guaranteed cost savings’. Given this all-too-common perception, companies prefer to keep their IT support in-house.

Penny wise, pound foolish?

What most organizations fail to realize is that they need to spend beyond ‘salary,’ on employee benefits, taxes, office space and facilities, recruitment, learning and development, and management while considering an IT team in-house.

On the other hand, engaging with a Managed Services Provider (MSP) who has an entire team of experienced specialists to provide maintenance services 24×7 at a fixed monthly/quarterly cost is economically more viable. This is because most MSPs bring to the table the advantages of repeatable learning and best practices, IP, and accelerators for speed to business value, and near-shore teams with the right skill mix.

Benefit of Managed Services: Long-term cost savings

Research shows that successful deployment of Managed Services will help reduce IT cost by 25%-45% and increase operational efficiency by 45%-65%. Cost reduction leads to savings in both capital expenditure and operational expenses while also enhancing the end-user experience. This is because Managed Services enable businesses to optimize their IT investments – cloud environments and business applications, employees, and other costs. Continuous remote monitoring of IT infrastructure can help to anticipate and address issues beforehand, reducing instances of IT downtime, data breaches, and associated costs, including liabilities.

A fixed periodical payment mechanism (that is agreed upon) helps stakeholders break down the MSP’s fee into standard operational costs based on the service contract. This provides stability in planning, allowing companies to budget for other strategic business initiatives.

Getting the most out of Managed Services

There must be a clear definition of the scope of service levels – tasks to keep systems operational and stable. The MSP’s offering must be well-defined to give customers various entry points to engagement. Companies can start small with limited ticket-based support and scale up to initiative-taking environment and application services. The right MSP will be transparent in their pricing, without charging any hidden fees or pushing for unwarranted investment in technology.

It is also important that companies make sure that the MSP’s technical expertise is available across all time zones. This ensures a consistent experience to customers across the globe.

Managed Services from sa.global

sa.global provides Managed Services with an understanding of the client’s needs and expectations to ensure better user experience, visibility, and control over operational spend, scalability, and stability. We map our Managed Services upon the Information Technology Infrastructure Library (ITIL) processes and experiences across client profiles.

Keeping a client’s key objectives in mind, we define our Managed Services offerings to render operational coverage through SLAs (Service Level Agreements), provide clear visibility of expense, and work to improve experience. To cite an example, our engagement with a European Energy and Gas company helped them improve their user satisfaction to over 50% in CSAT scores.

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