Understanding Managed IT Services

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As a business owner, you hear buzzwords every day “Cloud Services” or ”Managed IT Services,” and it seems like every business is jumping on the bandwagon. What do managed services really mean, how will it help your business bottom line, and how will you know that the company you choose is equal to another? Most it companies start by offering “break-fix” support because that is what they are used to and they will still only come and fix the issues after it has occurred. I am writing this to know what “flat rate” services mean and your business, your livelihood, is not being taken advantage of.

Managed services is a new approach that has gained a lot of popularity in recent years, mostly because of the stagnation in profit margins. Companies can no longer afford to have a true IT professional on-site. Managed Services allows for the business to outsource IT operations to a Managed Service Provider (MSP). A managed service provider assumes the 24-7 responsibility of managing the business network. That typically includes monitoring all IT devices, managing that infrastructure, including helping management with IT policies for that particular business, and problem resolutions backed by an SLA and helpdesk.

It started with the traditional break-fix services.

When you start your business, your information technology is the last thing that is on your mind. You are busy in the trenches making new sales, winning over new clients.  These networks have been cobbled together, usually built by a self-taught network amateur that has turned pro. When something broke, they called the tech that built it, and the system was fixed… Hopefully. Upkeep was an afterthought and only performed after the fact.

As time goes on, almost every small business that uses a computer has an in-house employee become the in-house IT guy or gal. They usually the companies software powers users and can solve most of the company’s software issues, opening the door to a dual role at the business. This happens because, over time, the cost becomes unbearable to the business, and the employee above will allow the business to save money. Even if they can solve every problem, it still is cheaper than calling the “pro” to fix it every time.

Most of the time, the problems persist and become a thorn in the company. So the in-house employee starts to develop a checklist, checks the system logs for hints to what are triggering small problems before they become big, and shuts down the business or department for the day before the business knows that employee has moved out of a dual role and into a full-time IT “professional” company.

Backup problems or the lack of backups.

Every business has had that event of a system crash, and all of the information is lost, which triggers the need to start backing up everyone’s desktop computer and if your business has one server. The backups are set to be done at 1 am, and everything is solved. We have seen these countless times where a business owner has been lead into a false sense of security. How often do you check the integrity of your backups, perform a true test restore? By not being proactive, the business is in a constant battle with their IT systems and often the people that manage the systems. They know that they need to start to move in a positive direction but often lack the necessary information to move forward.

Managed IT for the fortune 500 companies

The first companies to benefit from having all of their computer systems outsourced were the big box stores. These large stores needed a point of sale machine to be managed, their security systems, CCTV systems, and backend server managed. When you take 10 to 15 locations in a small area like the state of Maine, for example, it is cheaper and more cost-effective to have outsourced to a team vs. each site having a dedicated IT professional.

Starting in the early 2000s, the expensive systems to buy and implement had started to come down in price and allow the small and medium businesses to benefit from the same technologies. This was what allowed IT companies started to work with smaller businesses and sparked the movement to managed systems in a proactive approach. Businesses of all sizes can make more informed decisions. Now you can plan for repairs and downtime instead of just reacting to your computer problems.

Managed IT Services for the Small Business Owners.

Today most small to medium businesses normally can’t afford an internal IT department and feel that enterprise solutions are out of their reach. When business partners with a professional IT company, they can access true enterprise solutions and achieve a proactive approach to your information technology.

When you work with a managed service provider, you will have a company that monitors and maintains your company’s network and computers. The result should be that all issues should be resolved within the time allotted by the MSP in the service level agreement. Every alert that the MSP gets from the automated monitoring system should be addressed by the MSP. Help should be just an email, ticket, or phone call away for anyone in the business. By contracting with a managed IT service provider, you will move away from everything issue being an emergency. In time your MSP will be calling you, letting you know that you have an issue. Allowing you to mitigate the issue and schedule downtime when convenient to your business.

What is all of the hype about Managed IT Services?

No matter the size of the business, they all have the same basic need for IT. Business needs are always evolving, needing to stay at the forefront of their field. Every business needs to concentrate on growing their business and not have to worry about the underlying technology that is supporting it. MSP’s offer unique services allowing them to be a full-service external IT department. Most MSPs have technicians and engineers that understand your needs from the conception, deployment, and management of any project.

IT departments are typically complex, distracting, and costly for any business they are supporting. By utilizing a managed service provider, you can stay agile and scalable to your needs allowing you to save money and offering peace of mind. You will no longer have to worry about backup, patches, and updates, and security issues will be a thing of the past.  Let’s take, for example, your business customer relationship management system or enterprise relationship management system, or your network crashed. You would most likely face substantial user productivity and revenue loss for the incident.

Managed IT Services vs. Traditional Break-fix Methodology.

When a business is moving away from the “break-fix” method, it experiences a paradigm shift. Before, a business would have to wait until an issue arises and then call an IT professional to come and fix the problem. This leaves the company vulnerable, not only from the disruption to the employees but the IT professional can really charge your business whatever he wants. When you’re working with a managed service provider that focuses on mitigating system downtime, issues typically are resolved before they disrupt your business and employees.

Let’s analyze the potential costs of the downtime of a server IT failure:
Productivity loss
P = (number of staff affected) x (% of productivity loss) x (average salary per hour) x (duration)
Revenue Loss
R = (number of staff affected) x (% of revenue loss) x (average profit per staff per hour) x (duration)
Overall Loss due to downtime
P+R= cost per outage

Why the break-fix method doesn’t work for most businesses today.

When business is driven by the “break-fix” methodology, it means that something has failed and already gone wrong before you have anyone on-site to fix the issue. Typically they will find more problems unrelated to the original service call costing you more money. Today no business risks being in a reactive state when it comes to any part of their business epically their information technology infrastructure.

When a business is using managed services or has an internal department for that fact, they have a competitive edge over those that don’t. They will employ technology that works and will be able to serve their customers better. You can afford the risk of being left behind by your competitors.

What costs more Managed IT or Traditional Break-fix Services?

It depends on the complexity of the environment and the needs of the business, but surprisingly managed services usually cost less than the traditional break-fix method. When you calculate the true cost of downtime and the number of employees affects by just a few issues a month.  That in itself can pay for a managed service provider to deploy remote support, monitoring, and mitigating major IT issues before they can occur. Thus the MSP will offer better and more service for the same price without charging more.

What are the real benefits of Managed Services?

The real benefit of partnering with a managed service provider is a well-maintained, proactively managed information technology network. When your servers, desktop computers, and network devices are monitored, patched, updated, and optimized regularly, you will notice a substantial difference in the day-to-day operation of your business. All MSPs should aim to eliminate downtime, commit to best practices, and provide a proactive approach to your business.

Eliminate Downtime
  • Allows the client to focus on their business and grow
  • Maximizes productivity
Commit to Best Practice
  • Improve, not just repair
  • Establish a consulting role in the relationships with the client
Proactive vs. Reactive
  • Fewer Issues
  • Detect and resolve problems before they cause any downtime

More Benefits of IT Managed Services.

  • Regular interval maintenance will prolong the usability and performance of computer systems.
  • Security software updates and frequent patches will protect almost all attacks from a variety of threats.
  • Remote technical support can reduce support reduces costs by aiding on-site personnel instead of always sending an IT professional in to resolve the problem.
  • Proactive monitoring can lead to the early detection of potential problems. This can single out issues that need resolution to mitigate downtime.
  • Develop detailed documentation and network maps that provide IT professionals an informative overview of a business’s IT requirements, special cases, and intricacies.
  • Documentation of support visits and visits also helps discover patterns and develop solutions to potential future issues.
  • Reporting and tracking technologies help segregate defective devices for repair or replacement.
  • Service methods are designed to provide high-quality customer service and develop customer relationships.

How are Managed Services Priced?

Most managed it to service providers charge a flat fixed monthly fee. This is based on the company’s needs, and no business will have the same rate. Your cost will be based on the number of devices you have, the time of resolution, and any additional needs you have, like ERP and DMS systems. Every MSP is different and will charge accordingly. Not every managed service provider is equal, so make sure you find one that can service your business.

Wait, another Monthly fee? That not exactly what I’m looking for!

We can understand and relate to your way of thinking. With all of the services that a business pays out on a monthly business, it seems like everyone is looking to charge you a monthly fee. Especially SaaS companies that offer services like customer relationship management, document management, social media management systems, etc. The managed service provider is no different from the rest, but managed services are not a fad, nor are it was way for IT companies to add more money to their bottom line. It is about your business IT-related issues; it is a way to stop major problems before they can affect your business’s day-to-day operations. When a computer or server goes down, you have an employee unable to do their job that can easily lead further down the chain to an unsatisfied customer. When you create a long-term partnership with a reputable managed service partner, they will assist your business with protecting one of your most critical assets, your information (data).

What kind of IT Services do you have?

While reading through the list below and answer to any of them then you are still driven by the break-fix methodology.

  1. Do you know which network gear might need to be replaced soon?
  2. Do you know if all of the servers and desktops have the latest anti-virus installed?
  3. Do you know which computers are utilizing all of the computing resources?
  4. Do you know of any underutilized computers?
  5. Do you know when the last time your network has had patches installed was?
  6. Do you know who utilizes the most bandwidth out of all of your employees?
  7. Do you have to contact more than one vendor when you have an IT issue?

 Why Choose Pegas

We would love to help your business become more productive and to solve all of your Information technology needs for your company. Give us a call at (207) 835-4053 to get started today.



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