About 34% of companies outsource some part of their IT operations, which is up from 30% the previous year.
You know that you need help with your networks, and managed IT services can fill the void. Your next step is to create a budget to outsource your IT work to another provider.
It’s not easy to do because managed IT services pricing seems to be all over the place. Read on to learn more about managed IT services, how they’re priced, and how you can create your budget.
What Are Managed IT Services?
Managed IT services is a broad field where you outsource all or part of your IT needs. For many businesses, they have IT staff, but they’re overworked.
They can be working on projects that further the company, but instead, they’re constantly putting out fires and can’t find a way to move forward.
That can limit the growth of your company because it prevents the innovation that your IT team needs to provide.
Managed IT services step in to support your IT team. They can do anything from providing technical support to your staff, fix minor issues, and provide maintenance and updates to your systems.
Managed IT Services Pricing Structures
Since IT managed service providers provide so many different services, that can make pricing a bit of a challenge. These are the various pricing structures that service providers use.
Monthly Retainer
This pricing structure is used a lot in the legal industry where you hire an attorney for a set amount of hours each month. In the IT world, this is called block time, because you’re buying a block of hours.
The advantage here is that the services provider can provide support for just about anything. It’s easier to budget because it’s more predictable. You’re also buying your hours at a lower cost.
Let’s say IT managed services cost $200 an hour. A block of 10 hours would cost $2000 at the full rate. A block rate of 10% off, could cost $1800.
What happens if you go over or under your hours? What typically happens is that any hours over the allotted time will be charged at the full hourly rate. Some providers will let you roll over a certain number of hours each month.
Per-Project Fixed Rate
At the opposite end of the spectrum is the per-project fixed rate. This is great for a specific project, such as cloud migration. This structure has a definite beginning and end.
The contract should specify what services are provided and how much the services will cost.
Per-User or Per Device Pricing
Managed IT services are often priced by the size of your company. IT providers will price according to the numbers of users or devices.
Bear in mind that these prices can vary because the average employee uses 2.3 devices in the workplace. Most providers will charge anywhere from $100-$200 per-user or device.
Full Management of IT Services
In a fully managed IT services situation, you have a firm handle all of your IT needs. They take over maintenance, technical support, and security. They’ll set up emails, phone systems, and make sure your business has a disaster recovery plan.
This is usually a fixed rate based on the number of users or devices. The good thing about the fixed rate is that it’s easy to budget.
Partial IT Management
What if you don’t need all of your IT services outsourced? Partial IT management is a great solution. You can hire a company to provide technical support, regular server maintenance, or cloud services.
These services will be priced on a per-user or per device for a fixed cost. If you need more than one service or your needs fluctuate from month to month, you’re better off using a retainer model.
Set Your Budget
With all of this in mind, how can you set a monthly budget for IT services? It starts by understanding your needs. Go through your networks and interview your IT team to see what your needs are.
Some providers will do a complete IT audit of your network systems and develop a plan for you. Once you know what services you need the most, you can develop a budget accordingly.
The ROI of Outsourcing IT Needs
Is hiring an IT management company worth it? The reason why more companies are outsourcing IT is that they are seeing tangible benefits. Take a look at these benefits and calculate your potential ROI.
Hiring, Training, Retaining IT Staff
IT employees are among the most expensive to hire, with salaries ranging between $41,000 – $131,000. You have to invest the time to read resumes and interview potential employees.
Once they’re hired, you need to retain them. IT workers are in demand, and you need to do a lot to keep them. That can increase their overall cost.
Using a managed IT services firm can reduce or eliminate these costs.
Investing in IT Infrastructure
Technology has one predictable rule – if something can break, it will break. Right now, it may seem like you always have to buy a new server.
Some providers will provide the network infrastructure or move your network to the cloud. That can reduce your infrastructure costs.
Make a Smart IT Investment
Your business relies on IT in order to function. It’s important to recognize that your IT costs can be controlled by hiring a managed IT services firm.
Managed IT services pricing can be very predictable once you know your needs. It’s a smart investment that will save your business money over the long run.
Be sure to check out the Business and Technology sections of our site to get more ideas to grow your business.
