Managed IT Services - What are they?
The buzzword relating to IT Support is "Managed Services", and every day more and more businesses are jumping on the bandwagon. But what does managed services mean and how can you tell if an IT Support company is not just using the word as a marketing tool, but is only offering "flat rate" services packaged as "managed services"?
As a definition, Managed Services allows a business to offload IT operations to a service provider, known as a Managed Services Provider. The managed service provider assumes an ongoing responsibility for 24-hour monitoring, managing or problem resolution for the IT systems within a business.
Managed services have become a popular buzzword in business environments. However, with the myriad new features and benefits, it offers over traditional break-fix repair, many are still unclear about what managed services encompasses. In its most simple definition, managed services give a 3rd party service provider complete responsibility for any aspect of your company, and is often related to IT support.
In this technology-focused age, businesses can live or die by the quality of their IT infrastructure. Entire companies are run electronically nowadays, and there are few that wouldn't suffer immense losses if their IT network encountered a major issue. With managed services in IT, business owners no longer have to worry about data loss or computer problems; these are handled by experts and relieve owners to worry about what matters to them - running the business.
Read on to receive answers to all your questions about managed IT support, and learn why this new method is quickly taking over from the break-fix model of old.
A Brief History of Managed Services
The following is a summarized history of managed services to give you some background relating to how these services have developed. This history pertains specifically to companies who service small network systems.
It all started with break-fix services
The companies who have helped service small networks in the past have been hamstrung by the lack of tools to help with the problem. The networks they service developed as simple systems, usually built by a self-taught network amateur-turned-pro. maintenance was break-fix only, meaning when something broke, the company called, and they came running to fix it hopefully.
As time went on, the best of the support people developed procedures and programs to periodically come onsite to do a system review of logs and user information looking for hints of issues before they become big problems. In some cases, an elaborate checklist was used to record disk usage, processor usage, etc.
The problem, of course, was that the support people could only see what was happening on that particular day. If something happened later, they would never know about it unless the customer called.
Backup problems and other errors continued to occur
Additionally, the only professional test of the backup system was on the visit, which frequently resulted in days or more of missed backups. The system was prone to other human errors when the onsite technician, trying to be accommodating, would take care of the "end-user" symptoms and would not have time to address the "real issues". This created a constant battle for the tech as they tried to convince customers that they were only causing themselves more dangerous problems down the road by not being proactive.
Managed Services began with Fortune 500 companies and their huge networks.
At the same time, the hardware and software vendors were adding new and better ways for the systems to signal problems as early as possible. Simple Network Management Protocol had been developing since the early '90s and was being applied to PCs. The first systems that could watch these tools and turn all the data into usable information were complex to manage, were geared only to large networks, and were prohibitively expensive for small business.
In 2005, systems started to mature that allowed smaller companies to take advantage of the same features and benefits as the large companies. This technology started the Managed Services movement.
Whether you're a business executive or a seasoned IT pro, using managed services can make your job easier. When effectively executed, a Managed Service (MS) is like gaining the capability of an IT Department with the expertise of seasoned professionals to deliver focused application operations to your company's business application users. Simply put, an MS is designed to handle the daily operations of your specialized applications providing the capability to your company end-users and therefore allowing in-house IT to focus on more strategic IT programs, also freeing your team to focus on your business' core competencies.
This shows up often when IT professionals notice a decline in the current repository of knowledge, reducing the quality of IT service to your company. Other symptoms of a need for an MS include the following:
- "We didn't achieve everything we wanted last year due to a lack of Service and Support."
- "We had too many service outages and downtime."
- "We overspent our budget on tweaks to our business applications that eroded its performance."
- "We lost data due to a lack of ability with the solution."
From my experience working with small and large client companies alike, I often suggest how a managed service can help address these challenges. In my career, I have worked with many clients that are utilizing managed services in a variety of ways. Most recently, I provided a managed service to a large energy company which found the service to be seamless and significantly improved the satisfaction of end-users and IT, support staff, globally.
If you're sensing some of these dynamics at your company, here are some personnel and technology suggestions on how you can reorganize and empower your IT Department for growth via MS.
Assessing the Need
Today, IT managers are under significant pressure to meet the performance, operational expectations, and security needs of the business while trying to keep costs down. Most of the financial experts would suggest in these conditions to switch to a predictable cost model, like that of a managed service. A company that provides such services is called a Managed Service Provider (MSP). The best time to consider speaking with an MSP is when you are setting future strategic goals or deploying new services to your IT environment. Many times, a company's existing staff may not be experienced with a new technology or able to maintain new services or applications. Hiring contractors to provide the service may be more expensive and provide less value in supporting your company's ever-growing performance goals, given astatic or declining budget. This is often true for small, medium and large companies alike.
Managed Service models have evolved, and seasoned providers have perfected their delivery.
It is very effective for a business that:
- Relies on their IT Infrastructure to properly support their daily business processes
- Do not have sufficiently trained staff or time to formally deal with proper maintenance, updates and repairs
- Want to pay one monthly, flat fee for services to provide a high level of service quality to the business
For most business services, IT underpins the business engine. From software to hardware and the skills required to keep the service running, a company could invest significant capital in building and maintaining the in-house support staff. However, given the maturity of the managed service models and the shift to virtualization and cloud, the need for onsite IT staff can be limited to the exceptions where operational sensitivity justifies it. To ensure greater IT cost predictability amid uncertain requirements, and a company may consider leveraging managed service experts.
MSPs usually price their services on a subscription basis. Based on the services selected, the pricing is usually scoped on the number of devices with pricing aligned to packages across a range of categories. Some provide customer support onsite when required. Basic services often start with a monitoring service, which identifies potential issues, which you resolve on your own. At the other end of the spectrum, service providers offer comprehensive managed services that cover everything from alerts through problem resolution.
Managed Services vs. The Break-Fix Mentality
Managed services are also a philosophical change in the way that a business deals with its technology. Instead of following the old-school tradition of break-fix (literally meaning wait until the server, desktops or other critical networking devices fail, then scramble to fix them), a business operating with a managed service focuses on the prevention of these issues before they disrupt employees, management and/or clients.
If you fall behind in keeping up with things such as backups, patches and security, the odds greatly increase that you'll face an IT outage or another problem down the road that will negatively impact your business. For instance, if your Email server, customer relationship management system, financial application or network goes down, you will likely face substantial productivity and revenue losses as a result.
Why Break-fix is no longer good enough for your business
A Break-fix maintenance service fixes problems as they crop up. This means that something needs to go wrong before you receive any service, resulting in an inevitable reduction in IT system performance while you wait for the problem to be fixed.
Today, no business can afford the risk and uncertainty of relying on a "Break-fix maintenance service" because your business is too dependent on having a reliable IT system. Furthermore, having separate suppliers responsible for different parts of the system puts you in the difficult position of trying to decide who should be delivering the service you require. You do not have time for this.
Do Managed Services Cost More Than Traditional Break-Fix Services?
Actually no! Surprisingly most managed services cost less than traditional break-fix services, especially when including the true cost of downtime. Remote monitoring, remote maintenance and the prevention of major issues allow a managed services provider to be more efficient than a similar break-fix company who is constantly rolling a truck to visit customer sites. Therefore the managed service company can offer a "better" service without charging more.
Why are so many IT Firms now promoting Managed Services?
Because it puts the IT Support Company on the same page as the business, they are serving. With traditional break-fix services, the only way for an IT Support company to make money is if something goes wrong — which to us as always was a double-edged sword. If we do our job too well, we're out of business, which happens to about 80% of all small IT Firms — they don't make it.
How are Managed Services priced?
Managed services providers usually price their services on a flat-rate monthly basis. Depending on the services included in the program offered, pricing is usually based on the number of devices, with different packages priced at different levels. Some providers offer onsite customer support as an extra fee.
Basic services often start with a monitoring service, which notifies the" you" of problems, which you resolve on your own. At the upper end of the spectrum, service providers offer fully managed services that cover everything from alerts through problem resolution. (Learn more about Managed Services Costs)
Why managed services?
Large and small companies alike need technology to operate effectively, and as reliance on IT grows every year, the means to support it must evolve as well. Unfortunately, as these systems grow and evolve, many businesses (especially small ones with limited funds) may not have the resources to manage their ever-growing networks effectively. Small IT teams can quickly become overwhelmed with the amount of work necessary to keep everything up-to-date and running smoothly.
It is so easy to fall behind with important things such as backups, patches, updates, and security, and this greatly increases the odds that you'll face an IT outage or other huge issue that will negatively affect your business.
Imagine if your entire email server, customer relationship management system, financial setup, or network went down; you would likely face substantial productivity and revenue losses as a result. Employees are unable to do their jobs, and everyone involved scrambles to fix these major issues as quickly as possible to return to normal business procedures. This is a huge detriment to any company, and these situations are easily prevented using managed services.
Managed services also create a change in the overall philosophy of the way a business deals with its technology. Break-fix repair relies on waiting until servers, desktops, or other critical devices fail, then rushing to fix them as the company bleeds profit. A business operating under managed services, however, focuses on prevention rather than reaction, monitoring and resolving issues before they disrupt employees, management, and clients.
In today's highly competitive and fast-paced business environment, no company can afford the risk and uncertainty that comes with relying on break-fix maintenance. Businesses are extremely dependent on having a reliable IT system. Furthermore, having multiple vendors responsible for different parts of your system puts you in the difficult position of having to decide who should be contacted when service is required; business owners do not have time for this!
With traditional break-fix repair, the only way for an IT support company to make money is if something goes wrong, which is a double-edged sword. If they do the job too well, they will go out of business, which happens to about 80% of all small IT firms - they don't make it. So many IT companies are promoting managed services because it puts them on the same page as your business, essentially partnering with you to become your complete IT department. The service provider becomes invested in your continued success, becoming a win-win situation for both parties.
Managed Services Pricing
Surprisingly, managed IT services cost less than break-fix repair, especially when factoring in the cost of downtime that inevitably comes with this old method. Remote monitoring, remote maintenance, and the prevention of major issues allow a managed service provider to operate far more efficiently than a break-fix company that is constantly driving back and forth to customer sites.
Likewise, rush fees and after-hours or weekend support to handle emergencies can add up quickly. The managed service company can prevent these issues before they happen and handle most maintenance and service remotely. The MSP can, therefore offer a "better" service without charging more. Additionally, the monthly cost of managed services can be factored in as a business/operating expense, allowing most companies to deduct the service from their taxes to save even more money - something not available with the old break-fix model.
Managed services are generally priced on a flat-rate monthly basis. Depending on the services included, pricing is usually based on the number of devices with different packages priced at different levels. This makes it easy for a business to get the exact service they need, without paying for more than is necessary. Features like onsite support and device leasing can even be added if needed to offer a comprehensive support package. Here at Forum Group, we perform a free business consultation to determine needs and create a unique, personalized package to fit our clients.
The Real Benefits Of Managed Services
Put in simple terms - one of the biggest benefits of Managed Services is discovering and fixing problems before they can negatively affect your business.
A well maintained, proactively serviced computer network will always run better than the alternative. With proactive network monitoring, patch management, and desktop optimization performed regularly, you will notice a tremendous difference in operations, and you will reap the benefits of preventing fires, rather than fighting them.
- Reduced costs: Businesses are also able to control and reduce their overall operating costs with the flat-fee billing model. Cost-effective access to enterprise-level support is a reality.
- 24-hour monitoring: Because the Managed Services provider also manages all of your vendor relationships, issues with internet slowness/outages, printers, phones, cell phones, websites are dealt with directly with the vendor by the Managed Service provider. As a result of this "always-eyes-on" network monitoring 24 hours per day, businesses experience an additional level of comfort and security.
With so many versatile options and the business world's ever-increasing dependency on technology, it is no wonder the Managed Services market is growing so fast. According to a recent report by Markets to Markets, the Managed Services Industry is set to grow over 100 billion dollars in the next five years, and a similar study by CompTIA found that nearly two-thirds of organizations are using Managed Services for at least one IT function.
Managed Services is making a big splash in the IT world, and for a good reason. Not only do MSPs provide a wide range of features, but they also out benefit the older IT outsourcing models, and perfectly compliment In-House IT staff. Does that mean they are right for your business, though?
As long as there are a buyer and seller, there will be confrontation and the epic push\pull of negotiation. When it comes to MSPs, though, we can all stand to clarify and communicate more and push the transactional negotiations to the surface right away for everyone's mutual benefit.