IT outsourcing is on the rise as businesses are starting to streamline operations, lower costs, and reduce complexity. Spending for IT outsourcing hit a five-year high in 2019, and, with only 13 percent of total technology, the budgets have earmarked for third-party services. Today, 34 percent of companies are outsourcing at least some of their network operations, and almost half of them have plans to spend more on outsourcing security.
However, increasing market maturity and service availability bring a new challenge: finding the ideal outsourced option. There are clear-cut advantages to the shift away from break-fix IT, and businesses are already better served to tackle the scope of IT issues with staffing augmentation. They target the scale of solution complexity with managed IT services or by adopting a mixture of them both.
What Are Managed IT Services?
The simplest solution for managed IT packaging and delivering a third-party relationship is when a company outsources services to another provider. These services aren’t fixed in stone because some companies prefer to outsource IT service requests, while others might want help in managing their transition to the cloud.
This is an extremely ‘mature’ market, where there are a lot of entrants, and several companies are offering both broad and boutique services. It’s predicted that there is going to be a significant uptick in managed service spending, and recent research offers a similar perspective, which suggests a tremendous growth over the next five years.
Why Are Managed IT Services Required?
There are two reasons for managed IT service adoption, which includes peace of mind and cost savings. Most CIOs want to ensure they can sleep at night, which gets increasingly difficult thanks mainly to cyberattacks, data breaches, and tech outages. Over 56% of CIOs and CTOs have now reported stress-related illnesses that are tied to ongoing IT issues.
There is also a growing ‘war for talent’ as the IT skills gap continues to widen, and most organizations find themselves understaffed and under-skilled. Even as technology offerings diversify, it leads to a rapidly evolving technology like cloud computing or Big Data analytics.
Most businesses, especially small and mid-sized organizations, don’t have the budget or the time for in-depth training. They’re often aware they need to adopt new IT services to stay competitive but aren’t sure of the best approach, and managed IT services can help bridge that gap.
What Are the Benefits of Managed IT Services?
Deploying managed IT services provides multiple business benefits, which includes:
· Streamlined Response:
Service-level agreements for managed services include specific response time guidelines and ticket escalation expectations, which offer a clear path from issue identification to resolution.
· Enhanced Scalability:
The as-a-service nature of managed IT services makes it possible to scale up or down as business requirements evolve.
· Reduced Complexity:
Issues such as new service implementation and software integrations are handled by providers, who remove a critical layer of IT complexity.
· Increased Staff Availability:
Local staff can easily tackle critical in-house issues while managed IT providers handle regular maintenance, performance monitoring, and upgrading.
· Improved Cost Management:
Fixed monthly costs help CIOs in managing budgetary allocations and clearly articulating spending needs to C-suite executives.
Managed IT Services vs. Break-Fix IT
Break-Fix IT response is familiar but not always effective and requires waiting for services and technology to fail before creating tickets and deploying IT resources. This ensures the specific problem resolution but also costs time and money. Software and infrastructure left unmonitored until its next breakdown doesn’t just carry the potential costs of failure, and companies must also deal with concerns regarding data breaches, compliance obligations, and regular system updating.
The problem management framework offered by break-fix IT is table stakes for managed IT services, and these managed services include problem response and remediation. They also involve proactive systems monitoring to solve potential problems before critical services start to suffer.
Managed IT services provide support for technology breakdowns puts the emphasis where it belongs, i.e., on the solution.
Staff Augmentation vs. Managed IT Services
Another option for businesses looking to enhance service delivery with limited time, budget, and talent is staff augmentation. Outsourcing staff rather than specific services provide a more generalized approach where businesses can leverage skilled professionals to tackle top-priority tasks without overtaxing internal staff.
There are clear benefits to both managed IT service and staff augmentation, and they don’t exist in isolation, for example, the use of managed services contract on top of a cloud deployment, combined with a professional services agreement. It has been noted that it’s critical to define a ‘line of demarcation’ between outsourced services and staff. When leveraged in concert, both can help address mission-critical efforts more effectively.
The Cost-Benefit Analysis of Managed IT
Cost is a significant factor in managed IT service adoption, and if there’s any level of IT maturity internally, managed services are going to prove to be more cost-effective. Realizing these budget benefits demands detailed through contracts ensures that the more work there is, the better it is going to be for all businesses.
You don’t need to hurry because these service contracts are like prenuptial agreements that must define the rights and responsibilities of both parties. They must also articulate what happens if there are problems, and it always ensures that it contains a way out that won’t break the bank.
When there is a failure to meet SLA requirements, it often forms the basis of no-penalty termination, because it advocates for ‘clauses of convenience’ that permit an easy exit if things aren’t working out.
Ensuring ROI on Managed IT Services
Ensuring a return on investment that lives up to expectations means ensuring that providers are delivering on SLA requirements for operational uptime, ongoing upgrades, application support, and timely ticket response.
However, it’s important to have room for growth because the first few months of service delivery will offer peace of mind for CIOs. Innovation is now the IT service mandate because simply keeping pace isn’t enough to stay competitive.
It’s recommended to create a contract that leaves room for growth rather than locking businesses into the same service pattern for months or years without the ability to evolve. In the same manner, these in-house IT solutions must adapt to changing end-user expectations, managed IT services must offer continuous improvements to deliver on ROI.
by Bobby J Davidson
We love our company and we love what we do. Check out the ‘Why Percento‘ page to learn more: Love of Technology and Business! As the President of Percento Technologies International, I provide day-to-day leadership to the company’s senior management and I am personally involved in the strategy, business development and sales activities of the firm.
The company was founded in 1999 with the purpose of providing a one call source for organizations in need of Enterprise IT Consulting and Management. We also provide a line of products in the boutique Cloud Server space with a touch of high-end website strategy consulting and design services. We personalizes the IT Service experience with a team approach, working with clients from diverse sectors of industry, including energy services, financial, legal, entertainment, healthcare, hospitality, retail and general and/or corporate business. percentotech.com/contact