Managed Services: Why Your Business Needs Them

Businesses operate and thrive based on their ability to use their limited resources effectively. For these companies, every decision made is crucial. Whether it's hiring a new employee, buying new equipment, or leasing a new office, daily strategic decisions can determine a company's fate.

However, a high percentage of the decisions businesses make are not tied to their core offering. A false belief is that managed services are strictly reserved for heavily technology-focused companies – that's not true. For example, a news agency may not be a purely technology company. Yet, whatever its size, it will rely on a varying degree of information technology to run smoothly.

The owner of this agency will quickly realize they have to choose between two options before it gets too complicated: hire an in-house IT team or work with a managed services provider.

A managed services provider, or MSP, is an independent company that takes over IT, providing powerful technology solutions for daily operations as well as long-term strategy. Managed services providers operate in countless fields, including information services, supply chain management, marketing, transportation, media, and more. They are a reliable way to ensure a business function runs properly.

About 69% of small businesses *( original article in English )* hire at least one type of managed IT services provider. In the early days, it's reasonable to keep much of the technical operations in-house, depending on cost and convenience. However, even with a bit of scale, your operations will quickly become a burden: investing in an MSP pays off almost immediately.

Cost reduction

For many small business owners, expertise is the most important factor in working with a managed services provider. In almost every case, entrusting your IT operations to a managed services provider will give you far more for your money than recruiting specialized in-house staff.

By hiring an MSP, small businesses save on startup costs, benefit from economies of scale, avoid additional hiring and training, and more. According to an IDC study *( original article in English )*, managed services providers reduce IT infrastructure costs by 24% and generated a three-year return on investment of 224%. This is largely due to the pooling of resources across the companies that hire the same MSP. By using shared resources with structured monthly costs, providers are able to negotiate favorable rates for servers, web hosting, and security software.

Structured contracts are the other cost-related advantage of managed services providers. In a break-fix model, you don't know how much you'll spend until you receive a quote after a problem has been diagnosed. This could lead to unexpected expenses at the worst times of the year. With an MSP, whether it's a monthly or multi-year contract, a small business owner can budget exactly how much is spent per month.

Specialization

A small business generally can't afford to hire as many employees as there are specializations in IT. The result is that each employee is forced to be a jack-of-all-trades, with more responsibilities than they can handle, leading to sloppy work. Very few people can simultaneously manage security, compliance, servers, application development, and networks.

By hiring an MSP, a company gains access to a large group of employees who are experts in each of these areas. So if there's an availability problem with the company's website during peak hours, an employee specializing in server load balancing will examine, diagnose, and fix the problem very quickly.

Time savings

The managed services model contrasts with the traditional break-fix model, in which small businesses contact their provider when there's a problem. The emergency break-fix model, by its very definition, leads to unavoidable downtime. The business owner waits until production has stopped, then has to get in touch with a repair company, explain the problem, and finally get it fixed. With a permanent presence from a managed services provider, business owners have the peace of mind of knowing their problem will be resolved immediately, often even before the issue arises.

As email communication and cloud technologies have grown, companies are increasingly turning to managed services providers. In fact, more than 59% of businesses *( original article in English )* that use IT services have switched from the break-fix model to the managed services model. Thanks to the additional savings, business owners can improve their core products instead of playing cat and mouse with their service providers.

Boosting productivity

While many companies that work with MSPs still keep their IT team, hiring an MSP considerably lightens their load. By removing much of the background stress, the in-house IT department can focus on creating detailed experiences centered on the company's core activities.

To return to the news agency example, an in-house team can manage the sales and CRM management software, while the managed services provider can focus on preventing downtime, infrastructure, and related tasks. What's more, without having to handle the costs of managing a technical team, the agency owner can focus on sales and deliver an outstanding customer experience.

Keeping pace

A common side effect, frequently overlooked by business owners, is that managed services providers allow companies to stay up to date. In a traditional in-house hiring model, companies often get stuck with the same technologies and the same security frameworks, which leaves them lagging behind their competitors.

Indeed, security is one of the main reasons a growing company should invest in an MSP. MSPs have to stay on top of the latest cybersecurity trends to stay in business. You can easily imagine that training an in-house employee in cybersecurity every day becomes harder when there are operations and projects going on at the same time. These days, it's essential for security to be a priority to avoid data leaks or production stoppages.

MSPs regularly train their employees, attend conferences, and innovate in their specific area of expertise. In IT, a small business can adopt emerging technologies such as artificial intelligence, the Internet of Things (IoT), blockchain, virtual reality, and much more simply by talking with their provider. They also have access to the latest security patches, which can be deployed in a small business infrastructure without excessive involvement from an employee.

Beyond technology choices, staying up to date helps sustain a small business's growth. A managed services provider works with companies of all sizes and has the expertise needed to help the company with the technological challenges ahead. They can show how to prepare for new security threats, expand internationally without compromising the customer experience, and get the most out of the IT budget.

In conclusion…

If you're a growing company, an MSP is almost never a bad investment – and at the very least, it's an insurance policy that is absolutely essential in the digital age.