Managed IT services make sense, but your business isn’t there yet.
What can you do to stop feeling so overwhelmed by technology while not overtaxing your budget?
At The KR Group, we’ve worked with businesses of various sizes and budgets, and our goal is always to find solutions that fit your needs without blowing past your price limits. But, we also want to help you understand that when you invest in technology, it can make your business more profitable.
So when we’re asked about alternatives to managed IT services because you don’t think you can afford it, the conversation isn’t as simple as giving you a few other options.
Evaluating Your IT Budget
Before we dive into your other options, take the time to better understand your expectations, options, and pricing.
Here are some questions to consider as you evaluate if managed IT services are out of your budget:
- What have I been spending on IT?
- How much should I spend on technology?
- What goes into managed IT services prices?
Our goal here isn’t to persuade you that you should sign a managed IT services contract if it is out of your budget. However, we want you to look at all of the pieces to ultimately make a well-informed decision about what is right for your organization.
Historical Spend on IT
When thinking about future costs of IT, you’ll find it helpful to evaluate what you’ve spent in the past.
This includes the more obvious expenses, such as software, hardware, and any external support.
But, you should also consider other less tangible items. For example, how much time are you spending managing IT instead of your primary duties? What’s the cost associated with that?
Unless you have cybersecurity experience, there’s also the risk that you accidentally leave a gap or miss a patch and create a vulnerability. A cybersecurity breach can be detrimental to your business; 60% of small businesses close after six months of a cyber attack.
Appropriate IT Spend
As a business owner, we know you are budget conscious, which means you limit how much you can spend on IT.
Your hesitation toward managed IT services is likely because of how it compares to what you’ve historically spent.
Remember that technology is an investment. When you have the appropriate systems and solutions, it can help your business make money.
As a guideline, the average small businesses (less than $50 million in revenue) spends 6.9% of its revenue on IT, while the typical mid-sized company (between $50 million – $2 billion in revenue) spends 4.1%.
Managed IT Services Pricing
This conversation wouldn’t be complete without taking the time to explain what goes into the pricing of managed IT services.
Your monthly fee covers your MSP’s software suite – antivirus, anti-spam, DNS filtration, etc. Additionally, it pays for your IT environment’s remote monitoring and on-site support as often as you require it.
Behind the scenes, your MSP employs multiple engineers to ensure you will get support promptly and have someone who knows how to resolve your issue.
This comes at a price, which is calculated per user based on the size of your organization. (We break down these costs in the article, “How Much Do Managed IT Services Cost?”)
What Other Options Are Out There?
There are countless benefits to managed IT services contracts, such as redundancy and expertise. However, if you’ve evaluated your IT budget using the above points and still don’t think it’s for you right now, you need to know your alternatives.
Of course, we hope you’ll eventually become a managed IT services customer, but if you’re not quite there yet, here are some options:
- Do nothing
- Break-fix support
- Block-time agreement
You may notice that an internal IT manager or department is missing from this list. You can read the complete comparison in “Managed IT Services vs. In-house IT vs. Co-managed Services.”
Of course, this is still an option you have, but generally, if managed IT services aren’t within your budget, an internal team won’t be either. So, we’ve decided to only explore the above options in this article.
For example, how much of your IT environment runs inefficiently, causing you and your employees to spend longer on tasks than necessary. Without the time or experience to optimize your IT environment, you could be losing money without even realizing it.
And sure, you’re not paying someone else to handle your IT; however, if you’re managing the technology, you’re spending time on something that isn’t your primary responsibility and takes you away from making the company money.
To sum it up, compared to managed IT services, doing nothing may seem like the least expensive option, but you’re losing that money elsewhere.
Another option you have is to outsource for support when something does break.
In most cases, businesses retain control of the “easy” problems and use break-fix support for the more significant issues. You could choose to call your IT consulting company to address every dilemma, but this will quickly become expensive.
In fact, break-fix support is considered the most expensive alternative and only slightly more efficient than doing nothing.
Yes, you’ll have experts resolving your IT problems, but each time you request support, you’ll pay for time and material.
And while you’ll have a trusted IT company to help you respond to emergencies, you’re not preventing them from happening in the first place.
Generally speaking, break-fix support is the most expensive and least efficient alternative to managed IT services.
Block Time Agreement
This arrangement is a middle ground between managed IT services and break-fix support.
You’ll sign an agreement with the IT consulting company for a set amount of hours of support. Since you’re paying for a block of time at once, the hourly cost is less than break-fix services. (Although, it’s generally still more per hour compared to a managed IT services contract.)
This can be a suitable option for companies who believe they don’t have enough IT issues to warrant a managed IT services contract and don’t want to pay the total hourly rate of break-fix support.
Many businesses find this option appealing, but keep in mind that a block-time agreement doesn’t include the same solution package as managed IT services.
What IT Support Option Is Right For You?
Thinking about how you want to support your organization is a multifaceted decision.
Of course, you want to build the best business possible, but you need to stick to a budget and don’t have unlimited money to spend on technology.
So as you’re thinking about the best way to meet your IT needs while sticking to a budget, you’ll want to think about what you’ve traditionally spent on IT, how much you should be spending, and what managed IT services pricing looks like.
Suppose you come to the conclusion that managed IT services are outside of your current budget constraint. In that case, you’ll need to consider alternative options, such as sticking with your existing arrangement, calling for as-needed break-fix support, or signing a block-time agreement.
However, you should know that none of those options is necessarily more cost-effective than managed IT services.
If you still have questions about finding IT support, check our “Complete Guide for Signing A Managed IT Services Contract” for more information.
This guide goes over all the intricacies of signing a contract with an MSP, including different contract options for you to consider.