As a manufacturer, you know you need to budget for IT.
Look around your plant and take a mental inventory of all the technology you rely on to make your production possible.
You need someone to be responsible for keeping the IT components of your business running smoothly.
Managed IT services are a great option for manufacturers because there is always an engineer available who more than likely has experience with this industry.
Another beneficial aspect of managed services is how managed service providers (MSPs) charge.
Your monthly rate is based on how many users you have. As a manufacturer, you’ll pay the full rate for employees who use a computer full time and a discounted rate for employees who only occasionally use a computer.
(Don’t worry; we’ll talk about this in more detail later.)
When thinking about how much a managed services contract will cost your manufacturing business, there are four areas to consider:
- Monthly subscription
How these components apply to you will determine what the price of a managed services contract looks like for your manufacturing business.
Before your MSP draws up a contract, it’ll need to review your IT infrastructure in an audit.
The MSP engineer is looking at what hardware and software you’re currently using and what solutions you may need.
This audit can take place remotely or on-site. Either way, your MSP will be able to estimate your montly price and tell you if you need to purchaseany additional hardware before starting services.
Some MSPs, including The KR Group, will also include a mini security check during the audit to ensure they’re taking control of a threat-free environment.
In effect, this is the first chance for your MSP to begin to acquaint themselves with your environment.
The audit generally costs $500 per site.
This component of your IT infrastructure acts as the first layer of defense against attacks. A firewall prevents unauthorized and/or malicious traffic from entering your network.
By monitoring incoming and outgoing traffic, the firewall can block or allow requests based on rules you and your MSP designate.
As a manufacturer, a firewall will prevent attackers from gaining access to your network and finding patented designs or other confidential information.
Most MSPs require their customers to use a specific firewall. (The KR Group requires Meraki firewalls.) This helps your MSP create efficiencies for you and your service provider.
As a manufacturer, you can expect to spend between $750 and $2,000 per site. The exact cost of your firewall will depend on the size and demand of your specific business.
Your monthly rate covers your cost for antivirus, anti-spam, a DNS filter, and, of course, support.
All of these components are important for securing your network, and this is also the price point that benefits manufacturers the most.
As a manufacturer your subscription fees will be broken into two options:
A. Full-time users
This option is for those employees who spend most of their time logged onto a computer. Your designers and executives will likely fall under this category.
The price for these subscriptions is between $85 and $100 per user, depending on the size of your environment.
B. Other users
You also need subscriptions for users who don’t rely on using workstations for the majority of their job.
This includes technicians and other employees on the shop floor who only occasionally use a desktop or laptop.
The cost range for these users is between $75 and $100, depending on your environment.
While this cost is generally encompassed in the monthly subscription fee. We think it is important enough to mention on its own.
At The KR Group, we require all of our managed services customers to have a back-up subscription. (It’s also something we stress the importance of to all of our technology customers.)
Generally, managed services customers choose an on-premises and cloud-hosted back-up solution, which stores a copy of your data off-site.
However, if you already have a back-up device or solution, you can talk to your MSP about incorporating it into your services.
Calculating the cost of a managed services contract
All of these components are great to help you understand what goes into calculating your managed service rate.
But you want to know how much managed services will cost you.
The initial cost before monthly services is fairly straightforward.
Initial cost = Number of sites x (audit + firewall)
In general, an audit will cost $500 while a firewall ranges between $500 and $2,000.
The monthly rate is a bit more complicated, but it is still possible to get a rough estimate by following an equation.
Monthly rate = (full-time user x $100) + (other users x $75)
Note, however, that depending on the size of your business, the precise user rate may vary. The way the subscriptions scale means a larger business may pay less than $100 per full-time user or more than $75 for other users.
Cost Comparison: Managed IT Services vs In-House IT Staff
Talking about cost wouldn’t be complete without comparing it to your other IT options.
Unless you’re a large, enterprise manufacturer, you’re likely looking for a small IT department.
Even hiring just one engineer who is qualified to resolve all the problems you may experience will likely cost you roughly between $75,000 and $149,000. This doesn’t account for benefits, either.
With managed services, a manufacturer of a company with 90 users operating at one site will pay around $94,000 for one year of managed IT services.
Not only is the cost of managed IT services more budget-friendly, but you also don’t have to worry about recruitment, training, or time off.
Why should you consider managed services as a manufacturer?
If you’re a manufacturer considering managed IT services, knowing how much a contract may cost you is important
The good news is the cost can be estimated by calculating your business’s audit, firewall, and subscription costs.
Most manufacturers will find this equation amounts to less than the alternative of hiring a highly-qualified, in-house engineer or multiple IT staff.
For more information about managed IT services, check out our learning center, or for more personalized information, schedule a time to talk with one of our sales representatives.