5 Hidden Fees in a Managed IT Services Contract

managed IT service hidden fees

Most of us have had the frustrating experience of opening a bill and reading through the charges to realize there were fees added we weren’t aware of before agreeing to pay for the product or service.

Experiences like these make you and I wary of signing up for future services, and it’s why one of the first questions you ask before signing any contract is about cost – total cost.

As a technology services provider, The KR Group receives all sorts of questions about the price of our products and services.

When it comes to our managed IT services, we not only want to provide you with the information regarding estimated pricing but also help you avoid the feeling of being “nickel and dimed” with hidden fees.

Here are a few of the most common ways hidden fees could show up in your managed services contract:

  1. An audit of your IT environment
  2. Network hardware
  3. User additions or subtractions
  4. Additional devices
  5. Extended-hours support
  6. On-site support with a remote-only contract

By reviewing these potential additional charges, you should develop a better idea of what areas of your contract to examine closely and request clarification on because your managed services contract should simplify IT, not give you more complications.

Looking for more information on what to look for in your managed services contract? Check out our free guide!

 

Audit of Your IT Environment

Every managed IT services contract starts with an audit. This is required for your provider to get an idea of what your IT environment looks like and what you’ll need.

During an audit, a managed IT services provider (MSP) engineer looks for things such as what technology you have in place and if it’s compatible with their services.

They also determine what technology – hardware and software – you may need to implement or replace.

Your MSP may incorporate this expense into your monthly invoices or bill as a one-time fee.

 

Network Hardware

MSPs standardize their hardware and software across their customers. This allows engineers to work efficiently since they’re troubleshooting the same technology.

When it comes to equipment, your MSP will expect you to use a compatible firewall, switch, access points, and back-up hardware.

Many MSPs understand that it could be cost-prohibitive to require their customers to purchase all of the gear before starting managed IT services, so they incorporate the gear’s cost into the contract term.

For example, if you pay your MSP $5,000 per month, it would cover your support, software subscriptions, and hardware.

Still, not all MSPs structure their contracts this way, so you’ll want to ask if your hardware is financed or an upfront cost before signing a contract.

 

User Changes

Throughout your managed services contract, you’re almost guaranteed to add, change, or lose users.

All three of those scenarios require your MSP to update your services to reflect the current staff of your organization.

  • If you add a user, your MSP will have to add licenses and subscriptions for the new employee.
  • If you replace a user, your MSP can transfer your subscription licenses from the old to the new account
  • If you lose a user, your MSP will decrease your subscriptions to reflect your actual user count.

All of these require time from your MSP engineer and changes to subscriptions, and your

Generally, MSPs don’t charge to replace users. However, they may charge to add a net-new user and then incorporate them into your monthly bill at the start of the next cycle.

If you need to decrease the number of users in your organization, your MSP will update your contract (and monthly bill) twice a year.

 

Additional Devices   

Most MSPs, including The KR Group, structure their prices based on the number of users in your organization, assuming each user has one workstation and a desk phone and utilizes your MSP-issued network gear.

This meets the needs of around 90% of managed services customers, but one way your organization may vary is with additional workstations than the one per user standard.

These devices still require monitoring, support, and some security solutions. As a result, your MSP will charge an additional fee for them. (At The KR Group, we charge $15 per month per workstation.)

So, even if you expect to pay $250 per user per month for your 20-user organization, you may see a bill higher than $5,000 if you have extra workstations to support.

As with the other points in this article, you’ll want to ask plenty of questions before signing a managed IT services contract to see how your MSP handles this scenario.

 

Extended-Hours Support

Whether you have a traditional or remote-only contract for managed IT services, you can count on IT support 24 hours a day, 7 days a week, 365 days of the year.

This availability ensures you’ll have support even if a problem arises outside of normal business hours.

This availability ensures you’ll have support even if a problem arises outside of regular business hours. However, depending on your MSP and the contract you sign, some or all after-hours support may be an extra charge.

Let’s break it down.

There are three types of after-hours support:

  • Overnight: 5 p.m. to 8 a.m., Monday through Thursday
  • Weekend: Friday from 5 p.m. to Monday at 8 a.m.
  • Holiday: All day on a federal holiday where your MSP is closed

It’s up to your MSP how they’ll charge to support your service request during any of the above times. Some providers include all of them, while others (including The KR Group) require additional payment for each one.

Either way, if you have an IT emergency outside of regular business hours, you should call your MSP. Any premium you might have will likely pale compared to the money you’re losing because your business is down.

 

On-Site Support for Remote Contracts

Most managed IT services contracts include pre-scheduled and as-needed on-site support, but some customers opt for a remote-only agreement instead.

With this option, if you do require on-site assistance, even during normal business hours, you’ll be charged for time and material outside of your contract.

To plan ahead, your annual remote IT support budget should include 10% of your monthly cost for when you’ll inevitably require on-site assistance. And, keep in mind that on-site support only refers to your organization’s location, not the individual offices of remote users.

 

Agreeing to a Managed IT Services Contract   

Even if you understand the many benefits of signing up for managed IT services, the financial commitment is something you must consider.

However, now you know the overall cost of a managed services contract and how to spot “hidden fees,” such as an audit, hardware, user changes, additional devices, after-hours support, and excluded on-site services. So, you should have a clearer idea of how much you can expect to pay for managed services and, hopefully, more confidence in signing a contract.

Are you ready to take the next step and learn more about what your managed IT services agreement could look like? Then, check out our free e-guide about signing a contract with The KR Group.

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