The Ultimate Guide to Managed IT Services
Regardless of what kind of business you're running, you need someone to support your IT.
For some businesses, that takes the form of an IT department, but with your small or medium business, it might not be possible to hire an entire team of experienced IT professionals in house.
So you’ve likely landed on relying on an entry-level IT engineer who doesn’t know how to solve every problem that arises.
Or, you’ve realized that option wouldn’t work, and you’re trying to handle your IT environment on your own.
But you’re not an IT expert. And the time you spend learning and running your technology pulls time away from you doing what you do best: running your business.
The good news is there is a solution many business leaders turn to when they’re in this situation: managed IT services.
Regardless of your familiarity with that term or how it could answer your business’s IT needs, this webpage will help you know for a fact if managed IT services will work for you and if so, what that looks like.
Whether you have no idea what managed IT services even mean or you just need answers to your most pressing questions, we have compiled our most valuable information on managed IT services in one place for you to develop a full understanding of this IT solution.
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Chapter 1: What are Managed IT Services?
As technology advances and companies' dependence on it increases, so does the need to have someone support it.
Managing, troubleshooting, and resolving IT issues requires a specific knowledge set and a dedicated person or team to efficiently handle IT requests.
One option many small and medium-sized businesses turn to is managed IT services.
With managed IT services, instead of having an internal IT manager and department, you contract with a managed IT services provider (MSP) to take over the responsibility of your IT environment.
A managed IT services provider employs multiple highly-skilled and knowledgeable engineers to address the needs of multiple businesses. By using this structure, MSPs are able to scale their resources and be cost-effective. This makes experienced IT engineers accessible to even small businesses.
This type of IT support is a combination of remote IT support as well as scheduled and as-needed visits to your offices.
Here at The KR Group, we’ve found our engineers can resolve around 80% of service requests remotely. However, that doesn’t take away the need for face-to-face time with your provider, so we still make on-site visits to build a relationship and address the 20% of issues that do need support at your site.
Even though they’re servicing many clients simultaneously, reputable MSPs still offer personalized services.
MSPs will assign one of their engineers to your business (although you’ll still interact with the other engineers from time to time.)
When it comes to treating you as an individual customer, your MSP is always reviewing the health and performance of your IT network in the following ways:
Remote monitoring and management (RMM)
The term remote monitoring and management (RMM) is used to describe the continual overview your MSP has on your IT environment. To prevent threats from executing within your network, your MSP uses RMM.
Essentially, it is what allows your MSP to keep tabs on your network despite not always being physically present at your office.
This includes your antivirus, anti-spam, firewall hardware, and DNS filters that are used to identify and stop threats from executing in your network.
Although an MSP engineer will respond to your IT problems 24 hours a day, 7 days a week, they aren’t always sitting with their eyes on your IT environment. As noted above, the constant monitoring software will immediately alert your provider if there is an issue that needs attention.
While not a specific software or hardware component of your IT network under managed services, redundancy is an important aspect of outsourcing your IT and the top benefit of a managed services contract.
Redundancy means you’ll have access to an engineer 24 hours a day, 7 days a week, so you’re never without services.
When you rely on in-house IT, your engineer will inevitably be absent for an illness, vacation, or personal day, and you’ll be without support. Managed IT services engineers still have days off, but since they’re staffed with multiple engineers, you’ll have someone to help you with your IT needs.
Remote monitoring, endpoint protection, and redundancy make managed IT services an appealing option for companies looking to outsource their technical support.
Why managed services?
In a nutshell, opting for managed IT services means you’ll have engineers from a third-party company (an MSP) always monitoring your IT network and available to solve any issues.
By providing a basic definition of managed IT services, we hope we’ve started to help you realize what you can expect from an MSP, and ultimately, by reading this guide, we hope you’ll determine if this option for building your IT team is right for you.
There are a lot of great things about managed IT services and an MSP will work with you to create a contract to meet your needs.
Chapter 2: How to Use Managed Services in Your Business
With an understanding of managed IT services, the next question you might have is how an MSP could be best used in your business.
No two businesses are the same, and neither are their IT needs. This is why there are many different options to choose from, but they all offer the qualities of an MSP discussed earlier.
When it comes to finding the best way to use managed services with your business, the first big decision you need to make is if you want your MSP to be primary or supplemental IT support.
Each of those options has different variations, so there should be a contract type to match your needs.
Using managed services as your primary IT support
When businesses are considering managed IT services, most often they’re looking for complete management of their IT system. This means you have no internal employees involved with handling your IT environment. Instead, you’re trusting your MSP with the entirety of your IT environment.
Like any contracted service, you’ll sign an agreement with your MSP for the services they’ll provide. This document clearly lays out expectations between you and your managed IT services provider (MSP).
We’ll go over what to look for in a contract in Chapter 7, but there are three things you can and should expect from an MSP:
Expectation #1: Knowledgeable, certified staff
One of the advantages of using an MSP to handle your IT needs is you’re guaranteed to have knowledgeable, certified staff.
Your MSP’s engineers should be certified (or seeking certification) for the products they implement in your IT environment. This ensures they have the knowledge to answer your questions and provide you with quality services.
All IT engineers have the basic skills to solve basic problems, such as connectivity issues, software installation, or basic system troubleshooting.
If the engineer’s skills stop there, they’re considered a tier 1 engineer.
If you have a more advanced problem, such as issues with network and security solutions, routing protocols, or hardware platform configurations, you’ll need a tier 2 or tier 3 engineer.
The best MSPs avoid staffing tier 1 engineers, who are only equipped to solve the most basic problems, so you get to your resolution faster.
Expectation #2: Personalized service
Even though an MSP is a contracted service, reputable companies will still work to provide personalized service.
One of the ways we do this at The KR Group is by assigning engineers to work with specific clients. This allows both the customer and the engineer to build a rapport with each other.
On the MSP side, your engineer gets to know the intricacies of your environment while you know who will respond to the majority of your IT requests.
Another component of personalized services is scheduling a regular cadence of on-site visits. Even though MSPs can solve the majority of problems remotely, having regularly scheduled appointments is a chance for your MSP to build a relationship with you and take care of any issues needing on-site assistance.
Expectation #3: Support 24 hours a day, 7 days a week
Along with personalized services, you’ll also have support from your MSP any hour of the day.
MSPs know IT emergencies don’t always happen between 8 a.m. and 5 p.m. Sometimes a critical failure needs to be addressed immediately. MSPs staff on-call engineers to handle these emergencies.
However, not all managed services contracts cover support after normal business hours.
If this is the case, the MSP engineer who responds to your request will remind you of any applicable after-hours charges and ask if you want to proceed.
While some requests may be able to wait until 8 a.m. the next business day, your MSP will also let you know if it needs to be addressed immediately.
All of these qualities make MSPs capable of handling high-level and unique problems in your environment at any time of the day. However, managed services aren’t just designed for the complete support of your IT environment.
Using managed IT services for remote support
A variation of traditional managed services is remote-only managed services. This option provides a lower price point by removing the on-site portion of a contract.
There are no regularly scheduled visits to your office, and on-site support is reserved for problems that require hardware service or replacement.
On-site visits are also excluded from the price of your contract.
If you don’t need or want the frequent hands-on support of a traditional managed services contract, this is a good option that gives you access to managed IT services but at a lower price.
Using managed services alongside existing IT department
Even if you don’t plan on having an MSP take complete and permanent control of your IT environment, you can rely on managed services in many ways.
To whatever extent you do utilize an MSP, you’ll reap the same benefits as if they were your primary IT support.
Two other ways to utilize managed IT services are:
1. Temporary IT support
Even if you have your own internal IT department, you can still work with an MSP.
If you’re a small or medium business (the ideal candidates for managed IT services), then this department is likely only one or two people. Having all or half of your IT department gone for an extended leave or resignation can have a tremendous negative impact on how IT problems are resolved.
Ignoring this deficit will cause IT problems to back up, which will impact the efficiencies of your IT environment. Not to mention when your IT manager or engineer returns or is replaced, they’ll be buried in work just trying to catch up.
Relying on an MSP engineer for temporary IT support allows you to stay on top of IT problems as well as have someone available in case a mission-critical problem arises and your IT department isn’t fully staffed.
2. Co-managed IT services
Another way to partner with an MSP is with co-managed IT services.
If you have an internal IT department but want some external help, you can contract with an MSP in a few ways:
You rely on your MSP for complex issues.
Your MSP only monitors your network.
Your MSP can help you scale during growth.
One way businesses frequently utilize co-managed services is to handle issues their entry-level engineers don’t have the knowledge to resolve.
This option will give you the benefits of having an internal engineer available to provide frequent on-site support but the expertise of a managed IT services engineer.
Another common approach businesses take to co-managed IT services is to monitor your network while your internal department solves problems.
This makes sense for many companies because it allows an MSP to handle the mundane, time-consuming monitoring and frees up your engineers to handle issues.
If your business is growing, so is your need for IT. During this time, businesses look to an MSP to help you set up desktops for new users or expand your IT infrastructure.
Since your normal IT issues take a break while you expand your IT infrastructure, leaning on an MSP for co-managed services during this time can take some of the burden off of your IT department.
Chapter 3: Pros & Cons of Managed IT Services
Now that you have an idea of what managed services are and what options you have for IT management, what can you expect in terms of service?
Like any service or product, there are good and bad aspects you should be aware of.
Benefits of managed IT services
Many businesses turn to managed IT services because the benefits have a positive impact on their business and even answer their IT needs.
These benefits include:
Benefit #1: Managed service providers offer redundancy.
As we discussed earlier, one of the features of managed IT services is it always gives you access to IT support.
This redundancy continues even if the engineer you typically work with is sick, on vacation, or leaves your MSP. By staffing multiple engineers, your MSP will always have someone to respond to your IT emergencies.
Benefit #2: Managed services engineers have expert knowledge.
MSPs have the resources to employ engineers who can solve even your most complex IT problems.
Without contracting with an MSP, this level of a skilled engineer is often unattainable for a small or medium business to hire. This means that even with an in-house engineer, you may still be outsourcing more complex problems.
Not only do MSP engineers have the knowledge you need to solve any problem, but they are technology experts in general.
By serving a variety of businesses, MSPs get to know about the different technology that exists and what problems it solves.
If your IT problem requires a unique approach, managed services engineers can lean on their knowledge and experience with other customers to find the best solution for you.
Benefit #3: Managed IT services are cost effective.
We’ll spend a whole chapter on cost, but right now, we want you to know that managed services offer the most cost-effective options.
This means for the amount of expertise you receive, you spend the least compared to other options.
Most managed IT services contracts cost the same as the salary and benefits of a tier 1 or tier 2 engineer. However, unless you can afford a tier 3 engineer or higher, they won’t have the skillset to solve all of your problems.
Managed services provide that highly-skilled engineer we discussed earlier and do it for around the same price -- or less, depending on the size and needs of your environment -- as a less skilled engineer.
Benefit #4: An MSP is easy to recruit.
If you’re still unconvinced of the value of contracting with an MSP instead of finding an internal engineer, consider the recruitment process.
If you have the budget to procure the skilled engineer you’ll need to adequately handle your IT needs, you’ll still need to find this candidate.
This can be hard to do since these engineers not only require steep salaries but are also hard to come by.
Problems with managed IT services
While great, managed IT services aren’t problem-free, and we’d be remiss not to mention the cons associated with this service.
Some of the common problems customers come across while in a managed services contract include:
Problem #1: An MSP can’t provide constant hands-on assistance.
Your managed services engineer will do everything they can to make sure they’re regularly on-site to provide support and get to know you.
Not only does this help you get to know who is working on your IT and see what they’re doing, but the engineer can become better acquainted with your physical IT infrastructure and your business’s environment in general.
However, you won’t see your MSP engineer every day or even every couple of days. This is something you give up when you decide to outsource your IT support to an MSP.
This can take some getting used to if you’ve had an internal IT department previously and are used to frequent hands-on support.
Rest assured, you’ll still get that in-person assistance from an MSP; it just won’t be every day.
Problem #2: You should value keeping your IT current.
When you sign up for managed IT services, you'll start working with a team that is dedicated to making your IT environment run smoothly. A common hurdle with this goal is outdated hardware or software, often caused by not prioritizing technology.
If technology hasn’t been at the forefront of your mind, your MSP will help bring it there. This can be a problem if you’re uninterested in investing in your IT infrastructure and just wish to maintain the status quo.
However, we should warn you that this would be an inefficient use of resources.
On the engineer’s side, they’ll be bogged down trying to work around outdated technology, which means they’ll take longer to solve your problems. The engineer is also limited when it comes to updates.
On the customer’s end, your users will continue to run into problems related to outdated or inadequate solutions, and the only permanent fix is to upgrade.
Problem #3: MSPs have a size range.
Managed services work best when they are focused on small and medium-sized business customers. Specifically, they’re for businesses with around 10 to 100 users.
This is the sweet spot of needing enough IT support to warrant having a dedicated IT team but not having the resources to hire an efficient internal one.
However, if you find yourself on either end of that range, don’t count yourself out just yet. We’ve had customers with fewer than 10 users and more than 100, and it largely depends on your IT needs.
Weighing the pros vs. the cons
How are you feeling about managed IT services and how they could work with your business?
Do any of the problems resonate with what you need from an IT provider? Do you feel comfortable with the solutions MSPs have for common problems?
Likely, you’ve found yourself somewhere between nodding and saying, “Yes, I need this,” and wondering if the problems would affect you.
To help you better determine if managed IT services are the solution you’re looking for, our next chapter reviews who is and isn’t a good candidate for managed IT services.
Chapter 4: Are Managed Services Right For Me?
If you’ve made it to this point, you should have a decent understanding of what managed IT services are and started to realize how much they could help you with your technology needs.
We want to help you really make sure you know this option is right for you, though, by talking about who is and isn’t a good candidate for managed IT services.
We know not all of these categories will cover every prospective customer, but by making some generalizations, we hope to help solidify your decision to pursue managed services.
Good candidates for managed IT services
There are many use cases for managed services, but in the decade-plus we’ve been an MSP, we’ve noticed a few trends.
The businesses that are a match for managed IT services include:
Ideal candidate #1: Small and medium businesses
As we mentioned earlier, managed services are designed for businesses with a range from around 10 to 100 users.
Executives in businesses within this size range often wear multiple hats, and sometimes that includes technology.
This may work for some time, but as businesses expand and have more complex IT needs, it becomes less and less sustainable to have someone who isn’t specifically trained and focused on IT handling this area of your business.
However, at this size, it likely isn’t in the budget to start an in-house IT department.
Thankfully, there are MSPs for these businesses to work with and hand over their IT management to.
Ideal candidate #2: Larger organizations with some users
The limit placed on managed services contracts relates to users, not employees.
If your business employs more than 100 users, but not all of them need computer access, you’re still a good fit for managed services.
This can be especially beneficial for businesses who don’t have enough office staff to warrant an internal IT department, but still need someone to monitor their IT environment for threats and be available when a problem arises.
Some businesses we frequently see in this category are transportation companies, manufacturing plans, and construction businesses.
Ideal candidate #3: Organizations with industry regulations
By serving multiple clients, including ones in the same industries, MSPs develop knowledge of programs and regulations specific to different industries.
This back-tested knowledge makes managed services a good match for any business that has strict industry standards they must abide by. Your MSP has likely had experience with a customer ruled by the same regulation before, so they know what they need to do to keep you compliant.
Highly-skilled engineers are already hard enough for organizations to come by, but when you add on additional requirements, you’re looking for an even smaller needle in the haystack.
Some examples of organizations that fit this category are schools, healthcare organizations, and financial institutions.
Poor candidates for managed IT services
While we’d love managed IT services to work for every business, that isn’t realistic. There are some businesses that realize managed IT services just won’t work for them.
Some characteristics these bad candidates share include:
Poor candidate #1: Too big or too small businesses
The number of users can make you an ideal candidate, and it can also make you a poor candidate.
MSPs only have the resources to dedicate so much time and support to each customer. The larger your business is, the more IT problems you’ll generate and the more support you’ll need.
This is one of the reasons why there is a user cap on managed services customers.
Additionally, once you have more than 100 users, your business is large enough to sustain and benefit from an internal IT department.
Poor candidate #2: Businesses unwilling to upgrade hardware
Some businesses simply don’t prioritize IT.
Whether it’s because you don’t rely on it heavily (although we’d argue against that) or think investing in technology can wait indefinitely, upgrades may not be on your radar or included in your budget.
However, your MSP will require you to have a plan in place to upgrade end-of-life hardware and software. This allows them to efficiently do their jobs.
Oftentimes, problems within your IT environment can be tied to these systems that are outdated.
Poor candidate #3: Businesses with a very small IT footprint
Technology is pervasive in businesses.
Whether it is communicating with customers over email, keeping digital service records, or specialized programs for your business, technology is important in your daily operations.
However, each business’s individual reliance on technology varies, and at times it may be small enough that it doesn’t require managed IT services.
This can be the case for new businesses who are still building their IT infrastructure or for businesses that are primarily physical labor and only need a few points of technology for scheduling, emailing, and record-keeping.
Managed IT services options
Deciding if managed services are right for you or not is about more than qualifying yourself as a good or bad candidate.
You also need to consider what options you have within managed services and if any of them would work for your business.
When deciding which IT support option is right for you, we encourage you to think of availability, service, and cost. All three of which we’ll explain in the following sections:
Option #1: Traditional managed IT services
Up to this point, when we’ve talked about managed IT services, we’ve generally been referring to a traditional managed services contract.
This includes the complete takeover of your IT environment by a third-party provider.
You’ll have redundancy in service since there is always an engineer on call to address your needs at any time of the day.
The biggest benefit of managed IT services is the high-availability and redundancy it provides. You should never be without IT support since MSPs staff multiple engineers, including one who is on call after hours.
MSPs have lots of experience with IT, which means they’re a wealth of knowledge and have tested solutions.
However, most of this support will occur remotely. Your MSP will schedule on-site visits, but they won’t be there every day. If you’re looking for something more hands-on, this IT option may not be for you.
Managed IT services are typically the least expensive of the three IT options.
Your monthly rate pays for a highly-skilled engineer that is expensive to employ on their own. Since this engineer’s salary is covered by multiple MSP customers, though, the cost of managed services is more budget-friendly than hiring this engineer on your own.
Option #2: Co-managed IT services
We’ve also briefly mentioned co-managed IT services.
This IT support model includes a partial takeover of your IT environment from an MSP.
You’ll still have an internal IT department, but they’ll work alongside a managed IT services team.
Businesses may split up the monitoring and maintenance of their IT environment and assign one task to each side. Or, they may utilize an engineer with less knowledge internally for everyday requests and rely on their MSP when problems require more expertise.
In general, co-managed IT services allow businesses to have on-site availability during business hours from their internal IT department. Their MSP can remotely fill this gap if their IT manager is out of the office as well as provide emergency outside of normal business hours.
With co-managed IT services, you get the benefits of the knowledgeable service from an MSP along with the hands-on service from an internal IT department.
A co-managed IT services contract is more expensive than a traditional managed IT services contract since you’re paying for an IT support contract and the salary of a tier 1 or 2 engineer.
However, it costs roughly the same as hiring staff for a knowledgeable in-house IT department.
Option #3: Internal IT support
This option is fairly self-explanatory.
With an internal IT department, your employees are handling almost all of your technology needs.
You may occasionally rely on external assistance for special projects, but the regular monitoring and maintenance of your IT environment is in the hands of your internal department.
If you rely on a sole IT manager, your availability will be restricted to their availability. Even with multiple IT engineers, you’ll still have to navigate time off requests, sick days, and holidays.
To have the same availability as an MSP, you’ll need to stagger shifts or have on-call availability as part of the engineer’s job duties.
The division of on-site and remote services will be determined by how you want your IT manager to address issues. And, when it comes to the level of service your internal IT department can provide, that depends on who you recruit.
Keep in mind, if you’re a small or medium business, it can be hard to find (and retain) IT engineers who know how to solve all of your IT problems.
If you want comparable service to what an MSP engineer can provide, an internal IT engineer is going to cost you more than a managed services contract and about the same as co-managed services contracts.
The trade-off is they are solely your employee, which gives you greater control over response time and hands-on assistance.
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So you’re a good candidate...
If you’ve determined that managed IT services at least have a chance of benefiting your business, then you’ve only answered a couple of questions and have likely thought of many more.
The rest of this page is dedicated to answering these questions prospective managed IT service customers frequently come to us with, starting with the most common question we get -- how much is this going to cost?
Chapter 5: Cost of Managed IT Services
If you’re still reading at this point, you’ve likely determined managed IT services could do wonders for your business.
However, that doesn’t mean you have no more questions.
In fact, we’re willing to bet that by this point, you’re scratching your head thinking, “Gee, how much is this going to cost me?”
The cost of managed IT services is pretty straightforward, but to help answer your questions related to cost, we have a few things to go over:
How do MSPs charge?
Depending on which MSP you decide to contract with for managed IT services, you may be charged differently.
These different models have pros and cons, so it’s best to read on, determine what would work best for your business, and talk to your prospective MSP to see if they follow that pricing model.
There are four common pricing models you’ll come across in the MSP world:
Model #1: Per-user pricing
As the name suggests, this pricing model is based on how many users are within your business.
This is the pricing model The KR Group uses, and more and more businesses are using this model because it is easy to track.
Every employee has to go through an onboarding process when they’re brought into your company or an offboarding process when they leave, so it’s easy to track and make the appropriate changes to your managed services contract.
Since your contract is per-user, these changes will be reflected in your monthly rate as your per-user count increases or decreases.
Model #2: Per-device pricing
As you likely guessed, this pricing model is based on the number of devices within your IT environment.
Traditionally, this is how most MSPs have charged. However, as reliance on IT increased and the number of devices grew, it became difficult for MSPs to keep track of every device coming in and out of service.
However, this model is not obsolete. Many businesses find the model makes more sense for them if they have a high turnover of employees but rely on the same set of devices.
Different devices are assigned different recurring rates based on their complexity. For example, a server, which requires more knowledge to troubleshoot and solve issues, will cost more per month than a desktop, which even entry-level IT engineers can typically troubleshoot.
Model #3: Tiered pricing
Regardless of if your MSP uses the per-user or per-device model, they may further break down their rates into tiers.
These tiers generally include varying degrees of availability, company size, and term length.
Here at the KR Group, we tier our prices using an algorithm that accounts for the number of users, availability, complexity, and term length.
So, a business of 50 users with a straightforward IT environment and a 5-year contract for remote-only managed IT services will pay less than a business of the same size with a complex environment in a 1-year contract with regular visits to your office.
Model #4: Remote-only pricing
As we mentioned in our previous example and discussed in Chapter 2, remote-only managed IT services contracts are a variation of managed services.
This is generally one of the options in tiered pricing but is significant enough to call out on its own.
With traditional managed services contracts, your MSP remotely solves 80% of the time. The remaining 20% of issues require or are better suited for on-site resolution.
However, with remote-only IT services, your MSP will solve your problems remotely unless they absolutely require on-site resolution.
This means unless you have a hardware failure, you won’t see your MSP.
While you’ll seldom see your engineer in person, the benefit is these contracts cost approximately 20% less than a traditional contract.
How much do managed IT services cost?
Now that we’ve explained how your MSP will charge, let’s talk about what they’ll charge.
Keep in mind that since we use per-user pricing here at The KR Group, that’s what this pricing discussion will be based on.
There are three components you need to keep in mind when pricing out your MSP contract:
Cost factor #1: The audit
Before your MSP starts supporting your IT, they need to audit your environment in order to know what you have.
They’ll review your company’s IT environment to develop a general overview, see what solutions you’re using, and evaluate its size and complexity.
This audit costs $500 per site.
Cost factor #2: A firewall
Every business needs a firewall at every site.
A firewall is the part of your IT environment that serves as the first layer of defense against attacks by preventing unauthorized (and potentially malicious) traffic from entering your network.
The cost of a firewall ranges from $750 to $2,000, and again, you’ll need one at each of your sites.
Cost factor #3: Recurring charges
While the audit and firewall are a one-time fee, the support portion of a managed IT services contract is a recurring cost.
Along with support always being available, the subscription covers a software suite, which includes anti-spam, antivirus, a DNS filter, and off-site backup.
The cost for each user ranges between $85 and $100, depending on the size of your environment. (More users means the software is less expensive since it scales down with size.)
And, if you have users, such as shop floor technicians, who only occasionally use a computer, their rates will likely be even less.
Calculating your managed services cost
Before you start doing the mental math on how these elements relate to your business, we have two equations for you.
Initial fees = Number of sites (Audit + Firewall)
Recurring monthly rate = Number of users x Per-user fee
Theresa’s Daycare has 15 employees but only needs 10 users. Her firewall costs $1,000.
Initial fees: $1,500 = 1 site ($500 + $1,000)
Recurring monthly rate: $1,000 = 10 users x $100
Bill’s Manufacturing has 50 full-time users across two sites. His firewalls cost $1,500 each.
Initial fees: $4,000 = 2 sites ($500 + $1,500)
Recurring monthly rate: $4,500 = 50 users x $90
Dr. Derrick’s Clinic has 100 users across three locations. The firewalls cost $2,000 per site.
Initial fees: $7,500 = 3 sites ($500 + $2,000)
Recurring monthly rate: $8,500 = 100 users x $85
Hidden fees of managed services
The equations we listed above cover most businesses’ managed services contracts.
However, in the interest of transparency, there are a few hidden fees you should be aware of:
Hidden fee #1: You may need to purchase additional hardware.
Your initial fees will include a firewall for each site to make you compliant with the MSP’s hardware requirements.
However, you may need to replace other equipment if it isn’t enterprise grade or is end of life. Having capable, current equipment helps your IT run more efficiently, so you’ll experience fewer issues.
Additionally, MSP engineers can provide quicker resolution for problems that do occur if the hardware is current and capable of handling the workload.
Hidden fee #2: User changes aren’t immediately reflected in your contract.
One of the benefits of per-user pricing is the ability to adjust your contract when you add or subtract users.
However, the process of onboarding new users and their devices falls outside of a contract. Support for the new users also falls outside of the contract until the next billing cycle, likely the next month.
Likewise, subtracting users isn’t immediately reflected in your price but is incorporated in the next billing cycle.
Hidden fee #3: Not all contracts include after-hours or holiday support.
But, this support isn’t always included in your contract. Tiered pricing models often make after-hours and holiday support available at an additional monthly cost.
This doesn’t mean you can’t make a request during these times if it’s not included in your contract. However, you should anticipate your MSP giving you a reminder before they help you.
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Chapter 6: Getting Started with Managed IT Services
Now that you know what managed services are, how they can help your business, and approximately how much they’ll cost, let’s get to the exciting part: What it looks like to start operating under a managed IT services contract.
Up to this point, we’ve focused primarily on the service, but the provider is just as important, so to help you understand what you need to do to start using managed services for your IT, we have a few more things to go over.
Qualities to look for when hiring an MSP
We can all think of times where the provider has made the difference in a service we paid for, and this is likely on your mind as you consider who you’ll partner with for managed IT services.
Not only do you want your MSP to solve your problems, but you want them to be professional and helpful about it.
When you’re looking for an MSP, you should consider factors, such as:
Quality #1: The MSP employs a highly technical workforce.
As a business, you’ll encounter different levels of IT problems. Some will be a simple, straightforward fix that an engineer with basic training can work through.
However, the problems that cause the biggest headaches are ones that require support from engineers with a high level of knowledge.
MSPs employ engineers who can resolve most of your issues without having to escalate to an engineer. While there will always be some variation of skill level among MSP engineers, whoever helps you should more often than not have the answer to your problem.
The best MSPs take this a step further and support their engineers with a technical leadership team.
When engineers, managers, and executives understand the complexities of IT, there will always be someone willing to step in and help you during an emergency.
Quality #2: The MSP communicates with customers clearly.
Handing over the management of your IT environment takes trust, so MSPs know they must foster this relationship with clear and frequent communication.
When you submit a service request, you don’t want to wait and wonder if your ticket went through.
An MSP you can trust will confirm they see your request and have it scheduled, even if that means they won’t get to it right away.
This type of communication helps you know what to expect and reassures you that your MSP is looking out for you.
Quality #3: The MSP ensures customer satisfaction.
Clear communication does wonders in terms of customer satisfaction, but service is still an important part of the picture.
When customers think about service satisfaction, they often point to response time.
For many MSPs, giving a blanket response time is difficult because the workload can vary from day to day, and MSPs triage IT requests based on the severity of the problem.
However, you shouldn’t have to wait weeks for even the simplest issue to be resolved, and your MSP should keep you updated on when they’ll get to your request.
Quality #4: The MSP pursues innovation.
While your MSP’s primary responsibility is to keep your IT environment up and running, they’re capable of much more.
You can work with your MSP to plan for what future IT projects you want them to help implement. This could be moving forward with IoT technology, virtual classroom technology, or anything you think will help your business.
What to expect during an audit
Once you’ve decided what MSP you want to handle your IT, they’ll need to learn more about you before they can start managing your environment.
This takes place during an audit, the first step in the onboarding process.
We briefly mentioned this component of an IT contract when we discussed cost, but there are a few things we should point out:
1. What happens during an audit
Your MSP can perform the audit on-site or remotely, depending on your preference.
Either way, they’re looking at the following:
- The hardware you’re using gives your MSP information on if you’re going to need a new firewall and/or back-up device. (We’ll talk more about this later.)
- The software you’re using -- both security and business -- lets your MSP know how its software suite will differ, if you have any security gaps, and what they’ll be supporting in the future.
- The user count allows your MSP to accurately calculate your monthly rate.
2. How security is incorporated into an audit
In addition to getting an idea of what solutions you use within your network, many managed services audits also include a brief security assessment.
This looks for any active threats or obvious vulnerabilities, so they can be addressed before your new MSP takes over your environment.
It also allows the MSP to start with a clean slate as they begin handling your IT environment.
3. What your MSP needs from you
You can help your MSP with the audit process by having documentation ready for them.
Have a list of everything related to your IT environment, including your hardware, software, internet service, phone service, Microsoft Office 365, security camera services, and badging systems. Your MSP needs all of this information.
If you outsourced any IT assistance in the past, your MSP will want the records of these engagements to learn more about your environment.
By actively looking through your IT stack, your MSP can answer questions, such as:
- How many physical and virtual servers do you have?
- Do you have virtual desktop systems?
- What is the complexity of your enterprise resource planning (ERP) system?
- How much data are you using?
- Do you have multiple ways to access the Internet?
- Do you have a failover circuit?
All of this information helps your MSP prepare to support your IT as well as quote an accurate price for your managed IT services contract.
Along with requiring an audit, your MSP will have specific requirements for hardware and software.
These requirements are designed to help your MSP efficiently serve you.
By standardizing hardware and software, your MSP is repeatedly using the same solutions. Also, it means these solutions are tested and true since your MSP has seen them work in hundreds of different environments.
What are these requirements?
Requirement #1: Hardware
In general, your MSP will require your hardware to be enterprise-grade and currently supported.
These two requirements ensure your devices can adequately support your business, and they’re also less likely to expose you to an attack.
What hardware your business uses depends on many factors, such as your size, industry, budget, etc. However, MSPs require every customer to have a firewall as a basic security measure.
An MSP also requires all of their customers to use the same make of firewalls. Standardizing this component of your IT stack allows the engineers to use a consistent interface and quickly navigate through troubleshooting and resolving problems.
Requirement #2: Software suite
MSPs also have requirements when it comes to the security software you’re using.
Along with providing uniformity, this requirement ensures all clients have some protection against security threats.
Additionally, you’ll need to install your MSP’s RMM toolkit, so when needed, they can remotely solve your IT issues.
Requirement #3: Back-up solutions
All managed services customers are also required to have a back-up solution.
Having an off-site back-up solution is your last line of defense if something were to take your data offline.
This provides a way to restore data if you were to lose it to a natural disaster, such as a fire or flood, or a cyber attack.
Generally, managed services customers choose to back up their data on a physical device as well as a back-up solution hosted in the cloud. The latter guarantees you’ll have a copy of your data if a disaster (fire, flood, or power surge) physically damages or destroys your IT stack.
However, if you already have a back-up device or solution, you can talk to your MSP about incorporating it into your services.
Creating your managed IT services contract
These components make up an important part of the contract you’ll sign with your MSP before they take over your IT environment, but they’re only a small portion of what’s included.
Of course, you want to know what hardware you're required to implement and what software you'll be using, but there are other important considerations you'll need to make, which we review next.
Chapter 7: Your Managed Services Contract
So far we’ve covered what is in the contract itself: monitoring from your MSP, IT service, and software suite. Now, you know that managed services can meet your IT needs.
But, there is still one big question to answer: How do you sign up for managed services?
The simple answer is through a contract with your provider.
However, there are several important components of this contract you should know before you sign off on the dotted line.
Contract term length
When it comes to your managed IT services contract you have three options for its length:
This option has the least commitment but also gives you the least amount of time to connect with your provider.
The ideal customers are those who are unsure if managed services are the best option for them or want a trial period with their MSP. Alternatively, these customers may view managed services as a short-term solution.
There is no cost incentive when it comes to 1-year contracts, unlike multi-year contracts.
This contract gives you time to build a relationship with your MSP. The engineers can spend more time getting to know your environment and help you make IT work effectively for your business.
For agreeing to longer contract terms, many MSPs offer a premium rate. Here at The KR Group, our MSP customers committed to 3-year contracts receive 15% off the price of managed IT services.
This option requires the most commitment, but in return, offers the highest level of discounting – 25% off your annual contract.
With ample time to work with your MSP, they’ll help you plan for future upgrades or refreshes.
The largest con of this contract option is that for some businesses five years may seem too long to be tied to a contract. Most MSPs require you to pay out the remainder of your contract if you terminate their services.
Handing your IT environment over to an MSP means you are no longer the one who has to worry about finding the solution.
You do still have to let your MSP know when an issue arises, though, so they can schedule a time to work on the issue and come on-site if needed.
However, not every IT problem is created equally. MSPs prioritize service requests based on the following criteria:
What is the importance of the affected system(s)?
The solutions that make up your IT environment serve different purposes and have varying levels of importance depending on your business.
This is most obvious when something stops working.
When prioritizing service requests, your MSP will look for the requests with the biggest implications and give them the highest priority. Their primary goal is to keep your business running.
Issues that halt production, mission-critical IT problems, are given the highest priority while those that aren’t critical to your business’s main functions are given a lower priority.
How many users are affected by this problem?
When deciding how to triage a service, your MSP will also ask how many users are affected by the problem.
If the issue affects the majority of your business it is more imperative to address than something that only affects a few.
By using this metric to triage IT service requests, your MSP can prioritize those issues that are having the largest negative impact on your environment.
Are there possible workarounds or existing redundancy for this issue?
MSPs also consider if there is any way to work around the issue until they can address it.
This could be hardware redundancy, an alternative application (Mozilla Firefox instead of Chrome, for example), or another workflow you have in place or your MSP can advise you on.
If a workaround solves your problem temporarily, your MSP can place a higher priority on service requests that don’t have a workaround while still keeping tabs on your issue.
Does this problem pose a security risk?
We discussed in Chapter 6 some of the software and hardware requirements your MSP has to provide some level of cybersecurity, but none of them are foolproof.
So, it is possible your issue could include a security risk that would give it a higher priority than one without this associate risk.
An MSP’s reasoning behind this is that an unaddressed security risk could result in many more issues than the one you’re currently requesting service for.
All four combined
In real-time, your MSP won’t make a decision just based on one of these factors but rather a combination of them.
For example, an issue that impacts a small number of users but poses a security risk could be prioritized above one that affects more users without a security risk tied to it. Or, if a server goes down that would cause production to halt if it weren’t for your hardware redundancy, could receive lower priority than a service request with a smaller impact but no workaround.
While prioritization does play a role in how long it takes for an MSP engineer to address your specific issue, it doesn’t mean your request will never be addressed.
Your MSP should quickly confirm they’ve received your request, and keep you updated on the status of it. Regardless of your issue’s impact on your business, you should never go weeks without it being resolved.
Requesting after-hours support
Now that we’ve clarified what IT issues would receive the highest priority, we can talk about how MSPs provide support after business hours.
While you’re welcome to make a request at any time, after-hours service requests should be reserved for emergencies.
Depending on your contract, service after normal business hours may or may not be included. (Make sure to consider this when going over the initial contract with your MSP.)
If it’s not included, your MSP will gently remind you that it falls outside of your contract and ask if it can wait until the next business day.
Either way, an after-hours request means the MSP’s on-call engineer is working past their typical 40-hour workweek, so use this service judiciously.
If you do need to engage support outside of business hours, keep the following guidelines in mind:
Tip #1: After-hours support requests should be called in.
If you only take one thing away from this section on after-hours support, let it be that you should call in your service request if it occurs after normal business hours.
Many MSPs, especially small and medium-sized ones, don’t have the resources to employ an engineer to be actively reviewing online service requests all through the night. However, they will have an on-call engineer whose phone will ring when you make a service request via a phone call.
Calling in your service request will make sure someone sees your ticket, connect you to a live person to ask questions immediately, and is, overall, the most efficient way to make this type of IT request.
Tip #2: After-hours support will only be on-site if necessary.
When your MSP’s on-call engineer starts working on your emergency request, they’ll see if it can be resolved remotely first.
This saves travel time from the engineer’s home to your office (and resulting travel fees.)
However, not all problems can be solved remotely. Particularly if your emergency involves malfunctioning hardware, your MSP may have to travel on-site. This situation will be the engineer’s last resort.
Tip #3: Response time for after-hours emergencies can vary.
How long it takes for your MSP to start working on your issue depends on if the engineer can resolve your problem remotely, or if they need to travel to you.
Regardless, the engineer should confirm they’ve received your request within half an hour of you calling it in.
If they don’t immediately pick up the phone and start working on the issue, they will call you back within a half hour to start the process of diagnosing and ultimately resolving your emergency.
In the end, your MSP knows that if the issue is important enough to engage support after business hours, then it means it needs prompt attention.
What does your managed IT services contract look like?
Your MSP will have some non-negotiables, such as hardware and software requirements, but term length may vary along with how many users you need to be supported.
But, along with details on what your monthly subscription covers, your contract also guides you on how your MSP can support you for all kinds of IT service requests at any time of day.
Chapter 8: Managed IT Services and Your Business
When it comes to IT, there are many complexities. However, the goal of managed IT services is to handle the intricacies of your IT environment, freeing you up to focus on the other important tasks of your business.
To recap, signing a contract for managed IT services means you’ll have a dedicated team with experience continually monitoring, maintaining, and supporting your IT environment. This includes reviewing the health of your network along with keeping watch for cybersecurity threats.
Better yet, managed IT services include redundant service, meaning you’ll never have to worry about not having someone to support your urgent and daily IT needs.
This service is generally less expensive than the alternative of a highly-skilled, internal IT manager. You can estimate your cost based on how many sites you have ($500 each for an audit and $1,000 to $2,000 per firewall) and how many users you have ($85 to $100/each).
So whether you use managed IT services as your primary support or to complement your existing IT department, you can expect redundant, highly knowledgeable, and cost-effective service.
Certainly, you should consider some of the common problems of managed IT services, such as the lack of constant hands-on assistance, the need to keep your IT environment current, and a limited size range.
But, if you are a small or medium business or a larger organization with some users (manufacturers fit this description really well), then this IT solution could work really well for your business.
So, find an MSP with a highly technical workforce -- including the leadership team -- and that communicates clearly, ensures its customers’ satisfaction, and pursues innovation. They can walk you through what a contract with them would look like.
With a contract signed, keep in mind your new MSP’s policy for engaging support during normal business hours as well as overnight, on weekends, and on holidays.
And, if you’re looking for more information about how The KR Group would customize a managed IT services contract for your business, you can schedule an appointment with one of our technology experts.