CALCULATING MANAGED IT SERVICES PRICING

Realizing that your company needs managed IT services is just the first step. Now, you need to determine what services you need and how much they’ll cost.

To be blunt, calculating the cost of managed IT services isn’t easy. It requires a deep understanding of what you need, as there are many different services and variables that can affect pricing.

Let’s dig into some specifics about managed IT services and the way they are priced.

Understanding Managed IT Services

Most companies use managed IT services because they don’t have the resources to hire an internal team. While having an internal team gives you a lot of control over your IT systems, talented tech professionals command a high level of compensation. Internal staff members also need to be onboarded and receive regular training to stay up to date with the latest technology and security practices.

With managed IT services, your company gets access to a full complement of IT experts. These technicians can bring a range of skill sets and experiences to the table. Furthermore, service providers regularly train their technicians and engineers to ensure that their clients receive top-notch services, including tech support, network monitoring, and proactive maintenance.

Managed IT services can include a broad array of technology functions that are typical for most businesses. Providers tend to tailor their services to small and mid-sized businesses because they often have a limited in-house team. These services typically include the following:

  • Business Internet and Networking. A good service provider can design and manage a custom internet and networking solution. A provider should also be able to offer ongoing support as the needs of an organization change and grow.
  • Remote network monitoring and management. Providers can track the performance of network infrastructure to identify potential issues related to security or performance. They can also provide administrative functions related to changing or updating the network.
  • Tech support. Providers maintain a staff of tech support experts who can address both software and hardware issues.
  • IT consulting. Whether it’s building a network from the ground up or scaling an existing network, a provider can offer expert solutions and advice.
  • Firewall and router support. Cyber security is paramount for today’s companies and a provider can customize its firewall and router support to ensure your company is protected from the latest threats.
  • Backup and disaster recovery. Your company’s data is highly valuable, and a provider can ensure that valuable data is backed up in the event of a disaster.

In general terms, the services offered by a provider support an organization in two key ways: security and agility.

Better Security

A single cyberattack can completely devastate a company, and unfortunately, the number of cyberattacks is on the rise. The massive shift to remote work during the pandemic helped companies to become more flexible, but it also increased the reliance on IT infrastructure.

Managed IT services providers can provide expert network monitoring and cyber security services. Providers are able to remotely monitor an entire network and all the connected devices, taking action if something unusual occurs. Service providers can also take proactive measures, such as adding security patches and performing updates. If a device or system comes under attack, a service provider can remotely take reactive measures to limit the scope of the attack.

More Agility

Due to constantly evolving technology and shifting business needs, companies must be able to easily adopt new technologies, whether those are new mobile devices, laptops, servers, applications, or software platforms.

Managed services providers offer greater organizational agility when it comes to adopting new or different technologies. Service providers routinely add and remove devices from a network. They are also often brought in to install new servers and help with the transition to new facilities.

 To be clear, providers charge fees for their services, but they provide a lot of value in return. They can help a company boost efficiency, reduce costs and expand capabilities. Companies can also tailor their services over time to ensure that they are giving the maximum return on their investment.

Who Benefits from Managed IT Services? 

While companies in every industry can benefit from managed IT services, we have found that the supply chain, finance, and property development industries find these services particularly beneficial.

In the supply chain, post-pandemic business is booming. Supply chain companies must move quickly and keep pace with those around them. If a company’s IT capabilities can’t keep pace, it not only hurts the company itself but also has knock-on effects for other companies and customers further along in the supply chain. Logistics companies also need to be agile when it comes to technology. If a company is growing rapidly, its IT infrastructure may struggle to handle additional sites or an expanding fleet. Managed IT services can help a supply chain company meet its obligations and grow as it takes advantage of opportunities in the industry.

In financial services, technology also reigns supreme. Downtime means lost opportunities and lost revenue. Even if a company can manage to keep its network up, unforeseen slowdowns can sap earnings. Also, compliance issues could be devastating. In addition to costly fines and citations, a company dealing with compliance issues could find itself with a damaged reputation and permanently lost business. Furthermore, financial services companies are a popular target of cybercriminals. Managed IT services make a financial company more secure and agile, while outside experts can help to support compliance.

The property development industry has always been highly competitive. One of the growing differentiators between real estate developers is their use of technology. Today’s commercial tenants expect fully connected properties that are capable of meeting their Internet needs. This puts developers under increasing pressure to offer dependable and contemporary IT capabilities. If a developer can’t meet these expectations, they will lose both revenue and reputational standing while potentially putting their tenants at unnecessary risk for cyberattack.

All of that being said, there are countless use cases for managed IT services and every company in every industry should consider adopting them to meet the needs of their clients and customers.

Pricing Models for Managed Services

Managed service providers use pricing models to charge companies for their services. There are several different models, but the biggest determination for price is whether a company will use fully managed or co-managed services. With fully managed services, the provider supplies a comprehensive IT management solution. With co-managed services, the client company and provider share the overall management of an IT infrastructure.

Smaller and mid-sized companies with limited resources typically use fully managed services because these organizations don’t have the means necessary to hire the needed in-house team. Larger companies will typically use co-managed services to augment their existing IT capabilities. How companies use co-managed services depends on the nature of the work they’re looking to get done. 

Some companies use co-managed services for short-term needs, like major projects or sudden increases in workload. Some companies use long-term co-managed services to fill in the gaps in their IT capabilities. For example, they might use a provider to offer help desk support, allowing the internal team to focus on revenue-generating responsibilities.

After fully managed or co-managed services, a pricing model is the next big factor for determining the cost of managed IT services. The most common pricing models include:

  • Per user. The company is charged monthly for services based on a flat fee for each user.
  • Per device. The company is charged monthly for services based on a flat fee for each device.
  • Tiered. The company selects a surface package based on its IT needs. Some packages offer more comprehensive services, while other packages offer more limited services.
  • A la carte. A company picks and chooses which services it needs, paying for each service individually.
  • Break-fix. A provider only offers services when needed, and the client company pays after services are rendered.

Some companies might be attracted to the break-fix model because it can seem the most cost-effective. In this situation, your company would only be charged if a provider offered assistance on a device failure, cyberattack, network downtime, or a similar event where something broke. This reactive approach might be useful if a company has limited IT capabilities. However, the break-fix model is focused on fixing problems, not preventing them. If your company doesn’t handle routine maintenance, cyberattack responsibilities, and other proactive IT management practices, it runs the risk of the system becoming inefficient and highly vulnerable to attack.

How to Get a Managed Services Pricing Quote

At Taylored Systems, we pride ourselves on making sure our customers are as informed as possible. Our experts can provide detailed information about different services that will meet the needs of your company and the associated costs of those services.

Managed Service Provider Pricing Considerations

While IT consultants can provide a ballpark quote, there are many pricing considerations that must be factored into the final cost. A service provider can conduct a comprehensive assessment of your IT infrastructure that focuses on a few key variables, including the number of:

  • Users
  • Workstations or computers
  • Servers
  • Firewalls
  • Routers
  • Switches
  • Software licenses
  • Connected mobile devices

A comprehensive assessment will also focus on your IT processes and specific technology needs. This can include security challenges, compliance requirements, system complexity, internal capabilities, number of office locations, remote work capabilities, and server locations.

After an assessment has been conducted, the managed services provider can then consult with company stakeholders on the key components of a managed IT services solution. This consultation would cover:

  • The cost of services: What is included in the price, and what is not.
  • The level of support: What kind of support is included, and what are the response times
  • The technology used: What kind of technology is used to deliver the services, and is it up-to-date
  • The experience of the provider: How long has the provider been in business, and what is their reputation

While a managed IT services quote can be helpful, providers and potential clients must evaluate these factors to make an informed decision.

Pricing Quote Features

When viewed as a tool. A managed IT services quote has several key aspects that make it essential for acquiring the managed services your company needs.

First of all, it’s easy to get. All you need to do is contact a provider and supply some basic information about your company. There’s no need to give away trade secrets or intellectual property. A provider simply needs to know about your essential IT needs, your current capabilities and desired IT capabilities. A provider can then come back with a ballpark quote that your stakeholders can use as part of their decision-making process.

A managed IT services quote is also customized to your specific organization. When you tell a provider about the specific services you need, you get a quote that is tailored specifically to your organization. This customized quote is much more valuable than a one-size-fits-all quote found on the internet or one generated by an online calculator.

This brings us to accuracy. While calculators and AI-generated information might be novel, fast and convenient, the accuracy of these sources leaves a lot to be desired, and putting too much trust in them can be a costly mistake. Getting a quote in-person or over the phone from a real human being allows you to clearly express your capabilities and needs to someone who understands nuance. Local consultants in Indiana also understand the business environment around your organization in a way that an automated tool never could.

Finally, you can get a quote quickly. After a short consultation, you come away with valuable information that expedites your decision making and shrinks the timeline for getting the services you need.

Frequently Asked Questions

If you have questions, it’s best to speak with a Taylored Systems representative to get them answered. But before you do that, take a look at some of our frequently asked questions to see if they can provide some answers you’re seeking.

How Accurate is a Managed Services Pricing Quote?

A quote is meant to provide a ballpark estimate. It should give you a sense of what it will cost to outsource some or all of your IT capabilities.

To receive a quote, you’ll need to contact a provider and supply information about your company, its technology needs, and its current capabilities. A provider will ask a few follow-up questions and then develop an estimated cost for the services your company needs.

A quote is a rough estimate that is meant to provide transparency and clarity. If the estimate piques your interest, you can move forward with the provider on a detailed consultation. This should not be seen as a sales call or meeting. Providers are interested in understanding the value-generating areas of your business and its areas of need regarding technology. They can then advise you on which services are best suited to your organization.

The consultation is followed by a formal assessment of your needs and capabilities, both of which are offered free of charge. You will then receive a proposal outlining your managed services solution, which acts as a final quote on services.

What Is Included in the Price of Managed IT Services, and What is Not?

The services offered by a provider will depend on the pricing model. With fully managed IT services, your company receives comprehensive services, and there’s no need to commit significant resources moving forward. The provider is tasked with regularly monitoring, protecting, maintaining, upgrading, and optimizing your IT infrastructure. With fully managed services, the provider is also there to provide help desk support.

With co-managed services, the provider handles some tasks and your in-house team handles the rest. A provider could act as a supporting role, allowing your in-house team to do the heavy lifting with regard to IT management. A provider could also act in a lead role taking on key projects while your in-house staff handles routine maintenance and support issues.

With tiered and a la carte pricing models, the services that are provided can vary significantly from provider to provider. With a break-fix model, a provider only offers services as needed.

How Do I Evaluate the Level of Support Offered by a Managed Services Provider?

Not all service providers are created equal, and it can be difficult to know which ones will offer a superior level of support. Every situation is different, but you can generally evaluate the level of support that a provider will likely offer by looking at the provider’s following qualities.

  • Expertise. The knowledge and credentials of a provider’s staff members are critical to the level of support they will provide. When assessing a potential provider, ask about the skill sets of their engineers and technicians. Ask about previous projects that involved the type of expertise your company needs.
  • Backup and recovery methods. Data loss is a common occurrence, and a service provider should have reliable backup and disaster recovery methods. Ask potential providers about their approach and evaluate it based on your needs. For example, if your ability to generate revenue is based on rapid disaster recovery, you need a provider who can deliver that service quickly.
  • Ability to scale. If you anticipate significant growth for your company in the near future, you want a provider that can support that growth. Ask potential providers about their ability to scale services, including support capacity and migration capabilities.
  • Security track record. When it comes to IT infrastructure, security is paramount. Ask potential providers about their security services. Ask if they can refer past cyber security clients or provide testimonials from them. Find out if they have an in-house staff or use third-party security vendors.
  • Communication and collaboration. Consider all of your interactions with potential providers. Were they transparent and easy to work with? Where are they roundabout and confusing? Client testimonials should also speak to these qualities in a provider.
  • Vendor management. Managed IT services often involve the use of third-party vendors. Ask prospective providers which vendors they use and look into those vendors to see if they have a track record of success.
  • Service level agreement (SLA). A provider should furnish an SLA that lists the services that will be provided. It typically includes guarantees for things like uptime, response time, and resolution time. Carefully review the SLA to ensure that the provider will meet your needs. Ask about exclusions and penalties for not meeting the terms of the SLA.

 In addition to looking into these aspects of a potential provider, it’s also important to ask questions that truly differentiate one provider from another. Every company will try to sell you on its unique value proposition, but the best providers can back up their claims with hard data, client testimonials and case studies.

A Managed IT Services quote is an effective tool, but there are a lot of factors that go into a pricing structure. Importantly, you need to ask about additional costs associated with software, hardware and potential third-party services that you might need. When it comes to a cost-benefit analysis of each provider, it’s important to think about soft costs such as lost opportunities due to downtime.

Transparency is also critical to getting the most out of your investment in managed IT services. Ask potential providers about the key performance indicators they provide and how they communicate them. Once again, client testimonials are very useful when it comes to evaluating a provider’s track record of transparency.

Get a Custom Pricing Quote

Consider reaching out to Taylored Systems to learn about our range of IT solutions. We have been providing business internet and networking services for many years. We also offer IT consulting services that your company can use to optimize its technology capabilities. We also offer our Hoosiervue network monitoring platform that allows you to have peace of mind when it comes to the security and operation of your network.

Our experts are ready to speak with you, whether you want to request a quote or simply talk over your possible solutions.