Traditional IT Provider vs. Managed Services Provider: Which is Better?
In the digital age, choosing the right technology is the key to running a business successfully. Every company’s tech needs are unique, but there’s always a need for full connectivity that keeps business flowing smoothly without interruptions.
Traditionally, most companies have an information technology (IT) person or department to support their digital efforts and help employees stay connected. This includes handling a staggering array of tasks, from setting up physical workstations to maintaining the company’s communication and data management networks.
The demands of these activities often cause companies to seek outside help with IT tasks. This is where managed services providers (MSPs) come in. While traditional IT support and MSPs handle many of the same tasks, there are also many differences between them.
What is Traditional IT Support?
Traditional IT support comes either from within an organization’s own IT staff or through an outside IT services provider. The daily IT work is usually reactive in nature and focuses on resolving pressing issues that limit the organization’s ability to communicate and conduct business.
In terms of maintaining functionality, most IT departments use a support channel or ticketing system that prioritizes requests and tracks issues through the process until they’re resolved. When users need help, they’re instructed to notify the help desk, provide details, and wait for a resolution to their issue.
What are Managed Services?
Managed services are provided by an outside company and are a form of proactive, rather than reactive, technology management. An MSP works in constant monitoring mode by checking the status of your operation and anticipating issues before they cause damage or downtime.
In this way, your MSP is always on in the background to protect your organization from downtime that can impact productivity. While the MSP can accept support requests as needed, there are fewer urgent issues due to constant monitoring and protection.
A company that uses managed services shifts responsibility to the MSP for maintaining and anticipating a wide range of functions, including staffing, workflow, maintenance, and even some aspects of IT budgeting. This relieves a burden from the organization, improves its mission focus, and frees up its organizational resources to address other needs that more directly impact day-to-day business.
What are the Main Differences Between IT and MSPs?
When you compare IT and MSPs, several major differences are clear. As mentioned above, IT is primarily reactive while MSPs are primarily proactive. Taking this point one step further, MSPs also tend to be more capable of maintaining complete business continuity.
Business continuity is the ability to keep working without interruptions in the flow of daily business. Even when problems arise, a business with strong continuity can find alternate solutions and keep working efficiently. The average employee/user might not ever notice a moment of downtime when there’s good business continuity.
Most small to midsize businesses in the U.S. face at least a few hours of downtime per month. The cost of downtime is astronomical at Fortune 500 companies, but even at small businesses, it can still be more than $100 per minute. One study found that for 91% of companies, a significant period of downtime puts at least $300,000 at risk.
MSPs are better than traditional IT at preventing downtime and preserving continuity because they have the resources and strategies to head off threats before they become emergencies. By contrast, a company’s in-house IT staff might be so overwhelmed by focusing on specific needs that major issues aren’t obvious until a massive workflow interruption has already occurred.
Another main difference between traditional IT and modern MSPs is that system updates and fixes stay fully on track with an MSP. This is often hard to accomplish with in-house IT, which faces time and manpower limitations an MSP can more easily overcome.
All it takes is one missed update on antivirus software for your company to become vulnerable to breaches and cybercrime. But your MSP can stay ahead of the curve on the latest technology and updates, even if your IT staff can’t.
Cost is also a factor. Although there’s a stereotype that hiring an outside MSP provider is more expensive than hiring an IT person, this isn’t necessarily the case. An IT professional earns an average of $55,000 to $74,000 annually plus the cost of benefits like a healthcare and retirement plan. Multiply this cost by each IT staffer, and you’ll soon be spending a sizable portion of the staffing budget on IT.
The services of an MSP vary depending on the size and needs of your organization. Your region is also important because MSP services are generally much more expensive in large, tech-intensive areas like San Francisco and New York City. A very small business in a small town might pay as little as $100 per month and a large city enterprise could pay $10,000 per month depending on the MSP. Services like strategic planning and data storage are usually handled as separate fees.
Payment for an MSP’s services is typically handled through monthly fees and/or services that are provided in blocks of hours. This structure allows a company to have a certain level of predictability in its MSP payments, with some variance based on specific needs that arise over time.
Which Should We Choose?
When your company is evaluating a choice between traditional IT and an MSP, look at the full scope of your business needs including future plans for company expansions. While the best predictor of your company’s current needs is its past needs, there must also be plenty of room for your tech solutions to scale up as your company grows.
Assess your company’s current capacity to handle routine matters like system updates and access to data storage. Calculate how much downtime you’ve had in the past year and examine the sources of the outages. Is an IT staff capable of addressing these issues or would an MSP be better equipped to handle them?
Consider your needs for urgent and after-hours services when problems arise. Your employees need to be able to access company systems whenever business is happening. Can an in-house staff handle round-the-clock service and support, every day of the year?
Your company’s industry, products, clientele, and specialized needs are also important. Do you have a custom setup that requires extensive managed services planning from an MSP? Is there a new company mission statement or strategic plan that involves refining your approach to communication, structure, or data management?
Signs That You Need an MSP
As you decide between a traditional IT setup and selecting an MSP, consider the characteristics of your organization that indicate a need for certain tech services. Below are the top signs that your company is a good candidate for working with an MSP.
Tech Innovation
Innovative and highly tech-focused companies often need the more extensive and proactive approach an MSP can provide. As a company that relies on its tech, you don’t want to suffer an outage or delay that interferes with your ability to do business. The protection of an MSP helps preserve your profitability and reputation.
Connectivity and Remote Work
If your company runs 24/7 with a remote workforce of people located in far-flung areas, it’s important to maintain constant connectivity. An MSP helps support the maximum possible uptime for a highly connected organization with numerous remote workers.
This is more important now than ever. During the COVID-19 pandemic, the reliance on remote work rose sharply and has remained strong. McKinsey research shows that up to 87% of all U.S. workers have been offered the opportunity to work at least partly from a remote location.
Growth Goals
When a company has aggressive goals for growth in the coming year, its IT infrastructure and support must be robust enough to support it. Consider whether your company already has ample support or if an MSP could provide a higher level of support that better suits your growth-focused needs.
Employee Retention
If employee satisfaction and retention are among your company’s goals, pay close attention to the usability of your internal systems and processes. Research shows employees hold high regard for strong internal customer service, which encompasses things like communication channels, functionality, and openness to innovation.
Business-Critical Applications
Are certain applications or platforms mission-critical for your business? If a certain aspect of your infrastructure is so essential that your entire business goes down when it goes down, you must strive for full business continuity. Although no MSP can necessarily guarantee 100% uptime, an MSP can typically maximize uptime and prevent issues that impact business-critical tasks and systems.
- Inventory management
- Personnel management
- HR and training activities
- Sales team access
- Graphic design and video production
- Customer portals and purchasing
- Regulatory compliance
Overwhelmed Staff
Businesses sometimes make the mistake of not considering the current workload their IT staff is already facing. Before assuming your internal IT department is capable of handling your company’s current and future needs, have a heart-to-heart with the on-the-ground employees who are providing support currently.
Do they need extra resources, money, or time? Would the support of an MSP make their jobs easier and more effective? An overwhelmed staff is a red flag that you need an MSP.
Slow Resolution Times
When an issue arises, how long does it take to resolve it? Your resolution times are another key indicator of your need for an MSP. Extended resolution times with long waits are unacceptable for most businesses.
Look at your current resolution times and benchmark against industry standards. Here are a few types of metrics you can use to measure your current level of success with resolving IT connectivity issues.
Performance metrics. These are measurements that show how quickly you can resolve issues individually and staff-wide. For example, you can measure all help desk resolution times from the moment the ticket is submitted until the moment it’s closed. An average resolution time of 48 hours might be acceptable for a very small business, but a larger business with extremely demanding clients could consider this unacceptable.
Productivity metrics. Your productivity metrics show areas where efficiency could be improved for the benefit of your company and its internal/external customers. For example, you can track the total number of unresolved and resolved tickets within a certain timeframe to see how productive you are at taking care of issues that impact the workflow.
User metrics. This is a way of measuring the impact of your IT infrastructure and its stability on your users, including employees, customers, and partners. You can measure their satisfaction and estimate whether they’d recommend you to someone else, plus you can ask for open-ended feedback that provides insights into what’s going wrong and right.
Why use the metrics listed above? They reveal real-world data about the effectiveness of your current setup and where there’s room for improvement. In other words, they give you a reality check about your organization’s processes and systems.
As an example, productivity measures often show areas where an MSP might offer improvements over the level of productivity your in-house staff can manage. An MSP can likely step in to relieve backlogs, start working more proactively, and make your overall IT management much faster and easier.
IT vs. MSP: Which Will You Choose?
Choosing between staying with a traditional IT setup and opting for a new relationship with an MSP might not seem like a big deal at first. Until you’ve taken time to consider the widespread effects we’ve described above, it’s hard to see the full impact. When you notice how the choice could affect so many aspects of your business, it’s clear the decision matters.
Here’s one last thing to keep in mind as you make your choice. The user experience is now more important than ever. User patience is now at an all-time low due to a mix of technological, economic, and societal forces. People in the U.S. and around the world have come to expect fast, consistent technological connectivity.
The latest research shows half of all American consumers won’t wait more than 5 seconds for technology to work correctly. And 79% of customers expect companies to respond to them within 24 hours, even on something as simple as a social media post.
Your company can’t afford downtime. Anything you can do to improve the speed and effectiveness of your company’s technological offerings is good for its bottom line and great for its reputation. This might just be the perfect time to move to an MSP.
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