When organizations contract managed service providers (MSPs), it might be seen as a financial gamble that will only pay off for business strategy and talent streamlining. As managed IT service is increasingly called upon by a range of businesses, from startups to multinational conglomerates, there’s a clear indication that cost-cutting may actually be intrinsic to the process of engaging MSPs. A new study shows that the return on investment (ROI) concerns for potential outsourcers, although not to be taken lightly, are a worry that seems to be disappearing in this market.
IDC research found that the median MSP funding from organizations was just under $275,000 for per 100 users. The investment paid off in under 6 months, with ROI reaching a whopping 224% for a 3-year observation period. This represents a possible $400,000 in annual savings, a make-or-break margin that could be the lynchpin for SMB success. Furthermore, the potential increase in productivity among employees and bolstered IT afforded by MSP guidance could account for an additional $230,000 in revenue.
Modern infrastructure spending is arguably the biggest red flag for a bottom-line assessor. The costs associated with licensing, training, and consulting pile on quickly. Moving to a monthly payment model through an MSP narrows the sometimes-tenuous scope of focus and allows for better management of resources. The IDC study reported that up to $146,801 could be saved, based on a 100-user example. Productivity is upended by any downtime, a needless distraction that managed IT service is meant to preclude. Employees lost an average 12.5 hours per year on server downtime, and 6.2 hours for network downtime. MSP help could whittle down these numbers by over 85% and save around $60,000 per 100 users in the process.
In-house IT often means more volatility in day-to-day needs and expenses. The lack of flexibility ends up requiring a higher overall capital investment and inconsistent pricing. Organizations with 15-75 employees, or those exhibiting exponential growth in a short time, are in a particularly tough spot for this decision, but IDC research again found the benefit of managed IT extended to medium-sized staffing. Properly reallocated personnel resources without the burden of extra staffing could promote a 42% increase in productivity.
Based on these numbers, matching with the correct MSP has become a safer bet than ever. Dependable monthly costs paired with proven IT expertise is a difficult offering to ignore. Businesses leaving the nitty gritty to specific professionals have the ability to refine platforms and back future endeavors with the savings from an MSP arrangement.