Three reasons to use an MSP for your business

Managed IT services have made inroads into various sectors. Find out how your company can benefit from this pay-as-you-go strategy

Businesswoman having a business meeting online. Image used for illustrative purpose.

Businesswoman having a business meeting online. Image used for illustrative purpose.

Getty Images

Two decades ago, you probably had not even heard the phrase managed service provider (MSP). Today, if you run a small-to-midsize business, you cannot escape the term. But even if you have heard of them, you might not know exactly what an MSP does or why it might be to your advantage to use one.

Globally, the managed services market is expected to grow from USD 223 billion in 2020 to USD 329 billion by 2025, based on forecast by MarketsandMarkets.

According to IT research and advisory company Gartner, MSP "... delivers network, application, system and e-management services across a network to multiple enterprises, using a 'pay as you go' pricing model."

What this means is that MSPs are essentially an outlet for outsourcing your IT management function. An MSP will take over the day-to-day management of your networks and systems, and may take on such sophisticated services as procurement or strategic planning, depending on your business needs. Because they handle these functions for multiple businesses, their organisation can specialise in staffing the right experts to deliver these services and develop the operational expertise to offer them at a lower cost than any one of those businesses could manage on their own.

Makes IT affordable

The primary concept to grasp in order for this type of outsourcing to make sense is that, for most businesses, information technology has become a commodity. Although IT is a vital part of many companies today, it is also a common one. Today, your business could no more operate without computers and networks than it could operate without electricity.

But, like electricity, most IT functions do not offer any particular strategic advantage to the user. They are vital, but they are equally available to your competition; your company accrues no particular bonus from smooth-functioning IT processes. Instead, it merely limits its liability in functions, which would otherwise be outperformed by competitors.

Like any commodity, then, it makes the most sense to lower IT costs to the minimum required to deliver service reliably. Enter the MSP.

An MSP will essentially serve as your IT department, and will usually do so on a fixed-fee, pay-as-you-go basis. Your technology costs will become predictable and more manageable with an MSP. Because of the scale at which they offer services, those costs are likely to be lower than your business could provide them in-house. Staffing expenses, training, and other overhead costs are built in to the monthly fees.

Reliable IT service

Because the services are delivered on a fixed-fee basis, there is a powerful incentive for the MSP to reduce or eliminate IT failures. Many businesses with in-house IT departments operate on the "break-fix" model; if a computer breaks, someone is sent to fix it. This makes costs unpredictable and all but insures productivity losses from system downtime. Extra costs will simply be drawn out of overall business profits.

But an MSP cannot charge more than the fixed fee agreed upon in the contract. Moreover, they work remotely, centralised far from their clients. This combination has forced them to develop extensive monitoring and prediction tools to reduce unexpected incidents. Moreover, the less work their technicians have to do on your network, the higher their profit margin. It's in their best interest that nothing breaks in the first place.

This is in stark contrast to traditional IT outsourcing firms, which billed hourly and worked as long as it took to fix problems. Usually, they charged a premium for evening or weekend work – the only hours in which issues could be addressed without reducing staff productivity.

Updated systems

An MSP will ensure that your systems are patched up to date, that potential trouble spots are monitored, and that your capacity is adequate to your uses.

Furthering this trend, many MSPs now provide application services, such as hosted email or office suites. The concentration of services allows their technicians to develop even more expertise in managing them, and to handle incidents seamlessly and without ever having to set foot in your establishment.

If your small-to-midsized business has not yet moved to an MSP, you are due at this point to at least consider the option. Evaluate your internal IT spending and projected costs and get in touch with several different MSPs to have them provide bids on providing equivalent services. See what recommendations they might offer and evaluate their ability to take over your IT department for a less expensive and more trouble-free services option.

Note: This article was originally published on Accelerate SME and it has been republished on Zawya with full copyright permission.

Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.

© Zawya SME 2021

More From Technology