Part 1 – Saving Money!!!
In this blog I will address the first two benefits as they are closely related.
Managed Service Providers (MSP) provide outsourced day-to-day IT management, monitoring and support. MSPs provide a cost-effective method for improving business operations and productivity. When engaging an MSP, you do not relinquish overall managerial control and responsibility for the operations being outsourced and thus remain accountable. Plus, you get to choose exactly which services you want managed externally, and which ones you’ll keep working on in-house.
The MSP will handle the often time-consuming, complex, repetitive, and arduous work involved. Outsourcing to an MSP is becoming a growing trend in business as more and more organizations come to realize the benefits of moving many of their day-to-day IT operations to a third party. Allowing them to focus their time and resources on the activities that make the company profitable.
Here are 7 benefits of working with an MSP.
- Money Savings
- Predictable Spending
- Proactive Solutions
- Access to Greater Depth & Breadth of IT Staff
- Faster Response Time
- Vendor Management
- Peace of Mind
While we have clients that range in size from 10 -200 end users for this example I will focus on two “typical” organizations.
Organization A
- 25 end users
- 3 servers
- One location
Given the relative simplicity of the network architecture Org A could get by with a relatively junior network admin. Let’s assume you are able to find a fresh network admin willing to take the job for $50k. In today’s job market that may be wishful thinking but lets assume we find this unicorn. Assuming a burden rate of 15% the total payroll cost would be approximately $57,500 per year. This example will disregard the cost of hiring and training the new employee even though the typical tenure of this type of position is 2-3 years. So, we have hired our junior network admin and he cost us $57,500 per year. Additionally, he works 8:00 AM – 5:00 PM, takes 2 weeks vacation and 6 sick days each year. That’s 20 days per year out of the office.
Now let’s compare the $57,500 annual cost, 40 hours/week coverage and 20 days each year out of the office to working with an MSP. The flat monthly fee for management & support of this network would be $2,175 per month or a total of $26,100 per year. This includes 7:00 am – 7:00 pm help desk coverage with no vacation or sick days. That’s an annual savings of $31,400! With a lot more coverage.
Organization B
- 50 end users
- 5 servers
- Two locations
Org B’s architecture is a bit more complex. Given the size of the organization there is probably the added complexity of a storage solution that will need to be managed on top of the 5 servers and those 50 end users. Org B will need to hire a higher level network admin. Realistically the individual will probably be in the $70,000+ salary range but for this example let’s assume we are able to hire our admin for $60,000. Using our 15% overhead burden assumption the total cost of our network admin is $69,000. Again, this example will disregard the cost of hiring and training the new employee even though the typical tenure of this type of position is 3-5 years. So, we have hired our bargain network admin and she cost us $69,000 per year. She is a much harder worker (needs to be) and works 8:00 AM – 6:00 PM, takes 2 weeks vacation and 6 sick days each year. Once again that’s 20 days per year out of the office.
Now let’s compare the $69,000 annual cost, 45 hours per week coverage and 20 days out of the office to working with an MSP. The flat monthly fee for management & support of this network would be $4,075 per month or a total of $48,900 per year. This includes 7:00 am – 7:00 pm help desk coverage with no vacation or sick days. That’s an annual savings of $20,100! Again, with a lot more coverage.
In both of our examples the MSP route yielded significant cost savings (30% – 55%) vs in-house IT staff. Additionally, the MSP cost is fixed vs potentially having to bring in outside consultants to cover vacations, fill in knowledge gaps of lower end IT staff or handle catastrophic situations. In an earlier blog I mentioned that CDOT spent over $1.5 million in labor cost to clean up a recent malware infection. That worked out to $750 per workstation and took six weeks. Most small and mid-sized for profit organizations cannot afford that expense or time.
These are just two of the benefits of working with an MSP. Start getting more for less! If you would like to learn more or explore if working with an MSP is a good fit for your organization shoot me an email @ [email protected]
