Should Your Company Outsource IT?

December 16, 2019

Introduction

IT service providers deliver the technical expertise small businesses need at a much lower costthan hiring IT staff. They can recommend, install, and manage technology according to business’objectives and core competencies and ensure that critical data is safe.That’s why nearly 70% of U.S. small to medium sized businesses (SMBs) work with an IT serviceprovider for some or all of their IT needs.There are many considerations for SMBs thinking about moving their IT to another company. Inthis eBook, we’ve summed up the key factors to help you decide what’s best for your company.Let’s get started

What's an MSP?

An MSP, or managed service provider, is an IT service professional to which SMBsoutsource their IT needs.MSPs are the guardians of IT, delivering ongoing monitoring and management ofclient applications (email, web site, security, etc.) and IT infrastructure remotely.This is typically accomplished through remote monitoring services, which allowsthem to keep tabs on the health of their clients’ IT environments, change andupdate systems, and troubleshoot problems. MSPs closely monitor a wide varietyof IT solutions a business has implemented, including web apps, desktop and servermanagement software, backup and disaster recovery, storage management toolsand security software.Small businesses outsource IT to ensure all their business systems, operationsand networks remain up and running. Managed service providers take a proactiveapproach to IT. Rather than waiting for something to break or shut down, MSPsensure a customer’s IT can avoid most tech issues in the first place. This is huge,because IT related downtime can have a devastating impact on revenue andreputation—especially for smaller businesses trying to grow.

SMB Managed Service Consumption

A survey by B2B research firm Clutch showed that 69% of U.S. SMBs use atleast one IT service provider, regardless of company size. 63% of respondentsindicated they also have dedicated, in-house IT staff. However, this percentagewas much lower among SMBs with 10 or fewer employees—only 31% of thatgroup have in-house IT staff.

MSPs typically deliver services on a subscription basis; companies pay a fixedamount, usually monthly, for a specific set of IT services. Some commonexamples include, but are not limited to:

• Application monitoring/managemenwt
• Helpdesk
• E-mail
• Security
• Storage
• Backup and Disaster Recovery

These services are typically offered either as packaged services, or a la carte,depending on the needs of the SMB. They are also often priced at a fraction of thecost of a full time IT resource. MSPs work with a variety of technology vendors inorder to deliver these services. However, it’s not just about the technology. Rather,the expertise of the service provider holds the most value for SMBs.

Why SMB’s Adopt Managed Services

Moving all or some IT tasks to a managed service allows businesses to focus ontheir core competencies instead of day-to-day IT management. This is especiallyimportant for SMBs, since they are frequently stretched thin from a personnel andbudget standpoint. Obviously, the specific reasons SMBs adopt managed servicesdepend on the unique needs of the organization. For example, the IT needs of afive person company with no in-house IT will be quite different from those ofa 100 person company with a dedicated IT team. However, generally speaking,businesses adopt managed services to improve upon all or some aspect of their ITstrategy or infrastructure. How this occurs will largely depend on the in-house ITexpertise of a given business.

According to IT industry trade association CompTIA, the top reason SMBs adoptmanaged services today is to “improve efficiency/reliability of IT operations”(51%). But, context is important. For a very small business, “improve efficiency/reliability of IT operations” might mean implementing and managing the ITinfrastructure. At the other end of the spectrum, it might mean outsourcing someroutine tasks so in-house staff can focus on higher-level technical challenges.And, 31% of respondents said that they opted to work with a service provider to“free IT staff to work on strategic projects.” MSPs can provide different levels ofsupport to meet the technology requirements of different businesses.

Many businesses choose to work with IT providers because they have expertisein a specific area of IT. For example, 38% of respondents in CompTIA’s surveysaid that they adopted managed services for “enhanced security/compliance.”This is likely due to the fact that ransomware attacks and security breaches areconstantly in the news, but it highlights the fact that MSPs have deep technicalknowledge in specific disciplines of IT. Also, the ongoing monitoring and softwaremanagement MSPs provide is particularly important, because keeping softwarepatched and up to date is essential to protect against security breaches.

Also, working with an IT provider allows businesses to offload tasks that are difficultand/or time consuming. That’s one of the reasons that managed data protectionservices are so popular today. Protecting company data through backup and restorehas long been a pain point for companies of all sizes; MSPs can ensure the SMBcompany data is fully protected from malicious or inadvertent actions, reducingbusiness risk by putting complex tasks in the hands of expert

MSPs can also initiate new projects and implement new technologies quickly.They have the resources and flexibility to get projects off the ground which mighttake weeks or months in-house. Implementing new technology with your existingenvironment can be complicated and time consuming. Because MSPs work witha wide variety of clients with different IT needs, they are uniquely equipped totake on complex IT projects. They also have vast experience troubleshooting theproducts they use—allowing them to resolve problems quickly.

Depending on the company, cost savings may also be a factor—especiallyamong smaller SMBs with straightforward IT needs. Monthly fees for managedservices will vary depending on services delivered. But, managed servicesare generally more cost effective than hiring in-house IT staff for smallerbusinesses. According to Kaseya’s 2018 MSP Benchmark Survey Results, 24% ofrespondents pay under $1,000 a month for managed services ($12,000 per year) -a fraction of the yearly salary of an IT professional in the U.S. An additional 28%said they pay between $1,001 and $2,500.

Larger companies with internal IT can also recognize cost savings from ITmanaged services. However, cost saving isn’t the primary driver for managedservices adoption among larger companies. According to CompTIA, larger SMBsare more likely to contract with MSPs for strategic reasons

A “Hybrid It” Department

IslandWood does just that, according to Julie Yunt, IT Manager. IslandWood contractswith Datto partner Interplay IT for a variety of services, including data protection andthey have a very close knit relationship. “Interplay has made an impact on employeeproductivity, time, and keeping clients happy. We think of Interplay as part of ourfamily,” she said.

The Seattle-based nonprofit organization is on a mission to inspire lifelongenvironmental and community stewardship. With over 150 employees, they serveover 10,000 students each year with its 250-acre outdoor learning center, overnightprogram, and other facilities throughout the Puget Sound region.

Five years ago, IslandWood was struggling with an outdated, overbuilt andmisaligned system, costing them time and money. They realized they needed a morestrategic approach to technology in order to continue delivering on their mission.This led them straight to Interplay

After doing the due-diligence necessary to understand what IslandWood needed,Interplay identified primary challenges and helped prioritize projects based onbudget. “Being a nonprofit, we have to be very aware of financial restrictions. Brianand his team listened and understood,” stated Julie Yunt, IslandWood IT Manager.“They helped us identify what we had to do, versus what we could wait on, andworked hand-in-hand with us to implement the recommendations.”

One crucial priority that Interplay identified immediately was data recovery. Whatwould happen to IslandWood’s mission-critical data in the case of a natural disasteror cyber attack? There was no plan in place, so Interplay worked with IslandWood toimplement Datto - a state-of-the-art device and service that backs up data both onpremise and in the cloud.

A few years after the strategic disaster recovery plan was implemented, theunthinkable happened: IslandWood was attacked by a ransomware virus.Thankfully, due to the strategic, forward-thinking that had been done a few yearsearlier, Interplay was able to quarantine the virus and have systems back up andrunning within hours. More importantly, their data was completely restored withina half-day’s time

Conclusion

There are a variety of reasons that SMBs need help from third-party IT firms. ITskill and expense tops the list for smaller businesses. Very small companies standto reduce IT costs while getting the IT expertise they need by partnering with aservice provider. Larger businesses typically work with IT providers to offload anumber of difficult or time-consuming tasks, allowing their internal IT staff tofocus on mission-critical activitie

The ongoing infrastructure monitoring that managed service providers delivercan help SMBs avoid IT issues, data loss and downtime. Small business IT teamsface budget and time constraints that make it difficult to deliver the level ofmonitoring an MSP can. This may be the most important benefit of working withan MSP, because IT downtime can completely derail a small business.

If you’ve never considered an IT managed service offering and are trying tomanage your own IT, it’s worth being aware of this cost effective way to have yourIT burden lifted. If you are working with an IT provider on a project basis, it is worthinvestigating whether they offer managed services as well. Or, if your current ITteam is running ragged, perhaps you can offload some difficult IT tasks. MSPs canhelp keep you focused, and keep you safe!

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