Managed IT Services ROI: How Long Does It Take to Start Saving Money?

by | Feb 8, 2022 | IT Operations

ROI on going with an MSP

Are you tired of throwing piles of money on your in-house IT support and feeling like you’re not getting much in return? Fortunately, the remedy is a trend that’s quickly increasing for small businesses: managed IT services.

Managed Service Providers, or MSPs for short, deliver IT services to clients under a subscription service model bound by a contractual, service-level agreement. In other words, they’re like an outsourced IT department that you pay for in one monthly lump sum. (Don’t worry, this usually works out to be far less than the cost of an actual IT department.) MSPs are especially popular among small businesses because they allow them to operate without employing a single IT professional and meeting their growing salary expectations.

But how long does it take to start saving money after switching to an MSP? To answer this question, start at evaluating the intricacies of calculating managed IT services return on investment (ROI).

Calculating Managed IT Services ROI

ROI is typically calculated by dividing the net return value of an investment with the total cost of that investment before multiplying it by 100 to get the percentage value.

Since one of the biggest benefits of managed IT services is the lack of an upfront investment, the total cost of investment amounts only to the amount of money spent on an MSP over a certain period of time. The net return value is the amount of money saved over the same period of time.

Do you already see the inherent problem? The resulting percentage value depends largely on the period of time over which it is calculated.

It’s rare, but it’s possible for a business to go for weeks or even months without requiring much in terms of IT support. Then (as recent IT news has shown) inevitably, a cybersecurity incident resulting in a data breach happens and makes a huge dent in the business’ IT budget when they have no choice but to rely on a break-fix IT support model (charging by the hour) with a standard IT support company.

The same cybersecurity breach, however, wouldn’t have additional financial stress if the affected business were receiving IT services from an MSP under a subscription service model.

One of the best things about MSPs is that they typically offer a broad range of different services, like remote and onsite support, cybersecurity, equipment rental, business telephone & VoIP phone systems, strategic planning, and others. Each of these services provides specific direct and indirect financial benefits and usually companies can scale them up or down as their needs change.

Experienced MSPs partner with their clients to maximize their ROI and increase their overall value, creating mutually beneficial relationships. In other words, managed IT services ROI is also strongly influenced by the provider’s ability to accurately meet the needs of its clients. So choosing a good one is vital to your bottom line.

Can We Look at Some Numbers, Please?

You can’t calculate managed IT services ROI for your business without relying on an MSP for at least several months and comparing the among of money spent on it with the typical cost of IT for your business. But you can analyze existing research on the subject.

One IBM sponsored IDC white paper on the business value of managed services uncovered that companies which transitioned to IBM services from managing their IT assets in-house were able to recoup their initial investment in just 5.5 months, with a 3-year ROI of 224%.

The same companies saw a reduction in unplanned downtime from server and network failures of 88% and a 24% reduction in IT infrastructure cost.

The excellent ROI of managed IT services stems from the wide variety of benefits that can be unlocked by outsourcing IT tasks to a team of experts with combined decades of experience, and they include:

  • Access to best-in-class technologies: MSPs leverage economies of scale to provide best-in-class technologies at prices that even businesses with limited IT budgets can afford.
  • Reduced cybersecurity risk: Today the world of cybersecurity is complex and difficult to navigate, and the same can be said about data protection and privacy regulations. MSPs specialize in the changes and staying ahead of them. They can offer a level of protection small businesses would never be able to achieve on their own.
  • Around-the-clock support: IT issues can and do happen anytime, which is why MSPs typically provide 24/7/365 monitoring and reaction to help their clients reduce downtime as much as possible. It’s unlikely a small business’s IT staff would be willing to provide the same.
  • Improved scalability: The last thing you want is for your company’s ability to grow to be held back by your lack of IT infrastructure and your ability to maintain it. MSPs can unlock growth potential by providing the support and services you need to grow, when you need them.
  • Better focus on core business activities: When you let someone else take care of your IT, focusing on what you do best and accomplishing important objectives suddenly becomes easier.

Pick the Right MSP and Start Saving Money

The average ROI that you can get when you move from in-house IT to managed IT services makes the effort well worth it. And the right MSP can make the transition almost effortless.

At Help Desk Cavalry, we have helped hundreds of businesses like yours cut down their IT expenses while providing all the power and security of a full-scale IT department for less than a single salary. Contact us and let us help your business become another managed IT services success story!