Technology is more than just a tool—it’s the backbone of modern business operations. Small and medium-sized businesses (SMBs) face a unique IT infrastructure challenge. With limited resources, expertise, and budgets, handling IT in-house can quickly become overwhelming. This is where managed IT services make a difference. By outsourcing IT management to a Managed Service Provider (MSP), SMBs can streamline operations, improve productivity, and fortify their security.
However, many businesses consider outsourcing these services a bit too expensive for their liking. Make no mistake, however, as managed IT services can have an incredible ROI (return on investment) when used correctly. All you need to know is how to properly evaluate it.
Understanding Managed IT Services
Before we get into the details of the ROI of managed IT services, it can be useful to elaborate on what exactly they entail. These are outsourced services that range from network monitoring and cybersecurity to cloud computing, data backup, IT support, and infrastructure management. Rather than needing to use (or trying to hire) an in-house IT team, managed IT services allow SMBs can tap into an external team of experts, all for a predictable monthly fee. This allows businesses to shift their focus away from IT complexities and toward their primary goals, ensuring a more seamless and efficient workflow.
The Key ROI Benefits of Managed IT Services
Cost Savings and Predictable IT Budgeting
One of the most immediate and tangible benefits of managed IT services is cost efficiency. Smaller businesses (particularly startups) often have to stretch their budgets, making unpredictable IT expenses a major challenge. With an MSP, businesses gain a structured, fixed-cost model that removes the financial guesswork.
For example, instead of dealing with unexpected repair costs or hefty investments in new infrastructure, SMBs can count on a stable, manageable expense. Moreover, by outsourcing IT, businesses can avoid costly downtime caused by system failures, reduce capital expenditures on IT hardware, and eliminate the need to hire full-time IT personnel. Research by IBM found that large businesses lose roughly $5,600 per minute of downtime. Of course, this number only really applies to large companies, but it can be a headache-inducing figure nonetheless.
Increased Productivity and Efficiency
Technology should empower businesses, not slow them down. However, unreliable IT systems often lead to frustrating issues, lost revenue, and reduced employee productivity. With managed IT services, businesses benefit from proactive IT infrastructure designs that help prevent major issues. This is particularly impacted by a service’s monitoring and support structure.
Through 24/7 monitoring, an outsourced IT service can detect and resolve issues in record time, which minimizes disruptions and possible downtime. Since the teams typically work with more than one company at a time, their combined experience allows them to diagnose most problems that businesses can encounter. Problems can be detected and resolved swiftly, minimizing operational disruptions.
Faster response times for technical problems also lead to fewer disruptions, directly improving productivity. Furthermore, optimized IT interfaces and infrastructure ensure employees work seamlessly without delays caused by outdated systems or network failures.
Enhanced Cybersecurity and Risk Mitigation
Cybersecurity is often mentioned as a buzzword, and you might be mistaken in believing that only large corporations need to account for it. SMBs are increasingly targeted by cybercriminals, often because they lack the resources for robust security measures. Managed IT services can bridge this gap with cutting-edge security protocols, such as firewalls, antivirus solutions, and multi-factor authentication.
Regular security updates and compliance checks ensure SMBs stay ahead of potential risks. Additionally, comprehensive disaster recovery and data backup solutions provide an extra layer of protection, ensuring business continuity even in the face of cyber incidents. According to IBM’s Cost of a Data Breach Report, SMBs without managed cybersecurity solutions face an average loss of around $5 million per breach, which only emphasizes the need for preventative measures. Couple this with the fact that around a third of businesses still regularly pay the ransom of a phishing scam, and you can see how a robust security system that is up-to-date can actually save you money in the long run.
Access to Advanced Technology and Expertise
Let’s face it, the tech world evolves and grows far too quickly to keep constant track of. New technologies such as AI have popped up only a few years ago and yet, they have completely overhauled multiple industries. Considering that half of small businesses don’t make it past their first few formative years, it seems logical that early adopters of breakthrough technologies have a much easier time not only surviving but thriving in this fast-paced environment.
And that’s why managed IT services can provide an immediate advantage. By granting businesses access to the latest innovations, without requiring costly upfront investments, MSPs offer expert advice to align a business’ mission with technology for maximum efficiency.
Scalability and Business Growth
When your business grows, its IT needs naturally expand. However, purpose-built on-premise solutions are often incapable of handling the increased demands. Outsourced IT systems can offer scalable solutions that adapt to changing business requirements. Whether you need to add new users, integrate new software, or expand the infrastructure, MSPs ensure businesses can scale efficiently without experiencing technical bottlenecks.
Furthermore, remote work environments have practically become the norm in recent years. While they improve productivity overall, businesses need to take care to create reliable network infrastructures to support remote work while protecting their data. With a robust intranet network, you can enable seamless operations for hybrid teams.
Regulatory Compliance and Risk Management
Regulatory compliance is an area where many SMBs struggle. Industries such as healthcare, finance, and legal services must adhere to strict standards like HIPAA, GDPR, and PCI DSS. Failing to comply here can lead to hefty fines, legal repercussions, and a damaged reputation, which can ultimately close a business altogether. You can alleviate these concerns by ensuring businesses meet compliance requirements through regular audits, security protocols, and best practices. By outsourcing this aspect of the business, the C-suite can confidently focus on its operations without worrying about falling short of regulatory obligations.
Improved Customer Experience
A reliable IT infrastructure directly leads to positive customer satisfaction. Considering the fast pace of today’s world, customers and clients expect to see visible results practically immediately, especially when dealing with time-sensitive information. It’s up to the business to provide a seamless process for interacting with customers on every step of onboarding, sales, and project delivery. This can be done through seamless online transactions, responsive customer support, or secure data handling.
A report by Zippia (and echoed by Microsoft) suggests up to 91% of customers would stop doing business with a company after a single poor customer service experience. This means poor infrastructure and customer support can directly translate into lost sales.
Calculating the ROI of Managed IT Services
Considering the widespread effects of IT services on possible monetary gain or loss, it can be challenging to create an actual formula for calculating the ROI. You’ll likely need an accountant and a skilled manager to put everything on paper (or screen) and meticulously record your transactions and, more importantly, how they connect to the IT infrastructure or the provided services.
Measuring the ROI of managed IT services requires a straightforward calculation:
ROI=(FinancialGains−ITCosts)/ITCosts (x 100 for percentages)
For instance, imagine a business that paid $50,000 annually in IT downtime before switching to an MSP. After investing $30,000 per year in managed IT services, the company significantly reduces downtime and security risks, generating efficiency and security gains worth $80,000 per year.
ROI=(80,000−30,000)/30,000×100=166.67%
In the example, for every dollar spent on managed IT services, the business saw a return of $1.67. This calculation highlights the financial viability of outsourcing IT management and its long-term cost-effectiveness. However, bear in mind that this is a greatly simplified formula, and your exact calculation can vary significantly.
How to Get the Most ROI for Your Business?
It’s quite clear that managed IT services can be a great boon to any company. However, just getting the first package deal you find online is likely going to cost you more in the long run than you realize. If you’re not careful, you might overpay for services you don’t need, or not get the exact scaling solution that suits your business plan.
To get the best results, you should consult a professional managed service provider like Metro Sales. With an expert team that specializes in managed IT support, we can help set you up with an IT infrastructure, including state-of-the-art document management hardware and software, and make your job a breeze. So, if your Burnsville, Twin Cities, Fargo, Duluth, or St. Cloud company needs to get a leg up on the competition, contact Metro Sales today.