Insights from Orion Group

Managed IT: Right for my Business? Part 1

This is part 1 of a 4 part series exploring the difference between a one, two or three man IT support model and a managed IT support contract. The author has over 30 years working as an IT leader with some of the best run companies in the world. He has worked both sides of the fence – as a company IT employee and for outsource providers. He’s seen successful engagements and failures. This experience informs this series.

First let me say that I’m a vocal advocate of managed IT for small business. When done right, managed IT is a far superior model to the traditional one, two or three man IT shop. While there is no ‘one size fits all’, in almost every case, the value per dollar of managed IT can’t be beat. That doesn’t mean that an internal IT team will necessarily cost less. In most cases, the funding is subpar in small man IT shops. That team is almost always relegated to ‘keeping the lights on.’ The capability to leverage IT as a competitive advantage is so far down the priority list that it is non-existent. Furthermore, little investment (or motivation), if any, is directed to improving operating performance. IT employees garner praise from their management team by being great ‘fire-fighters’ not strategic thinkers. Inexperienced business owners, without technology experience, propagate this relationship and typically think of managed IT as high cost.

To be sure we’re talking apples to apples, let’s define terms. An IT shop is the employee(s) you hire for the care and feeding of your computing environment. This environment includes:

  • desktops,
  • laptops,
  • servers,
  • network,
  • applications,
  • security,
  • data backup,
  • wireless,
  • mobile,
  • vendor management,
  • break/fix for all of this,
  • sometimes at multiple sites,
  • end user education and policy,
  • 7×24 support,
  • special support for VIPs,
  • technology review and recommendations,
  • patch management,
  • cyber forensics,
  • budget and contract management,
  • Application development, and a whole lot more.

Whew! When you think about it, you expect a lot from ‘your guy(s)’. With a managed IT contract, you bring an experienced team outfitted with the latest tools and technology to manage all this stuff. The team is usually deep in experience with a variety of skill sets at the appropriate price point to handle this broad range of responsibilities.

My intent in writing this series of blog articles is to compare and contrast qualities of the home grown IT with a managed IT contract. In Part 1, I’ll discuss cost, response, reliability, dependability and help desk. In following blogs, I’ll address topics such as standards, risk, security management, process and tools, to name a few.

So let’s start with the big elephant in the room – cost. I’m often told that managed IT is too costly. In particular, one man IT shops typically make this argument. They’re paying their one IT guy $50,000 a year, supplying them an office, equipment, health benefits, and possible other perks (car, training, vacation time, etc.). They are asking their guy to handle all things IT. If you only have a single IT guy, all admin security access, knowledge about special configurations, and another hundred different pieces of information is in one person’s head. I remember a client once was interested in letting their IT guy go. They hired my firm to first come in to document their network, access privileges and ensure no ‘back door’ was in place so that once they terminated, that person’s knowledge was documented and the network was secure. Based upon what we found, this firm was fortunate, indeed, to take these steps. Catastrophe could easily have struck without taking these precautions. Furthermore, if that IT guy had been ‘hit by a truck’, lack of admin access could easily have put that small business out of business.

With a managed IT contract, your managed IT vendor documents all admin access, unique configurations, and special information in a secure database and works with you to simplify your network so that any seasoned IT pro, given the appropriate access, can assume a key IT support role. The managed IT shop can’t hurt your business by ‘getting hit by a bus’, they protect your business continuity requirements through proven methods and processes. And you know what? They do this and much more for less than you’re paying for a full time employee.

Your managed IT partner has a qualified, experienced IT support staff. This team approach improves reliability, dependability and response that just cannot be provided by a small IT shop. There is no more vacation planning or coverage/on call responsibilities. No more sick time to dance around. The managed IT vendor assumes this responsibility based on your contract terms. And consider the cost to recruit a replacement. Don’t ever go there again. Don’t need weekend coverage? Don’t pay for it. Don’t want to pay for 3 weeks’ vacation? Not a problem. Want to close for a month over the holiday season? Exclude it in your contract. Even most businesses that don’t make a good investment in IT can save money and improve IT support by choosing a managed IT partner in place of the traditional IT shop approach.

Finally, the ability to record, track, report, and analyze break/fix and project based work is critical to improving and reducing the cost of IT support. Your managed IT vendor will have invested in easy to use, flexible help desk software and the processes required to maintain a record of your issues. They use this to ensure they are reacting to your requests based on the priority you define. This software helps ensure the managed IT vendor is meeting their contractual agreement with you regarding response, quality, and completeness. That software will record how and by whom your problem was addressed along with technical notes to help the next technician who might encounter similar problems. It also give the managed IT vendor a record of repeatable issues so that they can make recommendations on how to resolve these permanently. Share by the vendor with you, the list identifies, in detail, the billable activities so that you have a transparent invoice. Do you know what your small shop IT guys do in detail each month?

Tune into next months, Part 2, installment – Experience, Process, Tools, and Technology.

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