Managed services are increasing in popularity, as more companies outsource their computer network management.
“A properly structured managed services program can provide the benefits of reducing your IT costs and reducing your risks of hardware failure while standardizing IT management through streamlined efficiency, often all at lower costs than the company could manage by doing it in-house,” says Eric Folkman, manager of the Managed Services Division at Blue Technologies.
This has been especially advantageous for companies that either don’t have in-house IT talent or the capacity to manage their networks. Even with the improving economy, Folkman says many small and mid-sized businesses have not replaced the IT staff they once had on the payroll, so managed service providers (MSP) can fill that gap easily and cost effectively.
Smart Business spoke with Folkman about how a company can effectively use a MSP to cut IT costs and improve service.
What are managed service providers and how has cloud storage impacted this field?
In most cases, MSPs are value-added providers that remotely monitor and manage computer networks, which include servers, workstations, Internet usage, anti-virus, data backup and other infrastructure components. The remote access can also incorporate help desk functions as well. By providing expert assistance, MSPs deliver a significant amount of IT functionality at a lower cost.
Cloud computing already has had a dramatic impact on IT and is starting to have some impact on MSPs. Depending on what the business is looking for, MSPs can offer cloud storage or facilitate storage with a cloud service provider like Amazon or Google. Cloud storage also can be an important tool for disaster recovery. It’s a good place to store your backup files so at least you have data off-site.
How can business owners decide which service(s) to outsource?
Some companies instinctively know what services they need to keep, but many don’t; they may have a hunch that they could be doing something better but they don’t know anything beyond that.
The MSP will ask pointed, direct questions designed to ascertain what services are of value. Expert MSPs take the core services and modularize them to put them into different packages and separate tiers, as an effort to match the bulk of a client’s needs. Then it can be customized further to get the perfect fit, as necessary.
Some companies just want monitoring, with the MSP calling or texting if there’s a problem. However, most employers who are going down this path will say, ‘It would be nice to know if there’s a problem but we don’t have the skills to deal with it.’ Therefore, the MSP should not only identify the problem but also fix it, even though that company may have the capacity to do so. A business might continue to handle, on its own, an existing backup mechanism.
If a firm is not an IT firm but has to do IT functions, does it really make sense to devote employees to these tasks? If it’s a non-core competency, you should seriously look at outsourcing these non-core competencies as a way to reduce costs and let the experts handle things.
How should companies deal with pushback from their internal IT staff?
An IT person’s first thought might be, ‘Hey that’s my job, and if someone comes in to help me I’m not doing my job right.’ There is a degree of that, but managed service providers are not out to get anyone fired. They come to help and are hopefully viewed as a friend and resource to count on.
From an IT perspective, networking computer management is not that exciting. It’s one of those necessary evils, and very frequently the smaller, internal team doesn’t have the capacity to deal with computer management — doing the patching, the anti-virus and updates. In fact, for a lot of smaller companies, there may not be a dedicated IT resource at all. Sometimes the president, CFO or the controller manage all the technology in addition to his or her full-time job.
What are some best practices when moving into managed services?
Talk to whoever is providing IT support for your company and ask very direct questions related to the costs to maintain the workstations, software revisions, server status or network status, etc. Generally, a business owner will know if there are frequent outages or problems with the network or viruses, but the owner really needs to get answers from the IT people and get it with proof. For example, a report that shows the system is fully patched or one that shows the anti-virus is up to date.
Secondly, determine the cost of maintaining your equipment. Rough estimates are generally good enough, but factor in labor costs, including salary and benefits, technology costs, contract costs, etc. Then, compare these costs against what an MSP will charge you. Look at your written proof to see if you’re in good shape or if you need a more cost-effective expert.
Finally, execute a document with your MSP called a service level agreement. This agreement spells out, in full detail, exactly how things are going to go. It’s the responsibility of both parties to negotiate and fully understand the terms before they get started. Then you know the full extent of the services and how they will be delivered, because the last thing you want is a surprise when you need somebody.
Eric Folkman is manager of the Managed Services Division at Blue Technologies. Reach him at (216) 271-4800, ext. 2249, or efolkman@BTOhio.com.
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