What are Managed IT Services?
There's a lot of confusion out there about Managed Service Providers (MSPs), so lets get a few things out of the way up front. Those of you aware of what Managed Services are, scroll on down to the next section!
Managed services is the proactive monitoring, management, and support of a business.
Typically, Managed Services comes with:
1. A technology suite designed to fit specific customer types based on categories (Dental and Pharmaceutical would be considered different customer types, despite being in the same category of healthcare, for example)
2. An ongoing proactive maintenance and support model, which is unlike the reactive break-fix model
3. Longer term contracts, usually 12 months or more in length, paid monthly.
MSPs have different styles of implementing these components, when evaluating your IT provider be sure that their style fits for your business. It's useful to think of the MSP as a business partner and not just an IT guy or provider.
Why use Managed Services instead of on-demand (break-fix) IT support?
IT and business have a different relationship than they used to. In years gone by small and medium businesses used technology to supplement their existing products and services. IT function failure was an annoyance decades ago to be sure, but businesses could continue to serve customers effectively without IT. Today, almost all businesses rely, price, and model their business with the assumption that their Servers, Computers, Email, etc are functioning perfectly.
This may sound familiar. An employee walks into your business early to open, they can't get on their computer, phones, wifi, or print documents. The non-technical employee does their best to fix the problem over the course of hours or days with the help of another worker, only to give up and call their massage therapist's best friend's cousin's daughter's long lost twin who "knows computers". This new IT guy solves your problem, but in the process you get a huge bill for that single fix. This leads to the following business outcomes:
Most break-fix IT support starts off this way. Lets use a dentist office as an example. Systems go down, dental hygienist does his best rainman impression, but eventually the odd distantly known acquaintance shows up hours, days, or weeks later and fixes the problem temporarily. Nobody can work effectively for the period of downtime. After the break-fix IT support shows up (typically a single person entity) and saves the day, a new arrangement begins; Every time this dentist office has a problem they call the same guy and VIOLA! A new company is formed.
This seems all well and good, however while the problem was solved in the short term, the negative aspects of a relationship like this brood beneath the surface. Speaking of relationships...
Motivation and relationships in a break-fix model
There are a few common break-fix IT support types that emerge from a relationship like this. We've detailed a few below to illustrate
The IT Tyrant
This is a very unfortunate but all too common occurrence. That new break-fix person who was called to help solve the problem uses that initial trust and access to control the customer. Over time they change and control passwords, monitor the employee's activities (with or without their knowledge) reading emails and messages, recording phone calls, personal information, and swipes passwords. Worse yet, this type of "support" often comes with invoices via extortion. You'll get a $25,000 bill for a piece of software that you could buy on your own for $10,000. The tyrant gets away with this by saying "If you do not pay my rate for that software, I won't support it." You might be thinking you'd just tell this person off and acquire support from the software company, which is the right response. But the tyrant has locked down access to your entire environment. Even if you could get the software company to support you, they can't do it without access. This is an absolute nightmare.
The Max Netflow Solution:
Fortunately a good managed service provider can perform password recovery, hardware replacement, and cut off the tyrant's access to your IT systems. Any decent Managed Service Provider will be able to supply any future hardware, software, and licensing for a lower rate, and customer privacy is built right into the software we use. We don't want to watch your personal information in the form of data, but due to the processes and programs we use, we couldn't pry if we wanted to.
There's some overlap here with the tyrant so we'll keep this brief. Essentially the extortionist will hold your systems hostage with billing. Typically they come in for a very low price. But as time goes on the extortionist makes profits by forcing high premiums on services that you don't want, don't need, and don't understand. That last part is essential. They keep you in the dark while claiming to be your hero.
The Max Netflow Solution:
Our primary objective is to keep your business up and running at a sustainable rate. The entire partnership is different. An MSP like ours does not stay in business or keep customers if they can't keep the systems up and running with clear and concise billing and projects.
The Fire Starter
You could probably tell by the title, but this type of support involves causing problems or leaving things half-fixed to come back and fix it later. The Fire Starter is always fixing problems that you're not even sure you had, but you are sure you had to pay for them. It's hard to blame the Fire Starter, after all their entire business revolves around customers having serious IT problems which only the fire starter understands. This is the core of the problem with break-fix support. It's a slimy trick as old as time, but when you incentivize payment for problems, you'd better plan on having a lot more problems.
The Max Netflow Solution:
Managed Service Providers do not want their customers to have problems, and we're no exception. The more resilient the customer's systems, the better the MSP does from a business perspective. This means the MSP will provide ongoing maintenance, monitoring, and regular meetings to ensure objectives are being met. MSP contracts are built on mutually beneficial relationships. In fact, at Max Netflow we screen our customers and if we don't think it's a good mutual fit, we wont offer services.
An unfortunate IT stereotype that rings true for some, The Hermit. You could also call this person the IT Grim Reaper. They don't want to hear from you, and you definitely don't want to hear from them. Unpleasant to talk to and difficult to pull in for support, you'll only see this person when there's a problem. Some may even sell you on knowing this fact. "Pay me so you never have to see me again." Compelling sell... but clearly not a partnership
The Max Netflow Solution:
Regular meetings with our customers to ensure standards are being exceeded and that new business objectives are being enabled and improved by technology. We even smile!
This one is quite different from our previous four. The Hero IT support involves one person trying to do everything. They answer all your calls, they are highly responsive when an issue occurs, they're not actively causing problems, and heck they're even friendly. So what's the problem? The problem is this is unsustainable for both parties involved. The Hero often has a high level of expertise, however in today's IT world technology becomes exponentially more complicated every few months!! This means even if The Hero dedicates 80 hours a week and every point of their IQ into learning about the IT world, they can't keep up. This shows up as inefficiencies in several areas such as slower resolution times, outdated equipment and practices, weak cyber-security, increased systems failures, and sloppy business processes, all from being spread too thin. In the same way that a Dentist shouldn't fill in for Chiropractors and Heart Surgeons, a desktop IT guy should not design your Network and Servers.
The Max Netflow solution:
Use our livechat and phone support options to get help in 12 seconds or less for high responsiveness, and leverage a network with hundreds of engineers in several timezones and disciplines, using specific resources for specific jobs. Cloud architects for cloud engineering, Systems architects for servers, and Network Architects for networks.
A Financial Case For Managed Services
Alright so we know so far the quality of life improvement and business purposes for Managed Services Vs Break-Fix. So what about the finances? The remainder of this section will use industry averages of Small and Medium Dental Offices to compare. At the enterprise level cost savings become incredibly effective, but the math gets more complicated. We're using dentists to stay consistent. A bit of warning there's quite a lot of math behind the scenes here, we will only be including the relevant parts to illustrate.
Let's get into the averages for our SMB Dentist's office, we'll use $1,000,000 in revenue for our calculations, and a dental hygienist and a dentist as the in-house personnel trying to solve the IT issue before calling break-fix in San Francisco.
Average downtime (loss of system usage) hours per year: 120
Average hours lost rescheduling patients: 12
Average payroll as a percentage relative to revenue: 26%
Average Dental Hygienist Wage: $45/hr
Dentist Adjusted Wage: $100/hr
Average hours spent by dental firm per year solving IT issues: 240
Average spend per year on breakfix: $10,000
$45,000 lost in wages to internal staff due to hours of downtime per year
$34,800 lost in time spent by the Hygienist and Dentist
$10,000 spent on breakfix putting bandaids on the system
$4,500 lost to rescheduling patients, assuming all patients return
Breakfix losses at $94,300. Now lets look at the same situation from a Managed Services perspective. We will only be adding the data that changes from above. I must add that these again are normal costs and do not necessarily reflect Max Netflow prices.
Average Downtime hours per year: 15
Average hours lost rescheduling patients: 1
Average hours spent per year solving issues: 0
Average spend per year on Managed Services: $35,000
Managed Services expenses at $41,000
$5,625 lost in wages to internal staff due to hours of downtime per year
$0 lost by the Hygienist and Dentist solving IT problems
$35,000 invested in your business' technology
$375 lost to rescheduling patients
A $53,300 improvement by using Managed Services over break-fix for a small to medium dental office.
Larger organizations see numbers that can exceed millions, and typically eclipsed six figures.
We should mention that this cost savings does not include the peace of mind having your systems actively monitored and maintained, as well as the protection from Cyber Security threats. If you are in fact a healthcare professional, and you want to lose some sleep, you can calculate each patient file of an active patient at around $1,000, and inactive patients around $150. This is the crux of ransomware and why it targets businesses regardless of size. Those files are valuable.
"But Will, my business is nothing like what you described and we pay less/have no IT problems/already have a provider/have no budget/etc." Fair enough. As you can see above, we put a premium on time and we're putting our money where our mouth is. We're currently offering complimentary IT evaluations along with a more in-depth cost analysis than what was shown above. If you have a system or provider that's currently working for you and we can't add value, no arguments, no hard sell, but you can be confident in your current solution.
For any inquiries use the following contact information:
Sales email: Sales@maxnetflow.com
My email: William@maxnetflow.com
Phone number: 415-432-8989