Do IT Management Services Really Save Money?

IT management services are used extensively in SME segments to save money, increase annual profit margins, and improve business performance. Even the world’s largest multinational business conglomerates will often partner with IT management companies to create collaborative teams with their own in-house IT departments for similar benefits, albeit on a much larger scale.

So, the answer is yes, managed IT services can indeed save money for their clients. However, all that does not answer the question regarding exactly how they do this. To answer that question, we will be focusing on the exact financial advantages that external IT management brings to the table.

Savings in IT Hardware, Software and Maintenance Costs

If you wish to build and maintain a fully equipped in-house IT infrastructure, you must invest in the hardware first. On top of that, there is also the cost of maintaining the hardware and updating the parts as necessary to keep the IT hardware infrastructure relevant.

Then there’s the total subscription cost of essential IT software applications per year to consider. All that hardware would not be of any use whatsoever if your IT team does not have access to the software needed to utilize and secure it. Given that most if not all business IT SaaS providers have switched to a subscription model now, you will be paying for numerous, recurring expenses.

When you delegate your IT management responsibilities to an external company, you instantly get rid of all IT hardware and software expenses. You will only need to pay a fraction of your in-house IT maintenance costs to your managed IT services provider and they will take care of all your company’s IT requirements.

Savings in Permanent IT Personnel Salaries

IT experts are highly skilled professionals who do not work cheaply, especially if they are experienced. The cost of paying an IT management company that’s full of diversely experienced Information Technology experts is significantly lower than putting even a small IT department on your permanent payroll.

Larger businesses will often create a collaborative system between their own IT team and a partner IT management company. This helps them offset the cost of maintaining a full sized IT department on the permanent payroll. Smaller businesses can delegate the whole task to an external managed IT service provider to bring their annual IT expenses down.

Savings with Scalable Plans

Consider a scenario where you have a fully equipped IT department with competent IT experts to cater to all the business needs of the company. At some point in the future, you realize that downscaling the IT department has become essential because business is no longer doing as well as it did before.

At that point, you may need to let go of several of your employees, pay their respective severance packages, and garner bad reputation just to save the business from going under. You will also need to cancel multiple SaaS subscriptions and sell a portion of the IT department’s hardware. If you think all that is a hassle, consider the fact that you will again need to expand your IT department when business improves!

Managed IT services come with scalable plans that negate the problem altogether. You can downscale or upscale your plan as needed to best suit your business’s current needs, without any of the hassles that are associated with periodically downscaling and upscaling in-house IT departments.

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