Managed Services Gain Traction in IT
YOUNGSTOWN, Ohio – In recent years, IT companies have begun to shift from the traditional “break-fix” model of business and toward being “managed service providers.” Instead of waiting for something to go wrong and then taking care of it, the companies increasingly are keeping tabs on clients’ systems and dealing with problems before they become problems.
“We can resolve, or even know about, probably 70% of problems before you do,” says Mark Robertson, president of Eagle Point Technology Solutions. “We had a client that had a problem at 10 o’clock Sunday night. And when they walked in the next morning, it was all working. Without that, you’d have to walk into the office, see it’s not working, call us and wait for us to come fix it.”
Managed services are often contract-based and fall into a few fairly standard categories. At the bottom are help-desk services where clients can get in touch with IT consultants to address any issues that arise. Moving up the chain are varying levels of involvement and monitoring. At the apex is the virtual chief information officer position.
Going beyond the services at lower levels – things like monitoring networks, applying patches and updates, ensuring everything runs smoothly – the VCIO position is an outsourced IT department.
“They use us an IT staff and IT planner,” says Jason Wurst, vice president of Tele-Solutions, Boardman. “It’d be incredibly expensive to hire as an internal service – from the salaries to everything that surrounds the employees, even the real estate to put them in – and we work closely with them to understand their business and plan for the future of their technology.”
Three years ago, Tele-Solutions, founded as a phone company, expanded into managed services as voice over internet protocol, or VoIP, phones began gaining popularity.
“Once it became an application on the network, it’s another computer on the desk. When we started having issues, a lot of times the voice issues were a symptom of the problem, not the problem itself,” Wurst explains.
IT consultants cite several reasons for clients outsourcing their CIOs. From a purely financial perspective, there’s the cost. Outsourcing IT services can be a fraction of hiring internally – Robertson estimates that it’s around a quarter of the cost – while avoiding the turnover of IT staff who leave for other positions.
Also factoring into the lower cost of using a managed services provider is that it gets away from the break-fix model, the basis of the IT sector for decades. In that model, companies get paid every time something breaks. As part of the agreement to bring in an IT company as MSP or VCIO, companies pay a flat rate.
“You’re being proactive and you’re not jumping every time a client has a problem. There’s panic and chaos that comes with break-fix on both sides,” says Robert Merva, president of Avrem Technologies. “By moving to managed services, you have more uptime and an easier day.”
Consultants also point to the difference in the knowledge base for having an entire, experienced company versus one employee.
“There’s a certain level of expertise that comes with hiring a specialist. This is my job, my livelihood, my life,” Merva says. “I can devote far more time and energy into knowing what I need to know than the average business owner or employee can.”
That knowledge proves useful when monitoring clients’ systems remotely. An MSP may have to manage scores of clients, each running several programs to operate its business. It’s a task Merva says is hard for humans to maintain – especially those new to the field. IT firms such as Avrem have invested heavily in automation processes.
And through specialized software, nearly all problems can be resolved remotely, save the biggest issues. At Micro Doctor IT in Warren, the common tools are programs such as ConnectWise and ITBoost, says David Daichendt, vice president of operations.
When a managed services provider lacks the expertise to solve a problem, he says, IT companies have the resources to connect with others who do, another advantage of outsourcing such responsibilities.
“If someone uses an [enterprise resource planning] program, we may not be experts on that,” he says. “But we can act as the liaison between the company and the ERP help desk to resolve problems. We track everything we do. There’s a record of every issue.”
As technology gets more complicated and becomes more intertwined with the daily operations of a business, IT consultants see MSPs and VCIOs becoming more and more common. Daichendt cites his recent work with Mill Creek MetroParks, for which Micro Doctor serves as VCIO. He found an alarm system that works alongside its current systems.
“For the small- to medium-sized business, I see this taking over,” Daichendt says. “In the IT environment today, with the security risks and things going on within IT, businessmen don’t have the knowledge to deal with it. And hiring someone to deal with it is cost-prohibitive.”
Pictured: Among the managed services Tele-Solutions Inc. offers is working as virtual chief information officer, says Vice President Jason Wurst.
Copyright 2019 The Business Journal, Youngstown, Ohio.
Published by The Business Journal, Youngstown, Ohio.
CLICK HERE to subscribe to our print edition and sign up to our free daily headlines.