How Much Should You Be Spending on Managed IT Services?

How Much Should You Be Spending on Managed IT Services?

The question of how much to budget for managed IT services is a very common one for many businesses looking to outsource their IT to a Managed Services Provider, or MSP. The answer may not be a simple figure though, as there are many attributing factors to consider, some of which we will explore in this article. 


Why outsource your IT to a MSP?

Many businesses choose to outsource their ongoing IT tasks to an external IT supplier, like an MSP for many different reasons. MSPs can be useful for ensuring complete coverage of IT duties and additionally, can provide specialty knowledge or expertise that may not otherwise be available. Think of it as instead of hiring just one IT specialist within your business, you can instead hire a whole team of IT experts, each with their own skills and specialities. 

Even companies with existing IT employers can benefit from externally outsourcing to an MSP; by allocating ongoing IT tasks to your MSP, your internal IT team now has the time and resources to instead focus on value-adding and revenue-generating projects. Your MSP can also provide additional training and guidance to help improve your business’s IT practices.

Additionally, managed IT service providers are often able to perform integral system updates and maintenance out of business hours, which means fewer disruptions for your business and less overtime for your internal IT team. 

How much should managed IT services cost?

This is a hard question to answer generally, as the cost of your managed IT services will vary depending on your IT support provider and the amount of IT support that your business requires. Every business is different and so the level of IT support will vary depending on your business size, industry, requirements and future plans.

As a general rule of thumb according to research from Deloitte, companies will budget between roughly three and a half percent of their total business revenue to their IT spend, averaged out across all industries. While it may seem a large amount of money to spend, it is important to remember that spending money on IT is an investment into your business, helping to future-proof your organisation and enabling it to run efficiently.  After all, would you rather make a saving, or take comfort that your business’s IT needs are sorted?

Managed IT pricing structures

There are three common pricing structures that can affect what your IT spend looks like.

  • Per hour.
    Under this pricing structure your business is charged at an hourly rate for your managed IT needs. This is one standard rate, regardless of the service, urgency, or time taken. This pricing model is popular for smaller businesses with smaller budgets who may require less IT support. 
  • Per project.
    You will be charged at a set, pre-agreed rate per project. This structure focuses more on the outcome of the project itself, rather than the time it takes. This method is popular for businesses who require additional support for IT-focused projects within their business. This option is also commonly combined with other pricing structures to cover additional IT needs.
  • Per month.
    This pricing structure covers your full-time managed IT service and is the most popular choice as it enables businesses to plan their budgets more easily.

The pricing structures should be pre-agreed between your MSP and your business and should be clearly outlined in your managed services contract, or service level agreement (SLA).

What does managed IT services cover?

While your MSP will be able to advise the right services required by business, some of the more popular services that MSPs provide include:

  • General day-to-day IT support
  • Network management 
  • On-site and remote support
  • Disaster recovery
  • Cloud migration
  • Data back-up and recovery solutions
  • Cyber security

According to a recent survey by American cybersecurity and data backup company Datto, Cloud-based infrastructure design and management was the most popular service performed by MSPs around the world, followed by management of office productivity software services (such as Microsoft 365) and business continuity and disaster recovery.

Invest in your IT with the MSP experts, GPK Group

If your company is looking to invest in IT services, Brisbane, Adelaide, Perth and Melbourne businesses choose GPK Group to help their businesses succeed. 

Whether you are after Managed IT services Brisbane, retail technology solutions, or advice on migrating to cloud technology, GPK Group offer Australian businesses a comprehensive and streamlined IT solution that takes care of your business’ IT needs from end to end. Claim your Free IT Network Audit or call us today on 1300 000 475 to speak to one of our IT professionals about your business’s IT requirements.

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