Do Managed Services Benefit Small Businesses?

Posted by Sean Kline

 

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When I speak with other business owners, I field many variations of the question,"Would managed services benefit my company?"

As with most things, the answer is: It depends. Although we have an inherent desire for simple black-and-white answers, the reality is that some companies benefit from managed IT services and some do not. Let's take a closer look.

I find that small businesses fall into one of three categories when it comes to technology:

1. Technology Does Not Really Matter

Companies in this group have IT pain points, but they are not interested in investing more or making changes to eliminate that pain. 

I recently met with the president of a small manufacturing company, and she described all sorts of issues with her server environment, email reliability, and vendors pointing their fingers at one another.  When I dug a little deeper, I learned that the email issues were affecting the company's sales and profitability. 

As we talked, it became clear to me that they have a reactive approach to information technology (IT) process, and this is the root cause of their issues. 

In their case, it would have been a fairly easy fix and would have only cost $250 more per month than what they were already paying. To them, that was not an investment they were willing to make. They chose to leave things as they were. 

Why?  They view vendor bills as IT costs. They're currently spending $500 per month, but when you factor in the cost caused by their issues, their real cost is closer to $1,000 per month.

What kind of business owner decides it's not worth spending a little more to solve a real and ongoing problem? One who does not value technology.  This is not necessarily the wrong choice, but it is important to understand what the best strategy is for each business. 

2. IT Pain is not Obvious at the Executive Level

This group is in the toughest spot. They experience pain from their technology process, but they do not always know it. In some cases, the pain is there, but it is really more of a nuisance.

Let's use a medical analogy. One of my relatives is dying due to Chronic Obstructive Pulmonary Disease (COPD).  She smoked for 60 years and as recently as a month ago. Yesterday, she said, "This is all my fault." Why did she continue to smoke?  She knew it was bad for her, but she did not feel enough pain to overcome her addiction. Furthermore, she did not truly understand the entire impact of her lifestyle on her health. 

While this is an extreme comparison, it is very similar to some small businesses. When we use our process to onboard a new client, we typically find 20 technology issues. Not all of these are mission critical, so we first drill down to determine which ones pose the biggest business risk or offer the most opportunity. 

It takes a wide variety of skills and sufficient time and process to do this.  Most small businesses are simply not equipped to do it themselves, but unless they have painful symptoms, they will not take action.

3. Technology is Mission Critical

In this category, the company is absolutely dependent on technology. One of my clients described it this way: If their IT infrastructure is down during their busy season, they lose 70 customers per hour.

This is clearly a company that relies on technology.  Not only do they lose sales if their technology fails or doesn't perform well, all of their business areas are affected – from customer service and marketing to finance and the executive team. 

In their case, managed IT services provide tremendous benefits.  Before working with us, they had an IT service provider, but not a true managed services provider by my definition.  Since moving to Turbotek, their employees are significantly more productive because we take a proactive, rather than a reactive approach. In their case, it has led to a dramatic decrease in the number of trouble tickets each month. 

How Important is Technology in Your Business?

In conclusion, managed services or not, it's important to assess the importance of technology in your small business.

There's a spectrum of important, and to find out where you are, the first step is honestly understanding the reality of your situation. How truly important is IT to your business? Most business owners minimize this.  IT is typically something they want nothing to do with – they delegate it and just want it to work. 

The reality is that for many businesses, it is either mission critical or has a significant impact on productivity, risk, return on capital investment among other areas. Imagine if the business owner took the same approach with sales - delegating and then not managing the performance. As small business owners, we do not have that luxury to delegate and forget about it.

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Key Takeaways:

  • Technology creates a huge impact on businesses.
  • Sometimes it's hard to tell how much your business is suffering because of poor IT infrastructure and systems.
  • Utilizing IT resources properly can save time and money, while improving employee productivity.


Topics: Small Business IT Resources, small business it support, Managed IT Services, small business solutions, IT Managed Services, Utilizing Technology in Business, small business IT infrastructure, IT best practices, IT Strategy