I conducted a series of interviews with ITS CEO Tom Andrulis to find out more about managed cloud storage services and associated costs. I got a great article out of that, but it also got me thinking. Why do managed IT services cost so much, and what is the value in them?
I had only the foggiest idea of IT service management; certainly not enough to make a good argument for or against investing in it. As it turns out, resolving the cost vs value issue comes down to answering three questions.
Does your business rely on technology?
As a content writer, I rely pretty heavily on the Internet and my laptop to get work done. I get as mad as a hornet when my Internet service slows down to a crawl or cuts off completely, or when my laptop starts giving off that weird whirring sound when I use it for too long.
However, would I say my business would fail if my Internet conks out? No, I could always go to my local coffee shop and blast angry emails to my ISP from there until they come down and fix it, gosh darn it! If my laptop refuses to turn on, I can always beg, borrow, or steal one until I get it fixed. I have options and life will go on.
That is unfortunately not true for a manufacturing company that relies on its machines to work smoothly at all times. If their machines break down because of poor maintenance, can they go to their local coffee shop and use their machines? No, production would come to a standstill, and probably cost them hundreds of thousands of dollars if not millions in lost production.
Another way to think about the difference between me and a manufacturing company is to think in terms of physical activity. I have my fair share of exercise, but just enough to make my Fitbit marginally useful. Compare that to the wear and tear on the body of an elite athlete, and you can see why professional teams pay $200,000 on average for a team doctor to make sure their players are in top condition. They cannot afford to take the chance that their athletes are “probably okay.”
Any business that relies on any type of technology cannot afford to skimp on maintenance services. For that same reason, companies that rely on information technology cannot afford to skimp on IT management services.
Is your business dependent on your data security?
Sir Arthur Conan Doyle once said, “It is a capital mistake to theorize before one has data.” It was true then, and it is also true now. Data helps you make the decisions, and without it, you are pretty much stuck.
That said, there are all kinds of data out there that have no business value whatsoever. Did I become richer knowing that Coca-Cola was originally green, or that this widely-circulated piece of trivia is false? No. Is it filling up headspace now? Unfortunately, yes.
Data only becomes important when it makes it impossible to run your business without it, and you can only use data you can access. A great example of this is the story of the Beth Israel Deaconess health-care IT disaster in 2002, where an outdated system kept crashing and preventing medical personnel from accessing patient records. The data was there, but they couldn’t get to it.
There is an equally bad scenario as data loss. What if someone else gets access to it?
Data breaches are the new horror story franchise because most people have entrusted their most confidential information to banks, hospitals, government agencies, credit bureaus, and retailers. So much so that hacked accounts are now nightmare fuel.
As a result, businesses that primarily deal in data such as banks and online stores have to be in a position to guarantee the safety and security of their customer data. The mere whiff of an unsecured site or system is enough to scare away most people and businesses.
Data loss or breach can also leave your business open to criminal or civil liability if it results in significant losses to your customers. Even if customer data is not the end-all and be-all of your business, if you ask for it, you have a responsibility to make sure you keep it safe. You can do that by having your system updated and monitored for vulnerabilities by a managed IT services provider.
What is the value of my data and technology for my business?
This is where the dollar and cents of the cost vs value question come into play because it boils down to return on investment or ROI. When I buy a newer, faster laptop or upgrade my Internet package for content writing, I am calculating the cost of that investment against the returns, i.e. I can work faster so I get more projects done at X dollars each.
The same principle applies when determining the ROI of managed IT services. What is the value of your data and a viable IT system, and how does it compare to the cost of an IT management contract?
Tom put it very bluntly, “If the value of your data is at $100 or so a day, then you don’t need us to manage your system for you. The ROI makes no sense. However, if a failure in your IT infrastructure or data will cost you $5,000 a day, then not having an IT management contract that will cost you around $5,000 a month is just a bad business decision.”
Where the buck stops
No one can convince you to put a managed IT services contract in place if you don’t believe it is worth the cost. You have to decide that it is. That’s is where the buck stops.
ITS conducts a free network check upon request, and that can help you in making a decision either way for your business. If you know that your data and IT infrastructure is critical to success, then investing in IT managed services is actually about investing in your business.