Moving from a break/fix service to a managed service with a monthly fixed fee can be a big consideration to make. Here's 5 ways it can help.
Sep 24, 2021
What is fixed-fee IT and how does it help SMBs:
Transparent pricing and no hidden or unexpected fees
Allows decision makers to let the MSP get on with IT while they get on with their business
Helps avoid the budget drain cycle that the break/fix model propagates
Long-term tech budgeting with a partner whose interest it is to ensure your success
Helps establish a program for cybersecurity practices and technology to keep you safe
What is a fixed-fee IT contract? Fixed-fee IT services can be the perfect way to outsource while controlling IT expenditures.
There’s no doubt that, in our increasingly digital world, technology plays a key role in the success—or failure—of every company.
Whether it’s for communication and collaboration, cybersecurity, infrastructure, or marketing, the tech environment is constantly in flux and the implementation of new technologies is costly and time-consuming.
Because of this, staying on top of your organization’s IT needs is challenging but essential, and this is especially true for small- and medium-sized businesses (SMBs) that don’t have the kind of budget it takes to sustain an in-house IT team.
In today’s blog, we’re going to take a look at five key reasons businesses are switching to the fixed-fee managed IT model instead of going fully in-house or using the traditional break-fix model for services.
Fixed-fee vs. Break-fix
Break-fix is what most businesses are familiar with—a business calls a service provider when they have an issue and they charge typically on an hourly basis while the problem is being fixed.
With a fixed-fee model, all expenses (with the exception of things like an annual increase) are built into the service agreement, with the obligations of the service provider given in writing.
In other words, expectations—such as how quickly someone will service you, are understood to both parties.
When working with a fixed-fee IT contract, businesses have a clear understanding of what they’re paying, and unlike with the break-fix model, won’t find themselves in a position where they suddenly incur a massive service bill as the result of IT maintenance.
5 Reasons SMBs Are Switching to Fixed-Fee IT
Here are five solid reasons switching to a fixed-fee IT plan can improve workflow, increase productivity, and maintain your budget effectively.
1. Transparent Pricing
IT budgets are on the rise as technology continues to be a competitive differentiator and thus a priority for businesses.
And, with technologies being adopted, removed, scaled, or created, these budgets can be difficult to predict.
Furthermore, the new trend toward digital transformation is affecting all sectors, making staying abreast of technological changes a must-do for any business wanting a competitive edge.
A monthly fixed-fee IT plan offers a transparent pricing structure that gives decision-makers and executives a clear understanding of how much their IT support will impact the budget—with no surprises.
As a result of the COVID pandemic, around two-thirds (62%) of businesses said they would tighten their budgets, meaning SMBs are more conscious of their IT expenditures than ever.
2021 IT budget research report: COVID-19’s impact on projects and priorities
2. Allows Focus on Business Goals
For a lot of SMBs, IT is an after-thought and often bears the unfortunate identity of being a money sink more than anything else.
IT is primarily a support function, but in recent years it has become for many a department that has grown substantially in terms of what its remit is and yet companies find themselves lacking the expertise of manpower to cope.
SMBs are spending nearly 1/10th of their IT budgets on server technology. An MSP will help you achieve your upgrades by guiding your strategy depending on your infrastructure needs.
The 2023 State of IT, SWZD
That’s why the use of Managed Services Providers (MSP) to handle IT has increased so much in the last five years—it allows companies to focus their resources more clearly on crucial business objectives.
In turn, this means businesses can get more value from in-house IT staff, who will spend less time putting out fires in the IT department and have more time to focus on activities that will benefit critical operations.
3. Helps Solve the Budget Drain of Break/Fix Solutions
Most SMBs are familiar with the break/fix models of IT support, a model that is unpredictable and often costly, as it comprises pay-by-hour services.
A reactive approach to IT, the break/fix IT services model provides no incentive for IT service providers to protect your systems long-term or build a strategy, as they are generating revenue with each trip to your office.
MSPs with a fixed-fee model, on the other hand, are committed to keeping your system well-maintained to minimize disruptions, and to provide fast resolution to breakdowns through expert troubleshooting, all within a strictly defined budget.
It’s in a fixed-fee MSP’s interest to make sure you have as few problems as possible, because maintenance is built into the contract.
4. Provides Long-Term Tech Budgeting
While break/fix models can make businesses feel like they’re playing catch-up—managed services offer strategies that can implement technological advances with a level of consistency and stability conducive to long-term budgeting.
With an MSP, tech solutions and services are bundled into one simple agreement and managed by IT experts. This means that any services added or removed will be clearly outlined by your MSP to allow foolproof budgeting for future business goals.
The purpose of this is to minimize surprises and keep businesses to their pre-defined budget. The fewer unexpected IT bills, the happier accounting will be.
Your managed service provider will not just be responsible for installing, maintaining, and supporting your network, but also for providing and implementing an actionable plan for realizing your IT objectives.
5. Peace of Mind
Delegating IT tasks to a managed services provider not only helps take the stress of unexpected budget impacts away, it also gives companies assurance of a strong cybersecurity presence.
With threat of cyberattacks on the increase, businesses are paying more attention to the safe handling of data. An MSP can ensure your tech infrastructure is secure and software and data is protected in high-tier data centers.
Additionally, by deploying an IT team of experts with cutting-edge knowledge, MSPs can offer a cost-effective solution to common IT issues such as downtime due to maintenance or breakdown of infrastructure.
Not only will MSPs provide appropriate maintenance to keep systems running smoothly, but they respond quickly to breakdowns to minimize downtime and keep business processes from failing.
And because they offer access to IT experts, an MSP can help businesses scale their technology at a pace appropriate with needs and budgets.
Using an MSP with a fixed-fee model provides organizations with a set of clear objectives, a definitive budget, and no hidden fees to give decision makers peace of mind.
A fixed-fee IT plan offers transparent pricing that gives decision-makers and executives a clear understanding of how much their IT support will impact the budget—with no surprises.
MSPs are committed to keeping your IT system well-maintained to minimize disruptions and provide fast resolution to breakdowns through expert trouble-shooting, all within a strictly defined budget.
Using a Managed Services Provider (MSP) to handle IT needs allows companies to focus their resources more clearly on crucial business objectives.
With an MSP, tech solutions and services are bundled into one simple agreement and managed by IT experts. Any services added or removed will be clearly outlined by your MSP to allow foolproof budgeting for future business goals.
To sum up, using an MSP with a fixed-fee model provides organizations with a set of clear objectives, a definitive budget, and no hidden fees to give decision makers peace of mind.
Impact is one of the leading independent managed service providers in the country. We’ve been in the business of helping SMBs realize their goals for 20 years, and we will continue to do so for many years.
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