Managed Services Pricing (Questions/Answers)
Pricing Out a Managed IT Services Plan: What You Need To Know?
Developing a cost-effective and customized price plan for managed IT services
It’s no surprise that any modern business is – to some degree – dependent on technology. No matter what kind of devices your organization uses or the kind of work your organization does, making sure your technology is up and running to support operations is critical. Even more critical? Determining the right kind of IT support to match organizational needs and determining the right price to pay for it.
Like with any other managed service, pricing out IT support services must reflect the unique needs and realities of each business. There really is no ‘one-size-fits-all’ managed IT price plan. Professionals looking to price out managed IT services need to adopt an informed and proactive approach. Don’t wait until a disaster happens to start pricing out managed IT support. The first step is determining what you need – and that means taking a detailed IT inventory.
Strategic Spending: How Taking a Tech Inventory Will Help You Price Out Managed IT
When you go to the grocery store, it’s common practice to make a list. Otherwise, you find yourself wandering the aisles, unsure of what needs to be stocked up at home. You end up getting home with a bag full of things you didn’t need and realize you forgot some of the main items you went to the store for. It sounds simplistic, but pricing out your managed IT service plan should follow the same logic
You don’t want to dive headlong into pricing out a provider before you know exactly what you need. How many computers and devices does your company use? Do they all need to be monitored? What about software and hardware updates – is your organization behind the times and in need of rejuvenation? Do you need round-the-clock support or are you looking for help on an as-needed basis?
Asking yourself these questions will make pricing out managed IT services much easier. Even better? It will help ensure that you don’t end up with a wealth of services and features that you don’t need or that don’t apply to you. This way, when you meet with providers, you’ll be armed with a clear idea of what’s required and what isn’t. Being proactive and thorough is the best way to start a transparent and productive pricing conversation with potential providers.
Comparing Existing Models: Understanding the Pros and Cons of Each
Once you understand the extent and type of IT support services you require, exploring the existing pricing models is a great next step. There are five main pricing models that organizations choose from. Each has its own benefits and drawbacks. However, the ultimate usefulness of each will vary based on the needs of different organizations.
Let’s explore some of the leading managed IT service pricing models:
The per-device or per-user pricing models are celebrated for their flexibility and simplicity. On the per-device model, you pay a flat rate for a device that is supported and monitored by the IT partner, including desktops, laptops, servers, smartphones, tablets, etc. Per-device models are attractive in that they offer the easy adding or removing of devices as needed. However, it’s a good idea to do some research and ensure the per-device rate you’ve been offered is set appropriately based on market realities.
On the per-user device model, a flat rate is issued for each user or employee at your organization – no matter how many or what kind of devices each person uses. Per-user pricing models are attractive because they simplify the billing process. However, if your user base is continually growing and each user is starting to use two or three devices each, keep in mind that your managed IT partner may want to revisit cost-margin considerations.
Value-Based Flat Fee
Flat-fee, value-based pricing models are becoming more and more popular in the managed service sector. Often referred to as ‘cake’ pricing, the value-based model offers organizations ‘full-service’ coverage instead of separated and specialized components. On this model, you truly do ‘buy the cake’ rather than the ingredients you need to make it. Value-based pricing models are great options for SMBs since the model offers wide-spread, comprehensive coverage and services.
Under the value-based pricing model, your managed IT partner essentially takes on the role of your outsourced IT department. They take care of everything for a singular flat rate. Keep in mind though, that if you select this option, you must trust your managed IT partner to cover all your bases and provide adequate full-scope coverage as your IT needs evolve.
Under the tiered pricing model, managed service providers offer a variety of service packages, ranked using levels like Bronze, Silver, Gold, and Platinum. Each tier includes a specified range of services and support. This makes it easy for business owners to check out the specs of each package and choose one that is both cost-effective and tailored to their specific needs.
Do keep in mind, however, that sometimes service packages will contain some things you need and some you may not. While its possible, pre-established tiered service packages may not always be a flawless fit with your needs and budget parameters. When using this model, its best to select the service tier that gives you as much relevant support as possible while staying inside your cost margins. This way you’ll avoid investing in services or fancy solutions that you don’t want or need.
The a-la-carte pricing model works just as it sounds. You’re able to build-your-own service plan based on the supports and solutions that you require and nothing more. This is perhaps the most celebrated model as it offers maximum flexibility and customization for organizations.
However, when using an a-la-carte pricing model, it’s a great idea to consult with a third-party expert to ensure you have all your bases covered. The last thing you want is to draw up a service agreement, thinking you’ve thought of everything, only to find out later that you’re missing critical supports and services. Also, be sure to discuss scalability with your provider when using an a-la-carte model. Your needs now may change over time as your business develops. Be sure to have the future in mind and make sure your managed service provider does too.
Finally, the all-inclusive model offers a flat-fee for all services. This model truly focuses on providing the ‘whole-package’ and a total service experience for one, fixed cost. Instead of offering different tiers or ‘build-your-own’ options, the full-service, all-inclusive option seeks to be one-size-fits-all support solution applicable to any business.
This is an attractive model for business owners who don’t want to get lost in the nuts and bolts of their IT support – they just want to be supported and have their technology to work consistently. However, though tempting, the budget conscious should keep in mind that the “all or nothing approach” can come with the heftiest price tag.
Setting Priorities: The Features and Services Your Price Plan Should Prioritize
When it comes down to it, your managed IT price plan should be a guidebook for how you’re going to make the most out of your IT support investment. Of course, you want to get as many features as possible for the best price. However, the bottom line is, budgets are often tight and getting the enterprise-level, full-service IT experience may not always be a financial possibility. So, while it’s important to make the most of your investment, it’s critical that at the very least, your IT support partner is offering you some very basic ROI benefits.
No matter your needs or the model you choose, your managed IT price plan should include these three features as priorities:
It’s no secret that today’s cybersecurity climate is more complex and hostile than ever before. With more devices in the workforce and more sophisticated cybercriminals waiting in the shadows, the risks to your business data can seem overwhelming.
When pricing out a managed IT plan, security and peace of mind should be on the top of your priority list. No matter the model you choose, your price plan should include specific mention of reliable and dynamic security services and solutions.
The nature of business today is rather unpredictable. Your business could be small one month and growing rapidly in the next. Or, you could start big and have to scale back certain areas of your business as things change. No matter the type of business you’re in, change is inevitable.
So, when developing a pricing model for managed IT services, organizations should put a deliberate focus on scalability. The IT partner you choose to invest with should offer concrete ideas regarding how your service plan will grow and evolve with you as your business does.
Technology should make your life easier, not harder. The operations at your organization should be improved and supported by your IT support. Smart and supportive IT solutions will help streamline even the most basic processes in your office.
When developing a managed IT price plan, be sure to emphasize to potential partners that you’re looking to make things work seamlessly. A thorough managed IT price plan will include specific details on how services provided will improve operational efficiency.
Finalizing Your Managed IT Price Plan: Use a Guide, But Trust Your Gut
At the end of the day, you are your own best expert when it comes to developing a managed IT price plan. Only you know what you’re willing or able to spend and only you and your team know what kind of support is most important. So, the best advice we can give is to use these suggestions as a guide, but trust your gut to know when an investment is worth making
As mentioned, take the time to understand what your organization truly needs when it comes to IT support and service. Create an inventory, explore the different models, and choose a solution that makes the most sense for your team and your organization as a whole. Going in with an informed and proactive mindset will be half the battle in pricing out a strategic IT support plan.
Finally, once you’ve done the leg-work, don’t hesitate to reach out to an IT professional for consultation and guidance. Don’t leave it up to the IT pros to price out a plan for you, but do feel comfortable asking questions and getting feedback. A combination of your own insight and expert advice will help you develop a managed IT price plan with major ROI potential.