Do you really get what you pay for in IT?

The old adage “You get what you pay for…” used to mean pay extra and get a better product or service. But today in IT it is different.

Some IT sales rep tells you how great their company is and how different they are and sell you a set of services, you know them all.

• PC and Server Backup
• PC and Server Patching,
• Anti-Virus,
• Remote Monitoring.

and maybe just maybe if your lucky some security products.

You think your in Good hands!

It is what you DO NOT know that may change your mind.

MOST small MSPs are just reselling these services from other companies.

To repeat it again in a different way.

They sell Connectwise or Autotask, as the RMM and PSA tool, they sell Bitdefender or Webroot as AV, they sell Datto or heaven forbid Carbonite as your backup solution, and the list goes on, and they white label it as their own, but the reality is they do not manage or maintain or develop these solutions and most of the time barely understand them other than parroting what they learned in a vendors class.

“I know of a major NOC (network operations center) in Dallas that resells itself to MSPs and so the MSPs do not even have the employees to deal with your tickets.”

Your IT Management service could be coming from a NOC in India, or Pakistan or just about anywhere. Especially if there is no onsite portion, but even if their is onsite the MSP could just be using Field Nation and hiring people to go onsite from a website….

So which IT service provider should I chose?

So the reality is what makes a Managed Service Provider different from their competition, and how do I know which one is right for my business?

Those are the Million Dollar questions, and to answer it we need to ask ourselves some other questions?

1. Do you have an IT budget?
2. How important is IT to your business success or failure?
3. How fast do problems need to be resolved?

1.) IT Importance:

It is very easy in some businesses to look at the current IT needs and think you may only need a couple of PCs and you are golden, but with any success that grows very quickly to include servers, and IP Phones, and VPNs, and a plethora of digital age solutions that make us more efficient. As the only way for us to complete is through efficiencies. So taking time and enlisting the help of a real IT business professional can help you decide what your future looks like.

Example:

An easy way to look at this is through this formula: ((patients per hour) * (average visit revenue)) – ((cost of acquisition)+(cost of service))

So if a patients average visit generated $250.00 in revenue and your cost to acquire the patient is $5.00*5 and the cost to deliver the service (xray clean etc.) is $25.00*5 the formula looks like this.

(5*250.00) – ((25.00+125.00)*5)= 1100.00

So if your cannot service these 5 patients for only 1 hour is costs your practice $1,100.00 per hour your down, or $8800.00 a day.

So if you take all of your IT systems into account and look at what not having them costs in lost revenue, lost billing, additional time for your staff through lost efficiencies you can start to see how important these systems actually are and be able to set a budget to service and maintain them appropriately.

2.) Speed of resolution:

Or simply how fast things get fixed, because it is not if, but when their are IT troubles will your vendor be able to fix it or do they have to contact the middle man, who contact the actual vendor, who can do the work but blames another vendor and your stuck in the blame game rut.

Will you existing vendor even come onsite today?

3.) IT Budgets:

Being in your shoes as a business owner I can say it was an eye opening experience in looking and and creating a budget in an small business when you do not even know what your next customer is coming from. But it was a major piece of the puzzle to get from 1 million a year to 5 and beyond. Setting budgets using data from previous years or market research and expectations helps build businesses. But a budget also take into account updates, upgrades, and maintenance of your IT infrastructure. (PCs, servers, switches, WiFi, etc). As an example: The life-cycle for WiFi is now about 2-3 years. If your past that they it may not work with the new printer you just got, or your new iPhone. So you need to be able to budget for those and a real IT professional can help you do that once you see how important they are.

Conclusion

So now we have those questions answered and now we can look at the different IT companies that come knocking each week and ask the important questions.

1.) Can they do the job or are they reselling?

2.) How fast can they get resolution?

3.) Does this fit my budget

Once we get those questions answered truthfully we can make informed decisions and choose an MSP that fits our requirements because we defined them.

The old adage “You get what you pay for…” used to mean pay extra and get a better product or service. But today in IT it is different.

Some IT sales rep tells you how great their company is and how different they are and sell you a set of services, you know them all.

• PC and Server Backup
• PC and Server Patching,
• Anti-Virus,
• Remote Monitoring.

and maybe just maybe if your lucky some security products.

You think your in Good hands!

It is what you DO NOT know that may change your mind.

MOST small MSPs are just reselling these services from other companies.

To repeat it again in a different way.

They sell Connectwise or Autotask, as the RMM and PSA tool, they sell Bitdefender or Webroot as AV, they sell Datto or heaven forbid Carbonite as your backup solution, and the list goes on, and they white label it as their own, but the reality is they do not manage or maintain or develop these solutions and most of the time barely understand them other than parroting what they learned in a vendors class.

“I know of a major NOC (network operations center) in Dallas that resells itself to MSPs and so the MSPs do not even have the employees to deal with your tickets.”

Your IT Management service could be coming from a NOC in India, or Pakistan or just about anywhere. Especially if there is no onsite portion, but even if their is onsite the MSP could just be using Field Nation and hiring people to go onsite from a website….

So the reality is what makes a Managed Service Provider different from their competition?

That is the Million Dollar question, but to answer it we need to ask some other questions?

1. Do you have an IT budget?
2. How important is IT to your business success or failure?
3. How fast do problems need to be resolved?

1.) IT Budgets:

Being in your shoes as a business owner I can say it was an eye opening experience in looking and and creating a budget in an small business when you do not even know what your next customer is coming from. But it was a major piece of the puzzle to get from 1 million a year to 5 and beyond. Setting budgets using data from previous years or market research and expectations helps build businesses. But a budget also take into account updates, upgrades, and maintenance of your IT infrastructure. (PCs, servers, switches, WiFi, etc). As an example: The life-cycle for WiFi is now about 2-3 years. If your past that they it may not work with the new printer you just got, or your new iPhone. So you need to be able to budget for those and a real IT professional can help you do that.

2.) IT Importance:

It is very easy in some businesses to look at the current IT needs and think you may only need a couple of PCs and you are golden, but with any success that grows very quickly to include servers, and IP Phones, and VPNs, and a plethora of digital age solutions that make us more efficient. As the only way for us to complete is through efficiencies. So taking time and enlisting the help of a real IT business professional can help you decide what your future looks like.

Example: Your dental practice does 10 Xrays a Day that reimburse your practice $100.00 for each XRay. 10 x $100 = $1000.00 a day.

Your Xray server is down and you have to wait to get it fixed for 2 days you lose $2000.00 in actual revenue as you send customers to another office to get the xrays.

So if you take all of your IT systems into account and look at what not having them costs in lost revenue, lost billing, additional time for your staff through lost efficiencies you can start to see how important these systems actually are.

An easy way to look at this is through this formula: ((patients per hour) * (average visit revenue)) – ((cost of acquisition)+(cost of service))

So if a patients average visit generated 250.00 in revenue and your cost to acquire the patient is 5.00 and the cost to deliver the service (xray clean etc.) is 25.00 the formula looks like this.

(5*250.00) – (25.00+125.00) = 1100.00

So if your cannot service these 5 patients for only 1 hour is costs your practice $1,100.00 per hour your down.

3.) Speed of resolution:

Or simply how fast things get fixed, because it is not if but when their are IT troubles will your vendor be able to fix it or do they have to contact the middle man, who contact the actual vendor, who can do the work but blames another vendor and your stuck in the blame game rut.

Which means they all purchase the same cloud based backup from wholesaler X put their brand on it and resell it to you with their margins.

In this environment the cheapest may be the best because it is exactly the same as all the others, but what you will be missing is the onsite or remote service to get you back up and moving quickly, to understand your business and design solutions that fit your needs, your budget, and your expected growth.

If what you want is to hire a pretend IT company so you can say you have one then by all means hire “Johnny Redneck IT company” and hope that you have little to no real issues or that your contracts with your software vendors includes support so Johnny can call them to actually get things fixed.

It is kind of like you want champaigne service, white gloves and all, but you only have a beer budget so you cannot afford or refuse to pay for the extras.