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Understanding the ROI of Managed IT Services: A Comprehensive Guide
//21-05-2023

Understanding the ROI of Managed IT Services: A Comprehensive Guide

by Advanced PR, Author

As an IT manager, you're constantly evaluating investments that can help your business stay competitive and succeed. One of the most important investments you can make is in managed IT services. However, before you commit to such services, it's essential to understand the return on investment (ROI) they offer.

In this blog, we'll help you understand the ROI of managed IT services and how to evaluate them effectively.

What is ROI?

ROI is a measure of the gain or loss generated on an investment relative to the amount of money invested. Simply put, it's a way to evaluate the profitability of an investment. ROI is expressed as a percentage, and the formula for calculating it is:

ROI = (Net Profit / Investment) x 100%

The variables in this formula are:

Net profit: the amount of profit earned on the investment after all expenses have been paid. Investment: the total amount of money invested in the asset or project

Why ROI Matters for Managed IT Services?

ROI matters because it enables you to make informed decisions about investments. Evaluating the ROI of managed IT services will help you determine if they're worth the investment.

ROI of Managed IT Services

Managed IT services can offer numerous benefits that can positively impact your business's bottom line. Here are some ways managed IT services can provide a positive ROI:

  • Cost savings: Managed IT services can reduce IT costs by offering predictable, fixed monthly costs instead of variable, unpredictable costs associated with in-house IT management. Additionally, managed IT services can improve operational efficiency, leading to further cost savings.
  • Increased productivity: Managed IT services can boost employee productivity by ensuring that IT systems are running smoothly, reducing downtime, and enabling your employees to focus on their core responsibilities.
  • Improved security: Managed IT services can mitigate cybersecurity risks and minimise downtime, both of which can be expensive for your business.
  • Scalability: Managed IT services can support business growth and expansion by providing scalable IT solutions that can adapt to your business's changing needs.
  • Competitive advantage: Managed IT services can give businesses a competitive edge by offering access to the latest technologies and IT expertise.

Factors that Affect ROI of Managed IT Services

Several factors can affect the ROI of managed IT services, including:

Initial investment: It's essential to evaluate the costs of managed IT services carefully, including the upfront cost and ongoing expenses, such as service fees and maintenance costs. While it may seem expensive to invest in managed IT services, it's crucial to consider the potential savings and productivity gains that can result from improved IT performance, reduced downtime, increased efficiency, and reduced staffing costs.

Service level agreement (SLA): The terms of the SLA can impact ROI and the quality of service delivered. It's crucial to establish clear SLAs and monitor performance to ensure you're getting the most value from your managed IT services. The SLA is a crucial factor that can impact the ROI and quality of service delivered by managed IT services. A well-written SLA can help ensure that the service provider meets performance expectations and provides a high level of service. It's crucial to establish clear SLAs with your managed IT service provider, including metrics for measuring performance, response times, and uptime guarantees. Regular monitoring of the SLA can help ensure that the managed IT services are delivering the expected ROI.

Business needs and goals: When evaluating managed IT services, consider how they align with your business's goals and needs. Aligning managed IT services with business objectives can increase ROI. For example, if your business relies heavily on data management, a managed IT service provider with specialised expertise in data management may provide a higher ROI than a general IT service provider. To maximise the ROI of managed IT services, businesses need to carefully evaluate their needs and goals and choose a provider that can meet those needs.

Tips for Maximising ROI of Managed IT Services

To maximise the ROI of managed IT services, consider these tips:

Prioritising business needs and goals: When evaluating managed IT services, focus on those that align with your business's specific needs and goals.
Choosing a reputable managed service provider: Look for a reputable managed service provider with experience in your industry and a proven track record of success.
Establishing clear SLAs and monitoring performance: To ensure you're getting the most value from your managed IT services, establish clear SLAs and monitor your provider's performance regularly.
Regularly reviewing and adjusting IT strategies: IT strategies should be reviewed regularly to ensure they align with your business goals and needs

Want to learn more? Read our free eBook to learn how to drive value from a Managed Service Provider.

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