What Are Managed IT Services?
TeamLogic IT’s managed services business model offers huge advantages
Managed IT services, far from being a buzz phrase, is now the driving force behind the $340 billion U.S. IT industry. In an article titled, “Why Businesses are Turning to Managed IT Services,” published by CIO in 2015, writer Thor Olavsrud reviews CompTIA’s Fourth Annual Trends in Managed Services Study and finds that the IT industry landscape is rapidly turning to the consultative, comprehensive and customer-friendly approach that TeamLogic IT franchise owners use to keep their clients in efficient and profitable businesses every day.
Even companies that have an IT team or department are now using managed IT services providers in rapidly growing numbers. In fact, Olavsrud reports that “more than two-thirds of companies surveyed for CompTIA’s Fourth Annual Trends in Managed Services Study … say they have used the services of an outside IT firm within the past 12 months.”
Why are companies turning to managed IT services providers? For starters, managed IT services are a far cry from the traditional IT industry model of break-and-fix. A managed IT services provider is a 24/7 consultant who advises small businesses on what software to invest in and how to best utilize the software, monitors a small business’ security asset and ensures the overall well-being of a small business that relies on technology for profitability and efficiency. Consider this breakdown from Olavsrud’s article about how much a managed IT services provider improves businesses:
“CompTIA found that improving the efficiency and reliability of IT operations was a main driving factor for going with an MSP for 56 percent of companies with 100 or more employees and 47 percent of companies with fewer than 100 employees,” Olavsrud writes. “Enhanced security and compliance was a driving factor for 38 percent of companies of all sizes. ROI/cost savings was a driving factor for 33 percent of companies with 100 or more employees and 28 percent of companies with fewer than 100 employees. The trade association found that six-in-10 respondents that consider their technology usage advanced are using an MSP for physical security services. Also, 63 percent of the same group are using an MSP for application monitoring. The managed services that are lowest in demand to date are videoconferencing, mobile device management and audio/visual services.”
Managed IT services are essential to the 21st century small and medium-sized business owner
So what are managed IT services, and how are they different from the service you may have sought in the past from an IT provider?
Small and medium-sized businesses have often taken a break-fix approach to technology — waiting for something to break and then scrambling to repair or replace failed equipment, which leads to expensive downtime.
To illustrate the difference in our approach, here’s an analogy:
Having your car break down and leave you stranded on the side of the road is miserable. You may have noticed the engine making a knocking sound, or you may have been caught completely by surprise. Either way, you are losing valuable time and are likely facing a hefty repair bill (or the surprise expense of a new car).
Rather than deal with that kind of nasty surprise and headache, most car owners have learned to take their vehicle in for regular oil changes and other maintenance. Skilled mechanics inspect the vehicle and keep the owner apprised of potential issues, such as worn parts that may need to be replaced. A good mechanic does his best to make sure your car won’t leave you stranded.
Managed IT services contracts provide the same type of service to business owners. Technology is monitored, regular maintenance is done to keep a customer’s tech infrastructure sound and issues are often spotted and corrected before they can become catastrophic. A good technician, and a good IT business, does its best to make sure your technology doesn’t leave you stranded.
How is TeamLogic IT getting managed IT services right?
One of the things that sets TeamLogic IT apart from other franchise opportunities is that there is virtually no ceiling to how much you can earn with a single franchise unit. If you open a high-performing restaurant brand, even the best in the country, you are limited by how many people you can seat and how quickly you can serve customers. At some point the only way to grow is to open a second location, or a third.
A TeamLogic IT franchise is scalable. You start with a small team, but as you build your reputation, add clients and sign more managed IT services contracts, you can grow significant revenue within your territory. Your territory is configured to provide 1,500-2,000 initial target businesses for your service, and a single managed IT services contact is typically worth approximately $2,300 a month — $27,600 a year in recurring revenue. Managed IT service contracts are attractive for small and medium-sized businesses that are highly reliant on technology because the contract allows them to have an on-call expert monitoring their technology and offering solutions, for much less than it would cost them to hire an IT professional or staff.
The managed IT services model not only provides a higher level of service to customers, but it also delivers more predictable cash flow for franchisees. Currently, managed IT services makes up 41% of overall TeamLogic IT revenues; however, corporate leadership predicts that number to reach 50% in the next three years.
“TeamLogic IT compares favorably with the top quartile of managed IT services providers in the world,” says Frank Picarello, Chief Operating Officer with TeamLogic IT. “We have the right services for the marketplace, not only for today, but also for where the industry is going in the future. In terms of results, financial performance is key. When we see TeamLogic IT growing at rates significantly above the industry overall, we know this is the result of getting a lot of things right.”