Transform IT From Tactical to Strategic

The economy is improving. Companies are hiring again. Technology is increasingly viewed as essential to the success of small businesses. Yet only one-quarter of small business IT budgets are larger in 2014 than in 2013, according to the 2014 annual Spiceworks State of IT Budget survey of small businesses. Another survey shows that a full 53 percent of small businesses say that their IT budgets are either “very” or “somewhat” inadequate to their needs.

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It’s a small wonder that the top challenges facing small business IT managers are budget and time shortages. And you know from personal experience where most of your time and money goes: to routine monitoring and management of systems and networks and ongoing maintenance of infrastructure. In fact, Gartner estimates that companies spend two-thirds (66 percent) of their IT budgets simply keeping infrastructure running. That leaves only one-third of already-limited funds to invest in strategic projects—and people—that actually help the business boost revenue. A 50-50 split would be ideal. But few small businesses can achieve this. They feel that they have to make a hard choice.

Why You Don’t Have to Choose Between Tactical and Strategic IT Investments

Don’t get me wrong. Although I call it “routine,” managing IT infrastructure is critical. After all, when something goes wrong, things can head south very, very fast: employees can’t get their jobs done, orders can’t be processed, and customers can’t get serviced. It’s all-around bad news for your IT team—and for your business.

So what do you do when certain tasks are essential to your organization yet consume too much of your valuable IT resources?

Why, consider hosted managed services, of course.

A hosted managed service provider (MSP) assumes responsibility for the monitoring and management functions that are essential, yet non-strategic to your business. Your business does not own the infrastructure, the MSP does. It operates, monitors, manages, maintains, and upgrades your systems for a fixed monthly fee. You are provided performance visibility and administrative portal control for monitoring and feature deployment and changes.

MSPs usually offer menus of IT services from which you can pick and choose—services that include maintenance and management of servers, client devices, networks, applications, security and patch management, and backup and recovery, among others. They deliver these services over the Internet, with onsite support provided as needed. You are relieved of the day-to-day burden of managing IT infrastructure.

Managed services are an increasingly popular option for IT resource-strapped small businesses. By 2013, 36 percent of small businesses depended on MSPs, and that number will increase to 40 percent by the end of 2014. By late 2015, the global small business market for managed services will be $95.7 billion USD, which represents a compound annual growth rate (CAGR) of 28 percent over the previous three years.

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Why Managed Services Now?

But this growth is relatively new. Managed services have only recently started catching on for small businesses. Here’s why I think that is the case, and why the situation is changing:

1) IT budgets are tighter. IT is more strapped for cash than it used to be. For many IT managers, the ability to transform the capital expenses (CapEx) needed for purchasing infrastructure into the operational expenses (OpEx) of subscribing to its management is very appealing.

2) Economies of scale make the price of managed services attractive. Since they can leverage technology investments across a large number of clients, MSPs can afford to invest in technology, tools and specialized skills. Although small businesses generally can’t do this on their own, they can take advantage of the investments MSPs have made.

3) Demands on IT are becoming more complex. Uptime requirements have become more stringent, mobility has become a fact of business, and small businesses are struggling to find, pay and retain the networking, storage and security specialists required to keep up with these demands.

4) MSPs previously didn’t offer small business solutions. Managed services used to only be available to larger enterprises. But today many MSPs have entered into the small business market, and offer attractive deals to smaller companies based on the specific needs indigenous to each company.

5) Better remote management tools are now available. Today MSPs can address most issues that previously could only be handled on premises. That, plus the visibility that such tools give small businesses into the health of their infrastructure mean that small businesses are more on top of IT than they ever could be before.

Perhaps most critically, managed services allow you to concentrate on strategic IT initiatives instead of tactical operations. Rather than responding to every incident, you could be strategizing with your CEO on how best to leverage technology to be more competitive—that’s adding real value to your organization.
Surveys back this up. More than two-thirds (68 percent) of small businesses said that using an MSP allowed their IT staffs to do both more, and more strategic, work.

Small businesses are no longer technology laggards

IT is more critical than ever to the overall success of small businesses. Although more than half (52 percent) of small businesses say they only invest when there is “clear ROI,” more than a third of them are early adopters of technology. To do that requires focus and strategic thinking—and partnering with the business rather than struggling on a daily basis to put out fires and keep the lights on. Managed services could well be the answer. Think about it.

Interested in what CenturyLink Managed Services can do for your business?

State of IT Budget Report 2014, Spiceworks, January 2014.
IT Spending and Staffing Benchmarks, 2014-2015, Computer Economics
“Managed Services Survey,” Spiceworks, December 2013.
“Moving away from IT spend as a percentage of revenue,” Christina Torode, TechTarget, June 1, 2012.
“Managed Services Survey,” Spiceworks, December 2013.
Parallels Global SMB Cloud Insights, 2013.
“Managed Services Survey,” Spiceworks, December 2013.
“SMEs: Equipped to Compete,” Oxford Economics, June 2013.