Efficient and Effective IT Service Management
Given the increasing importance of stable and secure technology in your business, a predictive model to support technology is becoming critical. Companies that tally up their unplanned (reactive) IT service expenditures will find that a stable technology model could have saved them time and money by avoiding expensive disruptions and extra focus on technology–which can also take focus away from your core business. An IT support model that works to save money and plan for expenditures can give your business a competitive edge.
So, what are the main support models that companies can choose from?
There are two main ways to purchase IT services: Flat-rate or Hourly.
Flat-rate (or Managed) Services
Flat-rate Services or Managed Services are designed to be an all-inclusive support offering. This type of solution has been around for many years and when run properly, can be win-win for the customer and the provider. The business wins because they have someone that has accountability and responsibility for delivering a quality technology experience, all within a set monthly fee. A flat-rate provider is typically made up of different levels of technicians that are qualified to do various tasks.
What are the pros and cons of a flat-rate (managed) service model?
Pros: Can be a reliable, responsive solution with expenses that can accurately be projected throughout a fiscal year. Often the level of support will be a higher technical level because of the size of the team. Documentation and systems will be more predictable. Team approach can give a more responsive, reliable experience.
Cons: Can appear to be more expensive because the costs are clearly spelled out in advance. There is a monthly fee even when there are not visible technology costs. Providers often require proactive replacement of hardware at certain intervals to avoid costly outages.
Break/Fix (or Hourly) Support
Break/Fix or hourly support is the traditional model of calling a service provider when the customer has a technology problem. The provider responds to the emergency and charges an hourly rate for the time required to fix the problem. What are the pros and cons of a this model?
Pros: With the right provider, this can be a highly personal, responsive solution that is cost effective.
Cons: These types of providers are generally a single a technician. Documentation and systems can be sparse. Vacation time, sick time and rapid growth can cause serious response time issues. Technology expenses are unknown ahead of time. It’s possible to have a $400 expense month followed by a $10,000 expense month. Typically, hardware is replaced only when it fails, causing expensive business disruptions.
Profit Model Considerations
When selecting a support model for your business, it’s important to look at the profit incentives behind both models.
With Flat-rate or Managed Services, the agreement is typically a set monthly fee to keep the technology working properly. The provider is highly incentivized to make the support as efficient as possible. In this model, it’s important to inspect what has been promised. For example, if Security Patch Management is included in your monthly fee, make sure that you get a monthly report proving that your patch levels are up to date. Unscrupulous providers could over promise and under deliver on these agreements. Some flat-rate providers will mix and match models, letting some customers pay for flat-rate support, but also accepting break/fix or hourly customers. This can quickly lead to a conflict of interest because the shared technicians are too busy doing hourly work that they don’t have time to do the contracted proactive work.
Break/Fix or Hourly Support providers only get paid only when things are broken. The profit incentive in this model is to fix problems well enough to not get fired, but not so well they don’t get called back. The only financial win for a break/fix provider is when things are broken so it’s a good idea to inspect the work and the patterns of repeat service calls for the same hardware.
If you have questions about which model is right for you, reach out. At Philantech3, we provide the Flat-rate or Managed Services model, but we’ll help point you in the right direction even if we are not the right fit for you. Call us at 509-590-4240 or contact us today!
With an undergraduate degree in Applied Management, a graduate degree in Business Administration and as a doctoral candidate in Organizational Psychology, let’s just say that business and leadership are Wil’s passions! He is also a small business owner who understands the rigors and joys of business building.