Calculating Managed Services ROI Before choosing to outsource IT, it is important to calculate Managed Services ROI (return on investment). This article will walk you through how to determine the exact cost of annual IT including losses of productivity and the impact of network downtime. This number can then be compared to the proposed annual cost to discover Managed Services ROI and savings. Annual Loss of Productivity from Managing Vendors Review the number of vendors your company currently uses for IT needs. Then review how long the employee who works with these vendors spends on each one (average) per month. Multiple those hours by the number of vendors involved.
Then multiply that number by average hourly salary of the employee who manages vendors. Multiple that number by 12 to get the annual cost of the loss of productivity from managing these vendors. Keep this number to discover Managed Services ROI at the end of the article. Annual Loss of Productivity from Staff Handling IT Problems The next step in discovering real Managed Services ROI also regards loss of productivity. Determine the number of hours the company’s staff spends performing IT functions. This could be the hours of full time IT employees or just the percentage of time that other employees spend on IT issues. Multiply those hours by the average hourly rate of these employees.
Annual Loss of Gross Revenue from Network Downtime Note how many hours per month each of these services goes down (for whatever reason): email service, internet connection, servers, and desktops. Add those hours together and multiple by 12 for the annual amount of downtime. Using your gross revenue, determine how much your company makes per hour on average. Take that number and then multiply it by the number of hours of downtime. You’ll need this number as well for the total Managed Services ROI.
Annual Loss of Productivity from Network Downtime This is the final step in calculating Managed Services ROI. Multiply the average employee salary by the number of employees on location with the network.
Then, using the average number of hours each employee works a year, find the average cost of all staff per hour. Despre oameni si mel c&i trailer. Multiple the hourly rate for all employees by the number of downtime hours found in the last section.
Managed Services ROI – Final Calculation After the first 4 steps, you can now determine Managed Services ROI. Add existing IT costs both in house and outsourced together. This should include support for all computers, printers, servers and copiers. Take this number and add the totals from the 4 previous sections.
This will give you your company’s total annual IT costs. Then simply compare that number to the annual cost of the managed services. To find total savings, subtract the managed services cost from the total annual IT costs. There are number of worksheets and downloadable Managed-Services ROI Calculator to help walk anyone through the process of discovering the true costs of an IT Department. When comparing costs with Managed Services, it is not just basic products and salaries, but should also include all of the costs listed in this article. This article will help you calculate a more exact Managed Services ROI.
I was recently invited to speak at a channel conference where one of my sessions was centered around selling Managed Services on value. Utilizing the techniques and process we developed as an MSP, I demonstrated, and how to use it to evaluate a prospect's true cost of maintaining their infrastructure the way they currently do it today – managing their own vendors and performing internal 'light-weight' IT maintenance themselves to try to address issues without calling in their existing IT provider, who will bill them for the service call.
I illustrated a typical scenario utilizing our Managed Services Pricing/ROI Calculator where I was able to monetize these internal costs, as well as the true cost of downtime for the prospect – both in lost productivity and in lost opportunity, and was able to show the attendees how they can price their services on the value of the cost savings the prospect may realize from retaining their services; rather than from a per-device, per-user or tiered pricing model, allowing them the ability to quote the prospect much higher than they would normally. In this scenario, we were able to achieve a savings of 50% to the prospect while increasing the flat monthly fee by nearly $1,500 over the attendee's average quote for a like environment. This is the exact technique that allowed us to become so successful as an MSP before launching MSP University. Some of you might remember the original spreadsheet we utilized back then, which is included as a download in '. We've taken that and created a lightweight Flash-based calculator from it, which is visually appealing and allows easy modification to the input data to achieve the results that will compel a prospect to engage with you for services. After my presentation, I received an email from one of the attendees appreciating the session and especially my impersonation of a traditional IT provider and how they price services 'let's see, you've got 20 pc's and one server, I can maintain your network for $3,000', and how that creates the perception that they are only concerned with their own bottom line. With the cost-savings analysis approach, it's immediately evident that we are concerned with the prospect's bottom line – which makes this sales approach so effective, as we are speaking to one of the 3 ways we can help our clients increase profits:.
Reduce costs. Increase sales. Raise prices or rates In his email, the attendee went on to identify that they utilize the first approach, and had heard of our methodology for cost savings and selling on value before, but had been skeptical of this technique, as they did not believe it would 'work' on them. Why is it so hard for IT providers to sell on value?
Roi Calculator Excel
ROI Considerations The general concept to consider is how much does it cost to have someone on payroll full-time doing what a managed service provider does? One important consideration is the number of IT employees needed in businesses where data and network performance is critical, also known as high availability (HA). If your business and your customers require HA, you have consider at least two IT professionals on staff for redundancy and security. If your business can be down for several days to a week, you will not need as many IT professionals used in the ROI calculation.
If you’re ready to see how much PolicyPak can save in your IT costs, then download our free ROI calculator. It’s an Excel spreadsheet where you’ll input the total number of desktop, laptops and concurrent Terminal Services connection you have, the hourly salary for your End Users and your IT Staff, and how often you need to fix their systems. Then when you ask for your official quote from our sales team, you can see how quickly PolicyPak pays for itself and then some. Note: Excel may warn you that this was downloaded from the Internet when your open it.
Real Estate Roi Calculator
But there are no macros or VBA of any kind in this Excel spreadsheet. (Click to enlarge example output).